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October 2018

What You Need to Know About Social Security in 2019

OntheHouseWhether or not you have filed for Social Security benefits, every Boomer should be aware of how Social Security operates. The best source of information is the SSA, the Social Security Administration ( There you will find everything you need to know about how and when to apply for benefits.

Boomers tend to have a lengthy work history, which generally means monthly benefit amounts will be higher. According to the SSA, to qualify for benefits in general, an individual must work for at least ten years while earning at least $5,280 per year. However, benefit amounts are also affected by the age at which you start to draw Social Security.

You should be aware of the three most important ages as far as Social Security is concerned:

  1. Age 62 - This is the earliest you can draw Social Security, but the benefit amount will be reduced.
  2. "Full retirement age" - This is the age at which you receive full Social Security benefits. If you were born between 1943 and 1954, that age is 66. After 1954, that age is 67.
  3. Age 70 - This is the age at which Social Security benefits reach the maximum amount. Between your "full retirement age" and age 70, your monthly benefit may increase the longer you wait to draw Social Security.

Also, you can still draw Social Security while you are working if you are age 62 or older.

As you can see, drawing Social Security is a financial decision that should be carefully considered, ideally with the help of a financial advisor.

Most Boomers know that Social Security is completely different from Medicare, a government-funded health insurance program that covers individuals age 65 and over. The inter-relationship with Social Security is simply that Medicare payments can be automatically deducted from Social Security benefits.

There are some important changes to Social Security coming in 2019.

  1. The good news is that there will be Cost of Living Adjustment (often called "COLA") to the monthly benefit payment of 2.8 percent beginning in January 2019. That may not sound like much, but the COLA has been next to nothing for many years, so it is a marked improvement.
  2. If you are still working between the ages of 62 and your full retirement age, you can still draw Social Security benefits; however, if you earn more than $17,640 per year during that time, the SSA will deduct $1 for every $2 you earn from your monthly benefit. The year that you reach full retirement age, the SSA will deduct $1 for every $3 you earn from your monthly benefit if you earn $46,920 in that year. Once you reach your full retirement age, you can earn any amount without reducing your Social Security benefit.
  3. During your earning years, Social Security tax was deducted from your paycheck on earnings up to $128,400 annually. If you made more than that per year, you were only taxed for Social Security purposes on that amount. In 2019, Social Security tax will apply on earnings up to $132,900.
  4. Supplemental Security Income (SSI), which is available to those with special conditions (blind and disabilities, for example) will also see a modest increase.

The SSA now offers anyone the ability to set up a personal online account with two-factor security authentication. Once you set it up, you can get personalized information about your potential or actual Social Security benefit and interact with SSA as necessary. Check it out here:

What the CVS-Aetna Merger Could Mean for Retirees

MusingsThe federal government's approval of the CVS-Aetna merger has vast implications for health care in the U.S. It could also have a direct impact on retirees, the most immediate being that Aetna must sell its Medicare Part D prescription drug plans to WellCare Health Plans. CVS already has the largest market share of Medicare Part D prescription drug plans through SilverScript, which is operated by CVS Caremark.

So what does this really mean for retirees? In the short term, if you have a Medicare Part D plan through SilverScript, nothing changes, but if you have a Medicare Part D plan through Aetna, it will be transferred to WellCare Health. Longer term, the merger of the nation's leading retail pharmacy with one of the nation's largest health insurers is a major development in the health insurance industry. According to Washington Post journalist Brian Fung, “The tie-up will allow CVS -- whose retail pharmacy business serves 5 million customers a day -- to turn more of its brick-and-mortar locations into front-line clinics for basic medical services and patient monitoring. By deepening its knowledge of and relationships with patients, CVS has said the combination could help Americans stick with medication regimens and stay out of the hospital."

The advocacy group Consumers Union, a division of Consumer Reports, is skeptical about the merger. A statement issued by its senior policy counsel, George, Slover, reads in part, "This type of consolidation in a market already dominated by a few, powerful players, presents the very real possibility of reduced competition that harms consumer choice and quality. We are concerned that the limited conditions the Department of Justice put on this deal simply are not enough to ensure that CVS-Aetna doesn’t use its outsized resources in ways that stifle true competition and reduce choice at all levels up and down the chain – ultimately leaving consumers with fewer options and higher costs.”

The merger sheds light on the connection between prescription drug providers and insurance companies. OptumRx, for example, is owned by UnitedHealth Group, and Anthem, a Blue Cross operator with a presence in a number of states, plans to open its own pharmacy. Industry watchers are also keeping an eye on the e-commerce giant, Amazon, which has acquired prescription drug provider PillPack.

The CVS-Aetna merger is expected to be finalized before the end of 2018.

The Transition to Retirement

MusingsThanks to Boomers, the definition of "retirement" has changed dramatically and completely. Many Boomers fully expect to keep working well beyond the traditional retirement age, and others look at retirement as not any kind of termination point, but rather as another phase of life. An article appearing on the excellent website,, puts retirement into perspective by discussing 7 tips for transitioning into retirement. The article is sponsored by Acts Retirement-Life Communities.

One of the key points made in the article is that it takes time -- probably more time than you realize -- to move into retirement: "It could take months or it could take a few years for you to finally feel comfortable in your new skin. It’s completely natural and understandable for this transition to take a long time. After all, you were involved in the world of work for decades and those habits won’t melt away instantly." Another good point is to view retirement as the beginning of something new, fresh and exciting: "People live much longer than they used to. That means retirement is longer, too. Make the most it by finding a new purpose, setting new goals and generally broadening your horizons in every way you can imagine possible."

I can attest to the accuracy of this advice. I "rewired" in my mid-fifties by leaving a professional career and needed time to transition away from commuting and working in a traditional business setting. My wife and I relocated to a smaller city with a more temperate climate. We decided to start a small service business together and run it for a period of time, which turned out to be about seven years. (We wrote a book about our experience, Let's Make Money, Honey: The Couple's Guide to Starting a Service Business) We always intended to operate it as a transitional business until we were ready to stop working full-time. I then became a part-time independent writer and sometime marketing consultant, in combination with nonprofit volunteering. This transition has been a good one for me. I am very happy working when I want and managing my own schedule. My wife stays busy with nonprofit volunteering and as her mother's primary caretaker.

Obviously, your way of handling this transition may be different from mine, but I do agree it generally takes longer than you think to feel comfortable with this new phase of life. I am fortunate in that I can write both for fun (this blog, for example) and for income, and I know not every Boomer has this luxury. Read the 7 tips in the article -- it will help you gain some insight into transitioning to retirement.

Excellent Resources for Seniors

MediaPeriodically, I like to make Happily Rewired readers aware of free resources that are available to seniors. There is a lot of information on the Internet and, as you well know, not all of it is authoritative. Thankfully, some organizations do careful research so the information they provide is accurate and of high quality. Here are three resources I think you will find helpful:

Retirement Planning Guide for Seniors

This comprehensive online guide from Lexington Law, a law firm, offers helpful information and advice for navigating your finances as you age and will help you organize, plan and prepare for the future. The guide includes the following sections: Organizing your finances, Managing your retirement, Maximizing your senior status, Managing your credit and debt, Avoiding financial fraud, Preparing your estate, Helping the next generation.

Retirement Living Information Center is a national resource for consumer information related to retirement. The website provides access to an array of resource materials, including where to retire, personal finance, a newsletter, books and online publications, and buyers guides about special products and services. Some of the information on this website includes: Buyers Guides for reverse mortgage lenders, gold IRA accounts, medical alert systems, hearing aids, Medicare supplement insurance and more; retirement planning resources, such as investing for retirement and retirement income; and information about senior living, including retirement communities, assisted living and memory care.

100+ Ways to Save Money on Healthcare Costs

This comprehensive guide for seniors on covers basic information about Medicare, but it also has helpful tips about dental care, eye care, savings on prescription drugs, home assistance discounts, and even grocery store and restaurant discounts.