Job Blues for Gray-Haired Workers

Lower unemployment numbers are great news for everyone, except older workers, says CNNMoney.com. According to the most recent statistics from the Labor Department, while jobless claims are falling overall, the number of unemployed workers over 55 years old is holding steady.

What does that mean? Companies are hiring all right, but only younger workers. "All the gains we've seen from the peak last fall to now, they've gone to people less than 55 years old," said Heidi Shierholz, a labor economist for the Economic Policy Institute. Furthermore, some experts also believe that the unemployment rate for older workers is artificially low, as they tend to become more discouraged and stop looking for work. And unemployment only counts people who are actively seeking employment.

Overlooking older workers is bad news for employers too. According to Tim Driver, CEO of RetirementJobs.com, older workers bring incredible experience and a lifetime of skills to their jobs that younger workers just can’t duplicate. In addition, older workers tend to keep stay in jobs longer, reducing turnover costs for employers.

Read the entire article here.

One in five older Americans is a victim of financial fraud

We hear about it all the time—an older adult being scammed out of their money. A survey released Tuesday as part of World Elder Abuse Awareness Day has found that one out of every five citizens over the age of 65 has already been financially taken advantage of. That’s more than 7.3 million older Americans!

A new program seeks to train medical professionals to assess when older patients might be likely to fall prey to elder investment fraud and financial exploitation. According to Marketwatch.com, this new program, a new partnership between the Investor Protection Trust (IPT), the North American Securities Administrators Association, and the National Adult Protective Services Association (NAPSA) was based on a pilot program that brought fines and prison sentences cases of elder abuse—of note is the case of Edward S. Digges Jr. who raised at least $10 million from about 130 Texas investors, the majority of whom were elderly.

Marketwatch.com reports that according to the Don Blandin, the president and chief executive of IPT, the centerpiece of the new program is the Clinician's Pocket Guide, which contains a list of questions that medical professionals can ask older patients. Doctors can get a sense of their patient's financial capacity by asking the following questions:

• Who manages your money day to day? How is that going?
• Do you run out of money at the end of the month?
• Do you regret or worry about financial decisions you've recently made?
• Have you given power of attorney to another person?
• Do you have a will? Has anyone asked you to change it?

If the answers to those questions raise suspicion, the doctors are then urged to probe for further details by asking whether the patient is having any of the following concerns:

• I have trouble paying bills because the bills are confusing to me.
• I don't feel confident making big financial decisions alone.

Elders at greatest risk of being scammed are those with mild cognitive impairment who can perform most daily functions, but have trouble or become confused with others, such as following their medicine regimen or managing their finances. That will be a lot of people. According to at least one study, more than one-third of the 25 million people over age 71 in the U.S. either have Alzheimer's or mild cognitive impairment. Therefore, that would represent many potential scams.

IRS Taxes and the Elderly

These days it seems like the recession is affecting almost every American. Unfortunately, one of the groups being hit the hardest are elderly taxpayers. Recent studies are even showing that many retired citizens are being forced to rejoin the competitive work force in order to make ends meet. Some people mistakenly think that the IRS treats senior citizens unfairly, but this is not necessarily the case. As you will see, the IRS has a special set of laws designed to help elderly citizens in this country.

The Elderly or Disabled Credit

One specific credit available to struggling senior taxpayers is the Elderly or Disabled Credit. The exact amount of the credit will vary depending on your unique financial situation and is somewhat difficult to calculate. Basically, you will need to start with what the IRS calls your “initial amount” which will be between $3,700 and $7,500. Next subtract any non-taxable pensions or social security income, then reduce it by a percentage of your excess adjusted gross income. Finally, take that total and multiply it by 15% to find out the credit you quality for. As you can tell, calculating your credit is a tricky process and I highly recommend getting help from a qualified professional. However, if you do want to calculate it yourself then checkout IRS Publication 524.

Qualifying for the Credit

Essentially in order to claim the Elderly or Disabled Credit, you need to be either elderly or disabled. According to the IRS, you either need to be over the age of 65 at the end of the tax year you want to claim the deduction, or meet specific qualifications to be considered disabled. If you are on permanent and total disability, or had taxable disability income during the year then you may be eligible to qualify.

Social Security Taxes

Another issue facing elderly taxpayers in the U.S. is social security taxes. Oddly enough though, social security benefits were originally not considered taxable income. It was not until 50 years after the social security system was created that the IRS began levying taxes on them. Just like with regular income taxes, the percent of your social security income that you will need to pay to the IRS will vary widely depending on your income from other sources. In some cases this can be as much as 85% of your benefits, and in other cases you might not get taxed at all.

Private Retirement

It is safe to say that the tax advantages and disadvantages of private retirement are not so black and white. There are several different ways for a taxpayer to plan for their retirement, but most Americans usually go with either a traditional or Roth IRA. Generally speaking, when you go with a Roth IRA contributions are not tax deductible, but future withdrawals are not taxed. However, with a traditional IRA you can deduct your contributions from your taxable income, but you will have to pay taxes on future withdrawals. There are also specific rules regarding penalties for early withdrawals, and rules about being required to take minimum withdrawals once you reach a certain age. Since deciding on a retirement plan will affect the rest of your life, I highly recommend speaking with a financial planner or qualified expert to find the plan best for you.

Taxing Consumption vs. Income

Currently elderly Americans have a pretty good tax situation in this country. In fact, recent studies show that high-income senior households pay significantly less in taxes then non-elderly households in the same income bracket. However, if there were a major change in our tax structure, such as a value added tax or other type of consumption tax, then many experts predict senior citizens would bear an unfair financial burden.