Some insurance company representatives have recently been reported
as recommending to retirees that they take 100% of their retirement
benefits, puchasing life insurance to meet the future needs of
their spouse. This practice may be fine for some retirees, but
this practice may also present financial difficulties for surviving
spouses of other retirees. Please consult with your financial
planner or the Maine State Retirement System before making yhour
final decision.
This is a personal decision which must be made after careful consideration. Medicaid pays many nursing home bills. It pays after a person has spent down everything but home, car and $2,000 in other assets. So the insurance protects beyond these.
To help you make a decision:
An NEA Financial Affairs Bulletin of June, 1996 says you are NOT a
good candidate for longterm care insurance if:
-you currently have an illness or injury which is likely to require nursinghome care (you may not be insurable at this point);
-you have assets of less than $40,000 and are able and willing to get into a Medicaid-qualified nursing home;
-you are willing and able tO legally bypass Medicaid spend down regulation, e.g. relinquishing assets to heirs;
-you are wealthy enough to spend S50,000 to $100,000 a year for long term care expenses.
A United Seniors Health Report of summer, 1996 gives this consumer tip: USHC encourages seniors NOT to consider buying long-term care insurance unless they meet all of these criteria:
-have more than $75,000 in assets per person in the household (not includling their primary residence);
-have annual retirement income over $30,000 per person in the household;
-can comfortably afford the policy, even if premiums were tO increase by 20% to 30% in the future.
Use these guidelines and a careful review of your individual circumstances when considering long-term care.
a) Health insurance coverage through local association:
Your health coverage is determined by the plan bargained by your local education association. If your local at any time bargains a new plan, you too must change to the new plan whatever your age. Stay in contact with your local association.
b) BC/BS premium benefits for 2 teacher situation:
If you are a two-teacher family and both of you are retiring, consider retiring as a single subscriber so that each of you is covered within the state's 30% contribution.
c) Medicare prescription card
If you retire from a local which does not have the Blue Cross/Blue Shield MEDCO prescription card, you will not have access to that benefit.
If you are covered under Medicare with the MEA Benefit Trust Group Companion Plan through the MEA Benefits Trust and your local association changes its health care coverage, you must go with the School's New Health Plan Carrier.
Teacher retirees who may also be receiving benefits from work covered by Social Security, and who fall under the provisions of "Offset" must take care to report MSRS COLA payments to Social Securitv as this will affect your Social Security benefits !
(Reporting COLA's is the responsibility of the retiree)
Particular attention must be paid to the amount you request MSRS deduct from your monthly checks.
Be sure not to "under-deduct" when completing your W-4 for MSRS. Keep close tabs as you receive your checks, on the amounts deducted for Federal and State Withholding. Make sure that enough is "taken-out" so that when tax time rolls around you aren't left "holding the bag" with a large additional payment on your tax liability and possible tax penalties and the necessity of filing quarterly.
The first year is the most "difficult" to gauge, especially if YOU may be engaged in some part-time work.. If you determine that changes in deductions need to be made, request a W-4 from MSRS (they'11 be glad to help by letting you know what each deduction amounts to in $) and re-file with whatever changes you feel must be made.
Of course, you don't necessarily want to "over-deduct" either. Getting a "fat" refund is nice, but it simply means you've made an interest free loan to the government! Keeping a refund as small as possible is a better business,tactic! Bcsides, you can be earning interest on that extra money!