PRACTICAL TALK ON RETIREMENT ISSUES
Work pensions affect Social Security benefits
By Crispin Sargent, CSA

In the public sector - federal, state or county governments, school systems, etc. - some workers earn a pension that substitutes for Social Security. Other workers - usually in the private sector - earn Social Security benefits. Can you double dip? Yes, but your Social Security retirement and disability benefits may be reduced according to one of the following rules:

• A government pension offset is applied if you receive a government pension and also spouse or widow(er) Social Security benefits. If, for example, your monthly civil service pension is $600, two-thirds of that amount ($400) is used to offset )reduce) your spouse/widow benefits. Say your widow's benefit is $500; the $400 offset is deducted, leaving you with $100. You get $700 total; $600 from your pension plan and $100 from Social Security. Pending legislation may change these rules.
• The windfall elimination provision affects those who earned a pension and also worked for employers paying Social Security taxes long enough to qualify for retirement or disability benefits. The formula protects workers having lower pensions by ensuring that Social Security benefits are never reduced by more than one-half of the pension amount. Military retirees are not affected by this provision.

Learn more by visiting www.seniors.org/articles/0800/wep.html or contact Social Security toll free at 800-772-1213.

GRANDPARENT CENTRAL
Grandparents Raising Grandchildren
By Marie Dykes

If you have full-time responsibility for raising grandchildren, you are a trend setter. Statistics provided by AARP are staggering. Six percent of all children in the United States under age 18 - 4 million kids - are growing up in grandparent-headed households. The incidence of grandparent-headed households is up 76 percent since 1970 and up 19 percent since 1990. Almost one-fourth of these grandparents are over 65.

The store behind the numbers points to problems within the middle (parent) generation, such as death, illness, divorce, immaturity, incarceration, substance abuse, child abuse or neglect. Out of love and a feeling of responsibility, grandparents step into parent the abandoned children of their children.

Raising grandchildren, however, poses unique challenges.

Sometimes adult children readily relinquish parenting responsibility but continue to interfere in parenting decisions made by the custodial grandparent. Children experiencing the hurt and anger of abandonment are often hard to nurture and discipline. And grandparents find that their own age and physical limitations make parenting particularly difficult.

Those facing this challenge can take comfort in the fact that they aren't alone. There is a support network in place and growing. Contact AARP Grandparent Information Center at 202-434-2296 for information and referral to local support groups. Subscribe to the free newsletter, Parenting Grandchildren: A Voice for Grandparents, by writing AARP at 601 E Street, N.W., Washington, DC 20049. Or send e-mail to gic@aarp.org.

YOUR MONEY
What's Your Ticket To Bypass Probate?
By Steven Warden, Esq.

Popular estate planning strategies often include the establishment of a living trust. There are, however, other relatively simple strategies to prevent courts, attorneys and the government from becoming "beneficiaries" of your estate. Here are a few ways to ensure that your assets go directly - without passing through probate - to your heirs or other beneficiaries.

Give your money away before you die - up to $10,000 per individual per year is free of gift tax.
Set up payable-on-death arrangements for bank accounts.
Name beneficiaries for life insurance policies, pensions and retirement accounts.
Create joint tenancies for property.
Transfer title to property before death (lifetime gifts).
Large and complex estates involving real and personal property or complicated wishes for distribution usually benefit from the establishment of a living trust. Small to moderate estates, however, can use the above strategies to fit the remainder of estate assets under the probate threshold - anywhere from $10,000 to $100,000 depending on state law.

Just because probate gets a lot of negative press doesn't mean you must avoid it at all cost. Find out about the laws governing probate in your state. Then consult with your legal advisor to explore whether it's to your advantage to avoid probate.

END OF LIFE PLANNING STRATEGIES FOR SENIORS
Pay Now, Die Later
The case for pre-need funeral planning
By Ken Klein, CSA

Today, nearly one-third of all funerals in this country are planned and paid for in advance by the deceased. The logic is evident if you've ever made funeral and/or burial arrangements for a parent, spouse or child. Pre-planning ensures that your wishes are carried out, the price is guaranteed, and your family won't have to make stressful decisions.

Pre-need funeral contracts offer one of two payment mechanisms.

1. Life insurance may be the pre-payment plan of choice and can be purchased through the mortuary or from your own insurance agent. Once funeral cost decisions are made, you purchase life insurance equal to the value of the funeral with the proceeds assigned to the funeral home. You can pay for the policy in a single payment or monthly premiums. Some policies pay the remainder of the premiums if you die before the contract price is paid.

2. The other option is a funeral trust. You fund the trust with an amount equal to the cost of the funeral. A portion of the contract price, as well as income and appreciation on the trust, go to the funeral director. If Medicaid eligibility is an issue, choose an irrevocable trust so that this money is considered an exempt asset.

It's possible, of course, to set aside money for funeral costs in a private savings account with your executor as the beneficiary. But it's also wise to formalize your funeral arrangement choices to relieve your family of that responsibility. And, remember that funds held in private savings or revocable trusts are not sheltered in Medicaid spend-downs.

The best advice? Shop around before you decide. Prices and benefits vary, as they do with other consumer goods and services. Look for value-added services that aren't otherwise available. Deal with funeral directors whose reputation is positive. And always consult with family or other trusted advisors before you buy.

Memorial Societies
Consumer alliances offer information and price control

Funerals are the third most expensive purchase of a lifetime, after home and transportation. One reason for the high price is that grieving families often rely on the funeral director to set the standards - and the price.

Memorial societies believe that well-educated funeral consumers can spend less and get more for their funeral dollars. The idea comes from the burial co-ops of the early 1900s. Over time, the concept gained wide acceptance, and a national organization - Funeral Consumers Alliance (formerly Funeral and Memorial Societies of America) - was formed in 1963. Unlike for profit funeral or cremation societies, memorial societies have no funeral or cremation facilities and are staffed by volunteers. Members of the Funeral Consumers Alliance are strictly nonprofit, consumer advocacy organizations.

It costs as little as $10 to join a memorial society. Members gain access to local providers of funeral goods and services at a negotiated rate. On the downside, there may not be a participating funeral home in your area.

However, the most important product of memorial societies may be the information they provide about funeral planning. Most provide booklets explaining the language and products of the funeral industry. They also provide forms you can complete with your arrangement choices as well as advanced medical directives, living wills and durable powers of attorney. A helpful list of details that must be handled when someone dies is usually included in the membership booklet.

For very little money, you can become an informed funeral services consumer and support the society's work. Visit www.funerals.org/directory.htm to find the memorial society in your area.

WHO WILL GET YOUR PERSONAL PROPERTY?
Put it in writing

Johann Sebastian Bach's son sold many of his father's irreplaceable manuscripts to support his drinking habit. Sir Richard Frances Burton won fame for his translation of Arabian Nights, but we'll never know if his unpublished manuscripts were historically significant because his widow burned them.

Although historians may not mourn the loss of your personal diaries or collections, it's a good idea to specify your heirs. Even close families wrangle over insignificant bits and pieces. Personal property too inexpensive to be included in a will often takes on great sentimental v value after you are gone. And sometimes, as illustrated above, family members are not the best stewards if the item lacks meaning for them.

For this reason, attorneys advise that you make a "precatory list". Although not legally binding, the existence of such a list expresses your wishes about future ownership of personal objects. In addition to specifying gifts to family members, you may want to donate, for example, your collection of books or artifacts to a university, library or museum. Consider also the disposition of business objects that you value.

There is no particular format for a precatory list. Simply record the item and indicate who is to receive it. Then let a family member, your attorney or the executor of your estate know that the list exists. And if you have any doubt that your wishes will be honored, specify important personal items in your will or give them away before you die

Centenarian Salute

Fred H. Hale
By Lynn Peters Adler, JD

Last year, Fred Hale turned 110, and he still enjoys reading daily newspapers and the Reader's Digest. He recently underwent two cataract operations to prolong his enjoyment of life - a normal decision for a man who drove a car and maintained beehives until he was 107.

Born and raised in New Sharon, Maine, Fred was married to his sweetheart, Flora, for 69 years. They had give children, only two of whom are still living. He worked for Railway Mail Service sorting the mail aboard the train from Bangor to Portland and Portland to Boston. "I developed a system of sorting so efficient that I always had the complete carload of mail sorted when the train finished its run", he remembers. This job exempted him from the World War I draft. Instead, he served his country in the Maine National Guard.

He retired in 1956 but continued his lifelong love of active pursuits - gardening, hunting and beekeeping. A beekeeper since age 17, Fred attributes much of his longevity to the use of bee pollen and honey. In his 100th year, he was the only hunter in his family to bag a deer.

Fred lived independently until he was 107, when he moved into a small group home - "…the best room at the end of the hall", he says. Nearby flower beds and pine trees made him feel at home. Then last October, Fred left his beloved Main and moved to Syracuse, N.Y. to be near his son. He reads the local newspaper, goes out for dinner, takes drives with his family and plays cards with new friends. Fred known that it's never too late to change if it will improve your quality of life.

Lynn Peters Adler is founder and director of the National Centenarian Awareness Project. If you know of someone 99 years or older, contact Lynn at 1-800-243-1889 or send e-mail to adler100s@aol.com. Visit NCAP on the Web at www.adlercentenarians.com.