Friday, July 31, 2015

Update on other countries’ approach to long-term care

The U.S. is facing a crisis as millions of baby boomers are approaching the age when the possibility of needing long-term care skyrockets. Our government provides minimal care via Medicare, while you must be almost broke to receive Medicaid. The CLASS Act program, which was part of Obamacare, died before the law went into effect — a prediction I made while Washington’s wonks were muddling behind closed doors. And only a small percentage of boomers have long-term care insurance.

Other industrial countries are facing a similar shift in demographics. And last December I shared a report with you on how they’re coping. Here is an update on three of them …

The United Kingdom

Single-premium immediate annuities are popular among those who currently need long-term care and can afford them. They provide a guaranteed, tax-free income that can help fund LTC bills. Starting next April, the British government is phasing in new restrictions on access to public LTC benefits. Individuals will have to spend £72,000 (US$113,000) on LTC services and all but £118,000 (US$184,000) of their assets before government benefits start. Afterwards, the government will provide “full state support,” which has limitations. 


15% of those over age 40 have private LTCI. And to keep premiums down, waiting periods of 3 years for dementia and 1 year for other covered conditions are common.


Singapore has a mandatory saving plan for all workers that they can use for retirement, housing, and health care. Workers ages 40 to 69 are automatically enrolled in an ElderShield LTC benefits program. But the monthly benefit is only 400 Singapore dollars (US$293) per month; nursing home care in the country runs at least 1,200 dollars (US$878). However, participants have the option of contributing up to 600 dollars (US$439) into a private plan each year giving them up to 3,500 dollars (US$2,562) per month in benefits.


Based on those few brief observations, governments remain the provider of last resort for long-term care. And the trend seems to be shifting to requiring citizens to take on even greater responsibility for their own care. Their tools of choice: Immediate and deferred annuities, and private long-term care insurance.

Thursday, July 30, 2015

Long-term care guide on Kindle

Due to numerous requests, A Boomer’s Guide to Long-term Care is now available in Kindle format. You can order your copy here for immediate download. 

Wednesday, July 29, 2015

Experts say invest in these properties ...

The research and valuation firm, Situs RERC, conducts surveys of experts each quarter to find out which types of commercial properties offer the best potential for investors. The survey has a scale from 1 to 10, 1 representing the poorest conditions and 10 the best.

Here are the preliminary results for the second quarter. Final results will come out early August.
  • Apartment building: 5.9
  • Hotels: 6.4
  • Student housing: 6.5
  • Neighborhood shopping centers: 6.6
  • Office building in central business districts: 6.6
  • Industrial warehouses: 7.6
If you are an individual investor, you might not be in a position to pluck down the amount of money required to buy one of the above properties. But there are real estate investment trusts (REITs) that focus on each of these sectors. 

For more information on REITs, the National Association of Real Investment Trusts’ website is a good place to start. 

Tuesday, July 28, 2015

Big-buck investors piling into real estate

Yesterday I wrote about how investors are jumping back into real estate. But it’s not just everyday folks like you and me. The big money is pouring in, too.

Did you ever hear of Tiger 21? It’s an investment group made up of entrepreneurs, CEOs, inventors and top executives with backgrounds in financial services, real estate, industrial and consumer goods, legal services, entertainment and medicine. In other words, they’re a pretty bright group of guys and gals with deep pockets.

The more than 300 members collectively manage about $30 billion in assets. And last week, Tiger 21 reported that members’ real estate allocation increased to 30%, up one percent from the first quarter. That’s a new high for the asset class and a big leap from 22% a year earlier. 

By the way, if you’d like to join Tiger 21, the annual membership fee is $30,000. 

Monday, July 27, 2015

Americans back to lovin’ real estate!

The housing bubble that led to massive foreclosures and the crisis in 2008 is a distant memory. According to a new survey, investors would rather put their long-term money in real estate than anything else.

Of the 1,000 investors surveyed, 27% picked real estate as their top choice for money they wouldn’t need for at least 10 years. Cash was the favorite for 23% of them. Stocks came in third at 17%.

Look, I like real estate, too. Always have. But you need to do it right, otherwise you’re sure to lose your butt! 

So before you buy a property with the intention of renting it out, be sure to get your copy of What You Must Know BEFORE Becoming a Greedy Landlord. I’m putting the finishing touches on it now and will let you know the moment it’s available on and other booksellers. 

Friday, July 24, 2015

Hillary and the Senate bearing gifts for you …

The race is on … the one where those fighting for a four-year stint in the White House see who can promise the most freebees to voters.

On one side we have Hillary Clinton who has dangled higher minimum wages in front of supporters. And most recently, she pledged to reform capital gains taxation to fight those evil fat cats who make quick profits in the markets.

Will those moves benefit Americans and the U.S. economy? Who cares! Voters only need to think they’ll get something for nothing.

Not to be out done, the Republican-controlled Senate pulled a rabbit out of their hat on Tuesday by passing a package of more than 50 tax extenders.

The majority of voters couldn’t give a hoot about most of the extensions, such as:       
  • Special rules for certain film television productions
  • Indian employment tax credit
  •  Three-year depreciation for racehorses

However, there is one that is surely aimed at buying votes: Mortgage debt relief.

Currently, taxpayers who have mortgage debt canceled or forgiven may be required to declare that amount as taxable income. So those who walked away from a mortgage or had their home sold in a short-sale could be on the hook to the IRS for a healthy chunk of money.

The Senate’s provision will allow up to $2 million of forgiven debt to be excluded from taxable income through the tax year 2016.

Sweet deal for many who were conned by a slick banker, made a lousy decision, or had a streak of bad luck.

But like all giveaways, someone pays the price. And as usual that one will fall on the shoulders of the rest of us taxpayers to the tune of $5.122 billion.

And if you haven’t received your giveaway yet, be patient. The season has just begun. 

Wednesday, July 22, 2015

In case you missed the announcement …

This is National my Social Security Week! It’s the government’s big push to get everyone to sign up for a free online account. With an online account, you’ll be able to change your address, start or change your direct deposit, get a replacement Medicare card, check your retirement benefits, and a host of other tasks.

To create your account,
click here