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Harikrishna Majumdar
WELFARE CONCERNS FOR ELDERLY IMMIGRANTS ADDRESSED
By Harikrishna Majmundar

FREQUENTLY ASKED QUESTIONS

Q. I have invested all my savings to buy a triplex in an expensive area hoping to earn good rental income. As there are liquor and convenience shops all around, I do not get adequate rent. My son pays mortgage. I practically do not get any income as the taxes are high. When my wife and I became eligible for Supplemental Security Income (SSI), the Social Security officer pressurized me to sell the triplex. He feels that with so many resources I am not eligible for welfare. I have retained the triplex to get advantage of inflation in real property. Is it necessary for me to sell the triplex? If my wife and I do not get SSI, we shall be compelled to sell our beloved property. Is there any way to resolve this problem?

A: You need not sell the property. It is exempted for the purpose of computing your resources. From the gross income you get, you can create a fund for taxes so that the months in which you do not pay tax, your gross income would be above the prescribed limit. As the mortgage is being paid by your son, you would get SSI at the reduced rates.

Q: Before applying for SSI, I bought an expensive car though I do not drive. My grandchildren would escort me to my friends, library, hospital and my friends. My SSI officer says that the value of the car is more than $4,500. He says the additional amount -- the difference between the price of the car and $4,500 -- is my resource and as it is over the prescribed limit, I am not eligible to get SSI. Please state the correct position.

A: The re-sale value of the car is not a resource because one car is exempted in computing the resources. Please ask for review/appeal to get the SSI.

Q: I am on green card. I have more than 40 credits but my pay was not enough to get me a sizeable amount of Social Security. If I go to India and stay there, shall I have to come back every six months to continue my eligibility for getting SSI?

A: Not necessarily. Please obtain a pamphlet issued by Social Security administration. The title of the pamphlet is “your payments while you are outside the United States.”

Q: I am getting disability SSI/Medicaid. The amount is not enough and I feel short of about $300 per month. Though I am disabled, I can do some work of and on and get some $600 per month on an average. I was told my SSI/Medicaid would be discontinued because I am not yet 65 and I am able to work. What should I do as $4,600 wouldn’t be sufficient to cover Medicaid expenditure?

A: As the state encourages disabled people to work, your SSI/medical will not be discontinued. In addition to whatever you get as your pay, they would give you the present SSI and continue the Medicaid. As you get income by earning, the first $85 is free and $208 per month would be deducted from your SSI. Do note that the administration is sympathetic toward those who work.

Q: After six months, I shall be completing 65 years and become eligible by virtue of age and citizenship for SSI. As I am widowed and staying with my son, I may have to pay him a small amount for my expenditure – food, shelter, clothing, etc. I have $3,000 here in USA and some Rs. 30,000 (about $700) in India. As it is more than the prescribed limit, I shall not get SSI and Medicaid. I am getting nervous and wonder if I will have to run away to India. Please advise.

A: Though you have a little more than the prescribed limit, you can spend the amount before you apply for SSI. Please try to bring funds from India. The total resources are about $3,750. You make monthly payments to your son, you may buy computer or clothings or a second-hand car. As you are paying monthly say at $1,000 to your son, you would get full SSI. If you are able to spend down your resources, you are allowed to repay your debt to bring down your resources.

These questions and answers are courtesy of Harikrishna Majmundar of California, author of “Mapping the Maze: A Guide to Welfare for Elderly Immigrants.” He has advised several hundred welfare applicants. A copy of this 2003 published book is available for $10 from H.J. Majmundar, 450 Melville Ave., Palo Alto, Calif. 94301 or send an e-mail to haripremi@hotmail.com if you have a question.





Bijan Mohseni
RETIREMENT PLANNING: AMERICANS OFTEN UNDERESTIMATE NEEDS
By BIJAN MOHSENI

Part 1

Americans are living longer. Life expectancy for Baby Boomers (born between 1946 and 1965) is greater than for any previous generation. National Center for Health Statistics tables show that life expectancy increased by 30 years during the 20th century -- from 47 in 1900 to 77 at the millennium. And, figures compiled in the Society of Actuaries' 2000 Annuity Table estimate the life expectancy of men 65 years old to be another 15.9 years. At the same age, women can expect to live an additional 19.2 years.

What do these numbers mean to you? The good news is that your retirement may be years longer than you thought it would be. That also could be the bad news. It all depends on how well you have planned and saved for your retirement. Longevity is, increasingly, becoming a major factor in retirement planning.

Recent surveys have sought to determine whether Americans are aware of the implications of longer lives in relation to future sources of income. Questions concerning Social Security, pensions and individual savings -- referred to as a "three-legged stool" in the traditional paradigm of retirement income -- were included in the surveys. These surveys have found major misperceptions regarding these three important retirement issues. Let's look at a few of these misperceptions and their potential impact over longer lifespan.

Social Security

The Employment Benefit Research Institute (EBRI) 2003 Retirement Confidence Survey found that the average retirement age is 62. When EBRI asked respondents when they thought they could receive full Social Security Benefits, 51 percent believed that they could claim full benefits at a younger age than is actually the case. Most people working today won't be eligible for full benefits until age 67. Since Social Security accounts for close to 40 percent of the average retiree's income, this lack of awareness can adversely impact plans about when to retire, how much Social Security income to expect and how much more money will be needed in retirement income.

Pensions

Defined benefit plans are traditional employer-funded retirement plans that provide income for life. These plans are guaranteed (up to certain limits) by a federal agency. According to the Department of Labor, the number of these plans has dropped from 139,000 in 1979 to 56,000 in 1998. The number of plans and workers covered continues to decline.

Defined contribution plans (401(k) s), on the other hand, are mainly employee-funded. Between 1979 and 1998, the number of these plans increased from 331,000 to 674,000, according to the Department of Labor. Here, the individual employees are totally responsible for deciding how much to contribute, where to invest, and how the money will be distributed at and through retirement. They assume all the risks and bear all losses. According to Merrill Lunch’s 2003 Retirement Survey, 50 percent of Americans believe that these plans are guaranteed by law up to certain limits. They are not. And as we saw a few years ago, losses close to, or during, retirement can prove devastating.

Savings

In the National Retirement Planning Coalition's (NRPC) 2002 Survey of Prospective Retirees, 31 percent of the respondents reported less than $50,000 saved in defined contribution plans, with another 40 percent having between $50,000 and $199,999 in such plans. Personal savings excluding defined contribution plans and home equity is likewise modest, with 38 percent of the survey's respondents having less than $50,000 and another 36 percent reporting $50,000 to $199,999. Other recent surveys report similar figures.

How long would these nest eggs last? People often use 85 as an assumed life expectancy when calculating retirement needs. Remember the life expectancies mentioned earlier? Those actuarial figures are averages. So, half of those 65-year-old males will live past 80, while half of the 65-yearold females can expect to live past 85. According to the Census Bureau, there are presently more than 60,000 Americans over 100 years old. What if you are one of the estimated 600,000 centenarians in 2040 and you had used age 85 in planning? For 15 or more years, you might find yourself totally dependent solely on Social Security and perhaps a small pension income. This is what's known as longevity risk -- the real possibility that you might very well outlive your money.

Bijan Mohseni of the Business Planning Group of Tampa offers securities through AXA Advisors, LLC (member NASD, SIPC) and annuity and insurance products through an insurance brokerage affiliate, AXA Network, LLC and its subsidiaries. He can be reached at 4890 W. Kennedy Blvd., Suite 800, Tampa, FL 33609 or call (813) 282-9088.



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