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Featured Advisor



Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management

City:Northbrook

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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COLA, Medicare and Retirement Security

Higher Medicare premiums could offset the 2013 COLA. Are annuities the answer? See what affluent investors have to say.

| BY Adriana Reyneri

An expected increase in Medicare Part B premiums could offset a 1.7 percent cost-of-living adjustment (COLA) for Social Security benefits in 2013, according to an announcement yesterday from the Social Security Administration that illustrates the ever bigger bite healthcare is taking out of retirees’ resources.

 “This reflects the growing trend of health-related expenses eating into retirement income,” said Cathy Weatherford, president of the Insured Retirement Institute, a Washington, DC-based trade association representing insurance companies issuing annuities and other retirement products. In a statement released yesterday, Weatherford said, “The cost of health care is a real risk that can jeopardize one’s retirement security.”

Medicare Part B premiums, typically deducted from Social Security payments, are projected to increase by more than 9 percent in 2013, according to the IRI. Any offset of the COLA, designed to protect seniors from inflation, will reduce the overall purchasing power of the 56 million elderly Americans receiving Social Security benefits. Nancy Altman and Eric Kingston, co-chairs of the Strengthen Social Security Coalition, predict that increases in monthly Medicare premiums will “eat up all of the COLA of some beneficiaries and much of it for many.”

The insurance industry addresses widely held concerns over income and health care costs in retirement, but the products appear to be a hard sell with investors, according to Millionaire Corner research. American families, even the most affluent ones, express a high level of worry over their retirement security according to our research , yet only a small share of millionaires have purchased long-term care insurance or annuities, insurance products to pay for nursing home care and provide income in retirement.

According to the IRI, a healthy 65-year-old male can expect to spend $369,000 on health care expenses over the remainder of his life, while a healthy 65-year-old female faces cumulative costs of $417,000. Weatherford said, “Now more than ever, consumers need to be aware of how quickly health-related expenditures can decimate retirement savings.”

Unexpected medical expenses represent the single most significant source of debt for investors age 60 and older, according to a Millionaire Corner survey conducted in April, yet, only 36 percent of millionaire investors own a long-term care insurance product, and an even smaller share owns annuities.

High premiums and a reluctance to face issues surrounding aging may be deterring investors from considering long-term care, according to industry analysts, while investors may be avoiding annuities, because they feel they will do better and enjoy more liquidity if they manage the money on their own.