Recent Articles Of Interest To All
Following articles recently appeared in our Newsletter or derived from other articles of interest to retirees. Click on the title of the article to link to it.
There has been a lot of press on the subject of telemarketing and other marketing fraud. Much of the fraud is focused on seniors, though I object to the view that seniors are less able to discern skullduggery. (But for those of us with old parents or friends, here are some pointers, most of which pertain to both phone calls and visits to the door.)
Computer Viruses I have Known by John Rudy
I know a fair amount about computers having spent my entire career worrying about them, but nothing prepared me for what happened a couple of weeks ago.
I run both Semantec and Microsoft’s Security Essentials. That had been recommended though now there is talk that the two might conflict with one another. I am very careful not to open attachments I am unfamiliar with and also careful to avoid suspect web sites.
Here is what happened.
From that point my machine was infected and the infection got worse day by day until I was unable to open any SW including a variety of malware programs. Before total infection I ran Malwarebytes (it is free and you all should get it and run it periodically) and it located two problems, one of which was Miro. However, the uninstall could not eliminate all of it.
Eventually I took the machine to Staples which took nearly a week after initially failing on all their “simple” solutions. They had to rebuild the Registry. Rebooting did not work, not did starting in safe mode. I thought that they were going to have to rebuild the machine from scratch. That is OK in terms of data (including favorites and address book) but I would have lost all the SW that I have installed since purchase.
One thing I learned was that on some Malware clicking ANYWHERE on the bogus window starts the acceptance process. I think, but am not sure, that shutting down the machine, instead, will work.
Another is to save a list of all the SW you have on the machine so that you can re-install it if necessary. If it is purchased and you have the original disks that is best, though you will be re-installing what might be a very old version.
RSVA (Retirees School Volunteers Association) presents a unique opportunity for Raytheon retirees to use their many years of engineering experience to add significant value to the STEM(Science, Technology, Engineering, Mathematics) education process as the next generation of students meet the challenges they will face. Innovation in technology, critical thinking and creative problem solving are all skills that we have learned and practiced in our careers at Raytheon. What better way to spend your retirement than reinforcing these skills for today’s students.. We in RSVA do this by aiding teachers in the classroom, helping with labs and demos, mentoring after school science, math and robotics clubs, participating in curriculum development, and many other activities. Hours are flexible and tailored to each task. Our annual meeting will be held at Raytheon Global Headquarters, Waltham MA in the Amphitheater on November 16, 2011 from 1:30 PM-4:00PM, with several guest speakers in the STEM education field giving presentations of ongoing and future efforts. All retirees are invited to attend by responding to the RSVA contact listed below.
To learn more about RSVA and how you can become part of creating the future for our STEM students, contact Marty Schecter, President RSVA at email@example.com, 508-736-7139, and check out our website at www. rsva.org .
When I Die Checklist By John Rudy
Some years ago a friend suddenly passed away. Both he and his spouse were unprepared for this and they had not recorded the large amount of information needed for her to move ahead with her life. This prodded me to develop a document called "When I Die". I built one for me and for my wife, and though the two are very similar they are not identical. I then removed all the personal data and created a template to share with you. Because of the length of the template I will summarize it here, but the full template is on the ARR web page.
Not everyone will want to go into the detail that I did. Not all sections are applicable to everyone. But the nice thing about having the template is that you can tune it as you wish. What follows are the sections I developed and a few comments regarding the contents. My completed document runs 20 pages!
When I Die Template By John Rudy
This document template was prepared to help the retiree (or anyone else) capture all the information that should be made available to a spouse or other heir. This is particularly important when one spouse or other heir maintains most of the important information and the other is unaware of it. It is important to review this document on a yearly basis and keep it current.
Last Review Date: mm/dd/yyyy by _____________
1. Document Storage
2. Funeral arrangements, Obits, and Contact List
3. Legal documents
5. Our House(s)
6. Timeshare Property
9. Pins, Passwords, Account and Telephone Numbers
10. Financials: Bank and Brokerage Accounts
11. Computer and Electronics
12. Spouse information
13. Personal Property
1.0 Document Storage:
2.0 Funeral Arrangements, Obits and Contact list
In case of death, the following should be called:
is available to obtain current advice. They keep current on funeral parlors, cremation, etc. and know the scams, best prices, etc.
2.2 Obit Information
You can write your own obit and periodically keep it up to date. Newspapers always do this for famous people. Use this section to state where obits should be sent and, if desired, their content. Note that some obits cost per word, particularly in large city newspapers. View some current obits to get a good idea of typical content.
2.3.1 Organizations. The first group of people to contact are those with whom one does business. They will need to know in order to change accounts.
Primary Care Physician
Healthcare Provider. Exact name and Subscriber number. How is it paid for. For example, charges might be deducted from a pension check. In which case contact the company and the healthcare provider.
Long-term Healthcare. If applicable, state provisions, name, address, phone, etc.
Social Security Administration. If applicable with address, SSN and exactly what benefits you receive. Typically benefits cease on the 1st day of the month of death. So don’t die until the last day of the month.
Insurance: Agent and/or Agency. Address, Phone, email. Make sure that you include all policies. i.e., house(s), car(s) and anything else. The insurance papers are in the xxxfile but the Agent has all the appropriate material. He knows when payments are due, etc.
Brokerage #1: There should be one sub-section for each brokerage account. Agent, account number(s). If more than one, state what is what and which are joint or in a trust. Names on accounts may have to be changed and the Power Of Attorney will be needed
Accountant (if applicable): (does taxes)
Retiree Association (status)
Lawyer: (if he drew up the will, trusts, etc he probably has the originals)
Any other organization
US Passport Service.
2.3.2 Individuals to contact. This is much harder as many folks no longer have a physical phone book and the email address book contains a huge number of acquaintances that one would not want to bother with. TO BE FILLED IN
3.0 Legal Documents: Will, trusts, Power of Attorney, etc.)
The wills and trusts were written by Mr. X, and most recently updated in 200x. The lawyer has the masters and copies are stored at ………. If applicable, computer PDF files were sent to heirs. It is wise to have a DVD of the will and its supporting documents in the file cabinet and the full file on the computer.
If I die, [spouse, children, …] go to see the lawyer. Depending on ages and competence of heirs, you might suggest that they be accompanied by someone.
ALL Location of wills and other documents [safe deposit, heirs, lawyer]
ALL locations of Living Will, Power of Attorney
4.2 Long-term Healthcare (if applicable).
4.3 House and Automobile Insurance. See below under House information.
Mortgage situation (if paid off, when). Who holds the mortgage, name, company, residual amount, payment schedule, contact name, address, phone, fax.
Tax benefit, if any, on previous property.
House value (2009) is $xxxK per the Yahoo real estate locator:
5.2 Household Insurance
5.3 Umbrella Policy, if applicable:
5.4 Car Insurance: Same information as for the other insurance
5.5 Miscellaneous House Information unique to your equipment/house
5.6 House Services: All services, like snow plowing, screen repair, etc. are detailed in the file: "Key Names and Places.doc "
5.7 Lights on timer: details on how they work
Gas and electric payments records: Yearly totals are in a file "Utility Costs.xls"
6.0 Time Share Property (if applicable)
Car Inspection as applicable
Massachusetts Inspection is yearly, on the anniversary of the purchase date of the automobile. Every other year the inspection includes exhaust, etc. Massachusetts no longer reminds you about renewals!!!
There is a folder for each car which lists all repairs made to the cars since they were bought. Repair shop information: name, address, phone, etc.
There is some general automobile maintenance that should be done to ensure that the cars don't fall apart
About every six months or 5000 miles:
Tire wear and pressure (free rotation ??)
Water in the radiator (especially in the summer). Check when the car is cold.
Massachusetts charges an excise tax of $66/1000 of car value. A tax bill comes once a year, usually in February, and is paid directly to the Town.
Accountant (if applicable) does what, and when. Where is data stored to make taxes easier to do.
Identify statements that are received from banks, brokerage firms, town, banks, etc. What other files are stored and where?
9.0 Pins, Passwords, Account and Telephone Numbers
Recommend the following: Over the years, largely thanks to the Internet, we have accumulated a huge number of individual accounts most of which have account numbers, passwords, etc. They also usually have a phone number where they can be reached in an emergency. I have a file where all this information is maintained called "pins and passwords.xls". This file also includes all frequent mile data and a list of all the cards that are in my wallet. In addition this file shows which accounts are automatically charged against either our credit card(s) or against the checking account. In 2010 these were the affected accounts:
10.0 Financials: Bank and Brokerage Accounts
11.0 Computer and Electronics
11.2 iPods or MP3 players
11.3 Camera. All pictures from the camera are in the Picture folder on the computer.
12.0 Spouse/Children medical information as applicable
12.3. Spouse’s Medical (if applicable).
To the extent that the house is filled with expensive belongings and some of the valuable items might not be obviously valuable: Provide photographs and documented in a computer file. One might have some or all of the items listed below:
Now that we have more time available, many of us are doing more traveling. And that brings up the issue of Travel Insurance and similar protections. I used to always take it out but when our parents passed I figured it wasn’t necessary and omitted getting it.
We had an unanticipated medical problem necessitating the cancellation of a trip three weeks before lift-off. So now I never leave home without trip insurance. Note that you only need to cover your out-of-pocket costs. So you might get a lower amount initially and, as you pay for the rest of the trip, increase the value of the policy.
Here is some useful information about a site called www.squaremouth.com. It does not sell insurance. This site:
· Explains all about travel insurance and the various coverage types that can be made available. The differences are far greater than one might suppose.
· Provides quotes after you give it about 10 pieces of data (I played with the inputs to watch what happens when varying ages, length of stay, destination, etc)
· Gives a side-by-side comparison of identified policies. This is great. The URL below shows an actual comparison between two companies for some arbitrary inputs so you can see the type of output it provides
When traveling farther a field, such as to China, or on a safari, there are additional considerations, such as accessibility to adequate medical attention. Here is some useful information.
You can also use their website to create a travel planner
4. The Flying Doctor's Society of Africa (http://www.amref.org/ ). I had the safari travel company handle this for me for $50. They will fly you to medical attention if you are in the wild, far from a hospital. There is a similar organization for Australia.
----- Original Message -----
From: David Hathaway
Sent: Wednesday, March 03, 2010 8:06 PM
Subject: [LexingtonComputerGroup] Channel 2 Greater Boston, this evening.
folks, I don't imagine that many of you caught the section Emily
Time to Retire: Trials and Pitfalls?, Compiled by John Rudy
This information has been assembled by multiple Raytheon folks and refers to the LEGACY Raytheon retirement. There are dozens of retirement plans across the company. Please use the information in the article to provoke thought and areas to investigate yourself. Obviously we can not cover all cases or particular circumstances.
OPTIMUM RETIREMENT TIME
1. Under the new PTO policy it looks like December 31, is the time to retire to optimize your PTO Time. At one point this document said “You are able to carryover 40 hours of PTO plus any old Legacy Raytheon Vacation you were able to bank.” This is no longer true. The 40 hours of carryover must be used by approximately September 1st and all the legacy vacation was bought back over a three year period that ended early in 2008. You could accumulate a maximum of 200 hours of PTO by your retirement year-end. The trick is not to take any PTO the year during which you plan to retire and make sure you have carried at least 40 hours from the prior year if you plan to retire prior to September 1st. If you can sell back 200 hours of PTO plus your Legacy Vacation, it will translate to a significant improvement to your monthly pension, it’s about a 1% increase per month for each 100 hours of sell back. The money is in the last check and it is averaged over 5 years. Just remember that selling back time means more money in your pocket per month for life, you just have to live to collect it.
2. However, if you are RBI eligible or have any of the various kinds of stock the equation becomes more complicated. First, stock comes due in May, so by working the extra 5 months there might be a windfall
3. Remember that Pension is calculated on the highest 60 contiguous months. Because we are paid twice a month some months (two) will have a third paycheck. So if boosting your last month with the PTO knocks off only a slightly smaller month at the other end then the improvement will be less than anticipated. This can easily be calculated as Raytheon sends out a spreadsheet (unfortunately only on paper) with your income from each month.
4. The pension is not indexed for inflation, though Social Security is, so think about how many years you have to live before figuring that you can retire.
5. It is really good to retire in a month with three paychecks (like July 2009). That boosts the pension. In fact July, 2009 was even better as the 7/30 paycheck closed out the previous week so there was a fourth paycheck covering the last week, and then a fifth paycheck to cover the unpaid PTO. So for a person making $120K per year that extra check is worth $6K. Averaged over 5 years it is $1200. At a 50% pension that it $600. If you live for 20 years that is worth (ignoring cost of money) $12K.
RETIRING BEFORE (60) IS NOT A GOOD OPTION
1. WARNING If you retire at (55) you loose 35% of your retirement and can never purchase Raytheon medical at the group rate again.
2. WARNING If you voluntarily terminate employment before (55) you will not be eligible for your full Raytheon retirement (100%) until you are (65), anything less and you will take a big reduction, i.e., at 55 you get 50%.
3. Pension is taxable income.
SUBMITTING YOUR RETIREMENT PAPERS
1. No sooner than (90) days before your retirement date. Some people have done it within the last month, and retirement can be cancelled until nearly the last minute.
2. All retirement dates begin on the 1st of the month following the month that you retire. (Don’t retire on the 15th of the month unless you don’t care about being paid for (2) weeks.
3. Your first retirement check arrives approximately 3 weeks after you retire. Checks are monthly, not bi-weekly
4. You can change your mind after you have requested your retirement papers and even if you have submitted your papers. Once you receive your first retirement check, it is too late; you can never change your election again.
5. Photo copy of your birth certificate is sufficient; otherwise you require two documents that verifies your age. (License or Passport) will work. No expired documents, two documents verifying age required.
6. You have to also provide your spouse’s birth certificate if they are going to get any portion of your retirement.
7. If you are married and choose an option other then a joint and survivor, your spouse must sign-off on any option that does not include them and it has to be Notarized. See a separate discussion on this subject.
8. The retirement center is currently taking up to (4) weeks from the time you call for your papers, until they show up at your house. Each step in the process can be time consuming, so start early.
9. According to the retirement counselor, you do not get your final retirement number when you receive your papers. That will come later, after your last paycheck. Your last paycheck will include PTO sell back. Typically you will get your last paycheck on time. A couple of weeks later you will get a check for any legacy PTO or accrued PTO. You will not get your first retirement check until near the end of the first month you are retired. After that you will get checks at the beginning of each month.
10. Papers MUST be returned to the Retirement Center at least 30 days prior to retirement. You receive a note that states that they have been received, so if you don’t get one, beware.
When you call for your retirement package you will receive (2) packages. Your Benefits Calculation Package & forms and the Raytheon Retirement Guide & forms. Note that they do NOT take into account future raises, RBI or other bonuses, etc. So doing it too early will give an incorrect number.
BENEFITS CALCULATION PACKAGE
1. I recommend that you call the Benefits Center and ask for your Benefits Calculation Package (1) year before your planned retirement date (actually I have requested and received a package every year since my 55th Birthday). The numbers won’t change that much in a year and it will give you a chance to review the package. If you do that ahead of time, it will save you a lot of aggravation when you finally submit your papers.
2. The final benefits calculation package contains the following forms:
a. Tax Election for Recipients of Raytheon Pension form.
b. Direct Deposit Request for your Raytheon Pension form.
c. Application for Retirement and Pension form.
d. Waiver of Right to Receive Notice as to Form of Benefit form. By Federal Law, a company must give you at least (30 days) to review your retirement papers. The benefits center will not start the process until (30) days after they receive your papers, unless you sign this waver. If you are sure of your decision then sign it and send it in with the other forms.
e. New for 2007 are the policy for hiring back retirees and a form acknowledging that you have read and understood the policy. It is mandatory that you sign the form even if you have no intention of coming back to Raytheon. They will not process your retirement without this form. Most of the guards are instructed not to even let you back into the plant within one year, even as a guest!
f. The package states the amount of Social Security that you will be getting. A number of folks have commented that this seems too high so it is a wise idea to validate the number. As of 6/2009 this is ~$28K if you’ve been working enough years and your salary exceeds the Social Security limit of about $100K.
g. You must state the number of deductions you want Raytheon to utilize when calculating your take-home pay. Many people will not remember what they had set up at work. This information is available through the Payroll Office. Since your income will be lower you might not want to continue what you had at Raytheon.
h. If you want your money “direct deposited” you need to supply a cancelled check. Many banks no longer return cancelled checks so take a regular check and write VOID on it instead.
RAYTHEON RETIREMENT GUIDE
The Raytheon Retirement Guide is a booklet that contains the following information (plus more)
1. Information on how to withdraw your contributions to the contributory plan if you want to. Most old timers regret taking out their own money early on as you get penalized at retirement time.
2. During the period prior to 1981, the Raytheon pension plan was contributory. Prior to 1976, you had to be 30 to participate in the Raytheon pension plan. From 1976 to 1981, the age was lowered to 25. At that time, you could either choose to participate in the Raytheon pension plan or have an IRA. You could not do both. If you elected to participate in an IRA, those years will not count as part of your service when Raytheon converted to a noncontributory retirement plan. As a result, your pension calculation times may have starts and stops so check it well.
3. Social Security Benefits Verification. This is an interesting one, but be careful with it. Raytheon uses a Social Security amount based on estimates of your earnings history. Once you retire, you will have the opportunity to submit your detailed Social Security earnings history. This information will be used to recalculate your Raytheon pension. If using the new numbers would give you a higher pension, your Raytheon pension will be increased retroactively from your first pension check. In most cases the Raytheon SS65 estimated number is lower then the Social Security number. This works to your advantage. i.e., do your homework before you exercise this option or you could get burned by ending up with something less than you already have.
4. Income Tax information regarding your pension. It’s taxable.
5. Insurance Information.
6. Medical Information. All the plans and rates.
7. RAYSIP & RAYSOP information.
8. Proof of age form for you & your spouse.
9. Do a complete assessment of options taking into account your age and how long you expect to live. One option being recommended is to take the single life annuity and buying a life insurance policy with the savings over one of the survivor plans. If you are considering this option, you have to plan early to ensure that you are insurable for the amount of the life insurance policy.
10. If you are under 62, look closely at the Social Security Option. Typically if you take the social security option, the break even time is typically 12 years (age 74).
SOCIAL SECURITY CALCULATIONS
1. You should be getting a SS Estimate annually 3 months before your birthday. Once you reach (60), you can call SS at (800) 772-1213 and they will give you an estimate (based on your last full year wages) of what your SS number will be. This is a good check to make sure that Raytheon is using the correct figures. I checked my amount and it was calculated correctly (J. Rudy)
2. Most of us will not be able to collect full SS benefits until we are 66 or older. Check your SS Estimate or contact SS for your full benefit age.
3. Delaying SS can be beneficial if you believe you will live into your 80s. I was told that one could start collecting and then, after some years have passed, pay back what has been received to start receiving money based on a higher rate. I have not validated this.
GETTING ON MEDICARE
Unless you are already on disability payments, you are NOT directly informed as you near 65 that you must sign up for Social Security. As it takes a month to get the Medicare Card this should be done a few months before you turn 65. To be fair to the government, there is a small note within the yearly SS letter we get, but if that is not seen then nothing happens.
1. For most people the last 60 paychecks represent the data used in calculating the maximum pension. In fact it is the highest contiguous 60 months during the last 10 years. Because we are paid bi-weekly and because of bonuses or RBIs the months are not the same. Also the last month may include the payout for unused PTO. The booklet shows all the months of data so you can work the calculations yourself.
2. Total Last (60) Paychecks ¸ (60) – SS@ max at retirement age x (Ray Time*) = Single Annuity Amount (SAA).
3. Two months (different every year) have 3 paychecks. Don’t retire the month before a triple pay. July 2009 was a four paycheck month: July 2, 16 and 30. Furthermore, since the July 30th paycheck covers the two weeks through July 24th there is actually a fourth paycheck covering the final week. HR will call you to ensure they know what you worked this last week. Make sure it is 40 hours; no PTO.
4. Ray Time* = 1st (20) years @ 1.8% = 36%. Remaining years multiply by 1.2%. Note if you were at Raytheon prior to 1981, this time is modified depending your age and whether you joined the contributory plan or not.
5. Remember, your first year of service does not count in the time calculation.
6. If you select the Joint & Survivor annuity, there is another factor that kicks in, depending on whether or not your spouse is older or younger than you are. If they are older, it is to your advantage. If they are younger you get penalized. Here is how it works:
a. 50% Joint & Survivor Annuity = SAA x (90% Add .5% to 90% for every year spouse is older and subtract .5% from 90% for every year spouse is younger). SAA x (90% ± 0.5% year) = Your Amount x .50% = Spouse Amt.
b. 66 2/3 J & S Annuity = SAA x (87% ± 0.66%/year) = Your Amount x 66% = Spouses Amount.
c. 75% J & S Annuity = SAA x (85% ± 0.75%/year) = Your Amount x .75% = Spouse Amt.
d. 100% J & S Annuity = SAA x (80% ± 1.0%/year) = Your Amount & Spouses Amount
6. You must pick one of these options, but the Raytheon default is 50% if you were to die before retiring. So one message is that if you are really sick you should retire and lock in the 100% option. On the other hand if your spouse is really sick use the 0% to the spouse to boost your pension.
BUYING AN ANNUITY
1. One of the options when you retire is to leave $0 to your spouse when you die. There are two cases where this makes obvious sense. (1) When your spouse is not expected to live very long and (2) when your spouse has his/her own pension and it is of comparable or larger size. Utilizing this option increases your pension by about 12% above the 50% option.
2. Based on a casual survey it appears that a small percentage or employees choose this option for a third reason. They decide to use this “extra” money to purchase an annuity for their spouse. This is a very complicated subject and the following notes help one to determine what is best for them:
1. You will be covered under the same plan, unless you move to an area where the plan is not available. Then you will have to choose something else.
2. (2009 data) If you retire at or after (60) medical will cost you at least $630.00 and $37.50 extra for dental per month/per person. Today’s Rates, these rates are going to change (increase) over time. There are 5 policy options that can be found at the Raytheon pension web site. Look them over closely as the premiums vary significantly. For the more expensive plans, like United Healthcare Gold it is closer to $900.
3. Evaluate COBRA closely as an option for up to the first 18 months after you retire. COBRA will drop your cost by about 50%
4. VERY IMPORTANT: In my case (John Rudy) when I retired they reset the deductible for drugs under MEDCO as if the deductible that I had met many months previously had not existed. So watch out for it.
5. Apparently it takes about a month for the COBRA to kick in, though the payments are retroactive. That means that during the intervening month or so you must pay the full amount of medical costs. The moral is to get things done ahead of time so that you can minimize the medical payments during the first month after retirement. Here are the steps:
· After 2-3 weeks you will receive a letter from COBRA. You can fill out a form or do it on-line
· Doing it on-line is best though it is not obvious how to do it. Call Ceridian and they will walk you through the steps if necessary.
· Once they receive the form it takes a few days for them to process it
· Then they send a letter to the various insurance carriers
· Then the carriers re-instate you. This whole process can easily take a month. During this process you don’t want to have to get medical services because it is a pain. Medco, for example, will NOT fill a 90 day prescription. You have to go for 30 days from the local pharmacy and then worry about re-imbursement later.
6. Individual policies are issued to you and your spouse. In the event that one of you dies, the other policy will continue uninterrupted.
7. Raytheon group medical is available until you reach (65); then Medicare kicks in. At that time you can purchase additional medical policy from Raytheon to subsidize your Medicare ($182/Mo).
8. In the event you are laid off, you can qualify for subsidized medical (60).
9. The Personalized Medical Retirement Worksheet is in the retirement package. The worksheet is the form that you fill out to select your medical coverage and is sent with the Raytheon Retirement Guide.
10. If you retire before making your medical selections.
a. Your medical will continue and will be billed retroactive from the day you retire.
b. You will not lose the medical option because as long as you have made no decision, the option will remain available to you until you do.
1. Upon retiring, you will get a $2K paid-up whole life policy from Raytheon. If you have been buying additional insurance for at least 10 years before you retire, you will get an additional $5K of paid-up insurance for each $50K of additional insurance that you have purchased for the 10 years.
2. The Raytheon Benefit Center is at 800-358-1231, Monday through Friday, 8 to 8.
3. You will also get insurance conversion information for converting over your current Raytheon Insurance.
4. Check on the premiums as they may be outrageous however, they might be worth looking into. If they waiver any pre-existing medical condition.
1. First the Raytheon 401K does not allow you to withdraw from your 401K. You have to either leave the money in the Fidelity account or move it to an IRA.
2. There are several types of IRAs that Fidelity offers; you need to check that out.
3. Fidelity is HOT to have you switch over to any IRA. I suspect that they can make more money administering the IRA than the 401K. All the more reason not to do anything with your investments, until you have done your homework. The IRA also allows you the same tax deferred status on your earnings as does the 401K.
4. As long as you invest in Fidelity funds and you have over ($200K), you won’t pay any fee. However, if you decide to venture into the outside world, it may cost you. You need to check that out also.
5. Fidelity says that they charge discount brokerage rates on some funds. You need to check out what that means.
6. Fidelity also has a no charge service where they will provide you with an investment plan based on your requirements. You have to tell them what your financial goals are and what risk level you are willing to assume.
7. Fidelity will try and push to manage your IRA. Fidelity charges you 1% of the fund value/year (That can be a chunk of change for continuing to do what you have already done over the years), and they assume no risk. If you lose they collect their fee and if you win they collect their fee. However, they claim to make it very attractive to do the managing. You sign no contract, and you can fire them at any time and do it yourself.
8. The day after you retire, you can convert all your Raytheon stock to another fund.
9. If you move your money to a non-Fidelity IRA, be sure that you have the other IRA set up and that Fidelity cuts the checks to that IRA so they do not take out the taxes. Fidelity will send you two checks. The larger check is for your pre-tax contribution, the Raytheon company match and any gains you made on your investments. This money is all pre-tax and will be taxed as you take it out. The second check is for any post-tax money that you put into your 401K. Since this money has been taxed, you do not have to put into your IRA. Make sure you discuss this with your tax advisor.
10. Don’t close out your 401K plan the day you retire. The checks you get for your last pay check and any vacation time you have will have 401K contributions taken out. This will shield that money from taxes unless you have already maxed out on your 401K contribution.
1. WARNING if you have a United Way monthly/weekly deduction taken out of your pay, and you leave in the middle of the year, the company will deduct the full amount of your pledge from your final check. It would smart for you to discontinue your deduction long before you plan to retire. Neither the Raytheon Payroll Company nor EZPay, the company that manages the contributions nor HR could confirm this as of July 2007. The safest bet is to call EZ pay at 888-374-6282 or email them at Raytheon@EZMatch.com to cancel your donations. This should be done at least two pay periods before you retire.
2. Bond deductions work differently. Whatever is remaining after your last paycheck, is sent to you
3. You can make out with your HCRA account if you can collect more than you paid in when you retire. They do not come after you for the difference; the money comes from the extra they take from those who deduct too much.
4. While an employee the Raytheon matching gift program to universities is available. This ends when you are no longer an employee. It might make sense to make a larger than normal gift that last year to get the match, and then not donate for the next few years.
It’s true, you do get a rocking chair (or optionally one that does not rock) after (35) years of service. You have (2) choices, either a Boston Rocker or a Liberty Armchair. They come with a “Brass Plate” with your name and a Raytheon Logo attached. You can choose not to get the brass plate but it isn’t obvious how to do so. Just mark the form clearly.
When talking to the Benefit Center they say that OC Tanner handles the chair. When calling OC Tanner at 800-693-1337 they say that they only handle Anniversary Gifts not Rocking chairs, and that I had to call Raytheon HR. After considerable research I found that they were made by Standard Chair of Gardner. 978-632-1301. I called them and learned that this is the only size chair that they make and they do not sell cushions. They recommend that folks go to department stores.
The rocking chair is terrible. (1) it is small and thus is tight to sit in it. (2) The back is straight and doesn’t conform to a person’s back. (3) It has no cushions. (4) Because of the unusual and small size of the chair, it is difficult to purchase cushions.
PERFORMANCE SHARING PLAN
1. To be eligible for performance sharing, you must be an active employee for the 1st (6) months of the year that you plan to retire. If you are interested in Performance Sharing, then you should stay beyond July 1st of the year you intend to retire. I have been told that June 30th will suffice, but am not comfortable with that and so would suggest you leave on July 31st
2. Remember, you are not guaranteed that you will get any money from performance sharing. You may stay until July 1st only to find out later that you are getting nothing.
3. RBI is similar to Performance Sharing. If you are here after the end of June, you are eligible for a pro-rated amount. In order to be eligible you have to have completed and approved your Performance Screen and then complete the right side of the performance screen before you turn in your computer.
SHORT TERM DISABILITY
This is the new policy:
1. In the event that you are sick enough to qualify for Short Term Disability you are no longer employed by Raytheon. You are temporarily off the Raytheon payroll and paid by Metropolitan.
2. Because you are paid Metropolitan, you are no longer eligible for any company 401 contribution, nor can you contribute you share to your 401K.
3. Any deductions that currently are taken from your paycheck, (Mortgage, Car Insurance, Life Insurance) are not deducted from Short Term Disability pay and it becomes your responsibility to make the payments.
4. This document originally said “While Metropolitan is paying you, you are no longer getting a salary credit toward your retirement. You get a time credit, but no salary credit. So, if you happen to go out on STD within the (60) month period that they use to calculate your retirement numbers you loose on your retirement numbers. One week on STD, cancels out one week of additional improvement that you would have got on your retirement numbers by selling back one week of vacation. If you stay on STD too long, or repeat your stays on STD it will lower your pension numbers.” This is NOT true and you can validate this by looking carefully at the monthly records in the retirement package.
1. If you have a company telephone or blackberry and you want to keep the same number for personal use, this is possible. You have to contact Linda Williams (Wireless Asset Management Dept) in Andover the month before you leave and you can transfer the number over to a personal account from the Raytheon business account. This may be outsourced to CSC in which case you would have to go through the Help Desk.
2. You have to make the transfer of accounts within the same service provider, e.g. Cingular. You will have to negotiate with Cingular for the plan that you want.
3. You can not keep the telephone hardware.
You no longer receive a “Verification of Retirement Form” in your Raytheon Retirement Guideline booklet. You now have to notify your supervisor (however you feel best - in person, e-mail, letter, etc) one month prior to your retirement date. He then notifies HR, who in turn will (as it is very dependent on the individual that you are working with in HR) start the ball rolling for payroll. Your supervisor is supposed to provide you with the latest Checkout form, but it seems no one really knows which is the latest form. Go to http://docushare1.app.ray.com/dscgi/ds.py/View/Collection-38297 to get the latest form. There is a long list, but I found the correct one at or near the top of the list shown.
Check with both the library and document control a month or so before you retire to find out if there are any old books or documents that they may believe that you have. Neither are on the Check-out list.
Checkout isn’t too difficult; figure 1-2 hours. You will need your cell phone, pager, credit cards, etc. to turn them during check out. You will also need the ID Tag numbers (L7xxxxxx) from each item of computer equipment so that IS can log you out. They will impound your computer, so do not check out too soon before you actually want to leave. Upload all of your hard drive to a server for others to retrieve if necessary. Otherwise it will all be lost!! You might also want to download your Lotus Notes phone list and your cell phone call list to take home and transfer relevant work files to your successor. Notes meeting notices are deleted!
This whole retirement process is pretty much open loop. You get zero feedback unless you call and ask questions and no one seems to know who to go to. After visiting Security get a Temporary badge to go back to HR for the final step.
Now is the time to enroll in the Association of Raytheon Retirees. We try to keep you informed of your hard earned retirement benefits as well as the ongoing activity of some of your fellow employees.
www.raytheonretirees.org (web page)
336 Baker Ave.
Concord, MA 01742
Dues: $15 annually
· You still require the Medicare Supplement which pays for the costs after Medicare stops paying. There are a number of plans that Raytheon offers and the spreadsheet at the end of this document shows a comparison as of June 2009. Raytheon offers three:
· You will have to find a dental plan. The standard plans are open to Raytheon retirees (and spouses). Once COBRA runs out you may find that any of the dental plans are cost-prohibitive
· Some Medicare Supplements cover the medications, but not all do. If necessary find a Medicare D. The Social Security web page allows you to list your medications are determine the costs for the various plans. Although their web page is greatly improved from what I am told it was a few years ago it is difficult to wend your way through it. For Massachusetts there are (2009) forty-seven (47) plans!!! Some have gap coverage, others do not. Cost is very sensitive to the specific medications you are on. However, beware of tying to current medications as things will change. Some medications are not covered onder Plan D. Insulin Pump and test strips are under Plan B.
· The best way to get smart is to pick a major provider, like AARP, and call up to speak to a service representative. Have all your prescriptions/dosages handy. Have them:
ü Normally you choose a Plan D during the 11/15 – 12/31 period. Depending on your retirement date you may be off-cycle. If so, you go directly to the provider who tells SS. Otherwise you deal through SS.
ü Contrast their various plans. AARP, for example, has three, at ~$80, $40 and $25/month. Most plans do not cover through the gap which starts at about $2750 (based on what the insurance real cost is). For pland that do cover through the gap, like the more expensive AARP plan, only Tier I is covered. This savings may be deceptive if your medications are expensive enough as even with the tier 1 you may still have to pay for the full donut hole.
ü It is significantly less expensive to utilize the three-month mail-in process. Many Tier I drugs are “free”. Note that what is in Tier I differs from plan to plan.
You might think that you’ll get your retirement checks on the 25th of the month, after you have “earned” them. Not true.
GOOD LUCK and STAY HEALTHY
This article expands previously provided information regarding free on-line courses and other educational material, and free on-line books/articles. There is also a lot of good video available and I’ll just provide the PBS info in this article.
1. Courses and lectures
In my last article I referenced some free college courses that I have personally looked into. I subsequently went to the web to see what else I could find. There was a lot!!
1a. Education Portal
The Education Portal has received a lot of publicity and is worth reviewing. http://education-portal.com/articles/Universities_with_the_Best_Free_Online_Courses.html
However, there is considerable variation in quality. It is worth noting that there is a considerable difference between having class notes and actually watching the course itself. There is quite a mixture in the data below and before you get too excited by the quantity of courses you should review the site. This is their view of Universities with the Best Free Online Courses.·
More than 1,800 “course” are offered through the school's OpenCourseWare project, supposedly all the courses at the Institute. Courses are in some combination of text, audio and video formats. The link above goes to the area specifically for courses (about 200) “with a high degree of video”. I tried a few and it is a lot of work to get through the information.
· 1a2 Open University Courses Online http://www.open.ac.uk/openlearn/home.php
The Open University is the UK's largest academic institution with about 600 courses, many of which are not free. However, the url above goes to a sub-area in their website that contains free material. Clicking on “browse topics” appears to get you to text versions of the various courses
CMU offers a small number (about a dozen) of free online courses and materials through a program called Open Learning Initiative.
Courses are sorted by school (i.e., School of Arts and Sciences, School of Medicine, etc.) and include assignments, lecture notes and other supplementary materials. But, for example, Arts & Science had only 15 courses and the material within them is pretty sketchy.
1a5 Stanford Courses on iTunes U http://itunes.stanford.edu/
Stanford University has joined forces with iTunes U in providing access to 37 Stanford courses, plus misc other material. Using iTunes these courses can be downloaded and played on iPods, PCs, and Macs and can also be burned to CDs. If you don't have iTunes, you can download it for free. When I looked up astrobiology I found 18 lectures, each 1 hour or more. Downloading was very slow and I had a lot of trouble with the video.
1a6 UC Berkeley http://berkeley.edu/multimedia/index.php#courses
Hundreds of UC Berkeley courses, both current and archived, are now available as podcasts and webcasts. Courses cover a range of subjects, including astronomy, biology, chemistry, computer programming, engineering, psychology, legal studies and philosophy. Most are on YouTube or iTunes U. Quality seems to be pretty good.·
1a7 Utah State University http://ocw.usu.edu/
Study options include everything from anthropology to physics and theatre arts. These comprehensive text-based courses can be downloaded as zip files or viewed directly on the site. But there isn’t much material. Electrical Engineering, for example, has only seven courses. When I opened one of the courses I got a WinZIP folder with hundreds of files, mostly pictures, with no explanation of how to pull them together into a course.
1a8 Kutztown University's of Pennsylvania http://kutztownsbdc.org/course_listing.asp
Kutztown University's Small Business Development Center offers 90 free business courses on the web topics include accounting, finance, government, business law, marketing and sales. Comprehensive text, interactive case studies, slides, graphics and streaming audio are avaailable. To utilize the material you must become a member, but that is free at their home page. When I spoke with them I learned that each state in the union has something like this site, but there is no standardization. Use www.asbdc-us.org to browse what is available.
1a9 University of Southern Queensland http://ocw.usq.edu.au/
Ten courses are offered including Introduction to Tourism, which I went through. All is available as both text and audio, of course with an Australian accent. They state that this is an “initial” offering so maybe more is coming..
1a10 University of California, Irvine http://ocw.uci.edu/
The first thing I noticed on their www.uci.edu homepage is that they show the temperature and have a surf report for Newport Beach. The currently have about 50 courses. I particularly liked Physics 21:Science from Superheroes to Global Warming which addresses, for example, could Superman fly?
1a11 Yale University (http://oyc.yale.edu/courselist)
There are a number of ways of acquiring the video on the 25 courses that they make available but by far the best is to use YouTube although their web-page just lists the various download options. However, for example, when I searched for Yale, course, astronomy I found alll the lectures and they downloaded quickly with decent quality.
1b Downloading educational media from iTunes University
iTunes U is a part of the iTunes Store featuring free lectures, language lessons, audio books, and more, which you can download on your iPod, iPhone, or computer. iTunes U is available to everyone at no cost. I had never heard of iTunes U despite having used iTunes for 3 years. iTunes says that it can be used on MP3 players though I haven’t done it.
iTunes U has more than 100,000 educational audio and video files from top universities, famous museums, public media organizations, and other cultural institutions from around the world.
First, download iTunes. To access iTunes U in the iTunes Store:
1. In iTunes, click iTunes Store (below Store).
2. Click iTunes U at the top of the iTunes Store window.
To go directly to a specific subject, click the arrow to the right of iTunes U and choose a subject from the menu.
To search iTunes U:
1. Type your search terms in the Search iTunes Store text field, and then press Enter.
2. To limit your search to items in iTunes U, choose iTunes U from the pop-up menu next to Power Search.
Your search results appear below.
3. If there are too many results to list on a single page, click More Results to see additional pages.
To play items downloaded from iTunes U:
1. In iTunes, click iTunes U (below Library).
2. Select an item and then click Play.
1c FEMA Courses http://training.fema.gov/EMIWeb/edu/completeCourses.asp
FEMA offers a series of free courses so, for example, you could learn about Floodplain Management. Over the years the government has contracted a large amount of courseware, much of which is available and the quality is pretty good.
2. Free Books that can be downloaded.
There is enormous variation in quality of the material depending on how the books were entered into the system. Some apparently were scanned and then converted to text with poor resultant quality
This site currently has 242,000 free ebooks from 92,000 authors. A lot of the material is old as it has passed the copyright protection period and all is in the public domain. I found it frustrating to skim the material as there is so much. It is sorted alphabetically and you can search by title or author. Like Amazon, if you search on an author they list other authors you might want, though their algorithm is peculiar; based on what the downloader also looked for. When I searched for Agatha Christie (there were two entries) I also got Conan Doyle (which is reasonable) but also Freud and Shakespeare! You seem to be able to download as .txt or PDF (at least on the titles I looked at).
2a Project Guttenberg http://www.gutenberg.org/catalog/
This site includes “books previously published on paper by bona fide publishers and digitized by them with the help of thousands of volunteers.” All of Guttenberg’s ebooks can be easily downloaded in a variety of ways: Choose between ePub, Mobipocket, HTML and simple text formats. No fee or registration is required. I was surprised at the large number of audio books that are available, including a large number that are computer-generated. They are looking for proof-readers willing to do as little as 1 page/day, a worthy retirement assignment.
There are also partners and affiliates to Project Guttenberg with another 100,000 titles (http://www.gutenberg.org/wiki/Gutenberg:Partners%2C_Affiliates_and_Resources) I have no idea how the contents of these three sites overlap.
3 Public Broadcasting Video http://video.pbs.org/
The Public Broadcasting System (PBS) has made a fairly large collection of its videos available free. For example, there are 46 recordings of the Julia Child cooking show. But there are far more than that which are not available. I was looking for I, Claudius and couldn’t find it. But they do have 122 History videos available!! However, when I went to the Minuteman Library system I found an 11-hour video disk of the TV show and also a reading from the original book by Robert Graves. So, once again, perseverance pays off.
In order to better calibrate the quality of these college courses I'd appreciate any useful feedback from those who take (or try to take) the courses. Send information to firstname.lastname@example.org
Everyone I talked to had said “when you retire you won’t know how you found time to do stuff when you were working” and yet there is a difference in being “busy” and making your time personally productive. I started off about a year before retirement and want to share what I did, how it worked, and how others can benefit from what I did.
I quickly realized that I wanted to do a variety of things upon retirement and so set up a notebook to collect ideas. Here was what I did, and of course everyone will have different lists but many of the categories will be the same. And in addition to all this I’m actually sleeping later and my blood pressure has dropped.
- 6 session course on the Civil War at the Bedford Library
- Jack Beatty at the Winchester Library discussed his 1992 book The Rascal King about James Michael Curly, the corrupt mayor of Boston during the ‘40s and ‘50s.
- Larry Tye, at the Lexington Historical Society, discussing his new best seller about Satchel Paige, which I’m still in the process of reading.
The home page for the Yale courses is http://oyc.yale.edu/, where you can see what each course is, who the professor is, etc. Then you can search for it on YouTube. The course list is at http://oyc.yale.edu/courselist
· Barry Hass learned, through NPR, of Khan Academy. They have an interesting site with approximately 1100 short videos (about 20 minutes each) mostly of math and science, but also a big chunk on Economics and Finance. See http://www.khanacademy.org/faq.jsp. I haven’t had a chance to look at more than one but this proves, in case anyone ever doubted it, that there is a lot out there for free.
· Osher LifeLong Learning is something I have not yet taken advantage of but in the Boston area they work with UMass (http://www.lets.umb.edu/ ), Tufts (www.ase.tufts.edu/lli) and Brandeis (http://www.brandeis.edu/bolli/) to provide reasonably-priced courses. Osher provided funds to many universities across the country so just search on “Osher” for your area.
· Luckily I’m not the only one who searches for interesting things to do. Barry Hass told me about a program at The Boston Playwright’s Theater at Boston University (http://web.bu.edu/bpt/about/index.html ). Each fall they receive about 500 10-minute plays, make 3 copies of each, and parcel them out in packets of 10 to anyone who wants to review them. Through a multi-step judging process 50 are chosen for production in a 10-12 hour day in late May. Three of the 10 were pretty good and unfortunately I’ll miss the 5/26 free production because I’ll be on a safari.
· Kim Komando, who styles herself as The Digital Goddess, has a web site with daily computer advice, videos, etc. Much of the material is free and can be subscribed to. There is also a subscriber service if one wants to contact her team directly. The free videos are worth the price of admission and I have a list of my favorite dozen over the last year. See http://www.komando.com/newsletters/ to view her material and to sign up.
· I’ve discovered that there are coupons for everything! Including most restaurants you go to. Just takes a bit of searching.
· Start asking for Senior Discounts on everything. Lots of places (Dunkin Donut, my cleaners, movie theaters, …) have them but don’t advertise the fact.
· For years we have wanted to do a safari. We finally have the time. After an enormous amount of help from Barry Hantman, a Raytheon employee who has taken 6 safaris, we settled on going to Tanzania. It is a private safari at an amazingly low cost through a firm from Kenya. Everything has been done through email.
· For a lot of good travel ideas see the book 1,000 Places To See Before You Die by Patricia Schultz. I have no idea what the list price is as almost everything can be purchased through Amazon or AbeBooks.
· The National Parks has a $10 LIFETIME Entrance Pass that allows the holder and up to three others to get into the National Parks. See http://usparks.about.com/cs/parkpasses/ht/howtopasssenior.htm for the instructions on obtaining this pass if you are over 62.
Beware of COBRA Fine Print by John Rudy (Added 12/22/09)
When I was getting ready to retire I was told to expect surprises. One came my way just recently that is worth sharing with the community.
The Background: At the time of retirement Jan and I both took out COBRA to continue our United Healthcare coverage for up to 18 months. I did this even though I knew that three months later Jan would go onto Medicare and that we would drop that portion of our COBRA. All seemed to go well and in October Jan went onto Medicare and we started saving money.
The Surprise: In November I went to the doctor for a check-up, had the normal set of blood work and then went onto the MEDCO website to order the next three months of medication. The costs were huge, as if I were back in January.
What happened? I made about 6 hours of calls to the Pension group, Medco, United Healthcare, Ceridian and Raytheon's Human Resources. Everyone said, "this doesn't make sense but I can't fix it". Finally I got to the Resolution group at United Healthcare and they said they'd have it fixed in 48 hours.
Wrong: After a bunch more phone calls to United Healthcare and Raytheon Human Resources I learned that when a spouse leaves the medical plan it reverts from a "family" plan to an "individual" plan and that the deductible must be entirely met by the remaining member even though as a family we had met the deductible 6 months earlier. Senior Human Resources management were helpful but that decision stands.
The Lesson Learned: So the moral is that if you are going onto COBRA and one spouse will be getting off it before the other, check the fine print to see what the impact is. It might not be what you anticipate.
The materials on annual enrollment for 2010 have arrived in the mail. Quite a few members have reacted with dismay to the significant increase in premiums for some of the plans offered. And of course, a continuing deficiency in the annual enrollment process is the failure to provide a notice containing all of the plan options available to retiree groups. If you are not aware, the notification only provides information on the plan in which you were enrolled in the prior year. For example, a few members enrolled only in a dental plan in 2009. As a result, they only received information regarding the dental plan for 2010 even though they continue to be eligible to join one of the medical plans offered. The way it works is that you have to contact the Raytheon Benefit Center and request information on the other plans available to you. The enrollment period ends on November 20th so there is little time to react and it is unlikely that the materials will reach you before that date. You should be able to review the options on the phone and make a change if appropriate and you may want to do that because of the increase in premiums first noted. (The Benefit Center number is 800-358-1231)
As to the premiums, the Plus plan premium stays the same as last year which is somewhere between $51 and $59 a month. The premium apparently varies slightly from locality to locality or from one retiree to the next—not altogether clear why. In any case, the Plus plan premium is clearly much less than the premiums for the other plans made available. Except for the Plus plan, the premiums have skyrocketed compared to 2009. We understand that premiums for other medigap plans have also increased substantially over last year, but increases for Advantage plans seem to be the most pronounced. One Massachusetts member was enrolled in a Blue Cross HMO Advantage plan (not the Raytheon one) and the premium went from $119 to $179 along with increased deductibles and co-pays. By the way, the Raytheon sponsored medigap plans may have higher premiums than other medigap plans of the same insurer and the plans may be very similar. So, it is a good idea to compare the Raytheon sponsored plan with other medigap plans issued by the same insurer on the open market.
The cover letter on the annual enrollment material does note the premium increase in the Advantage plans offered and attributed the increase to a number of factors, including a decrease in Medicare reimbursements to the insurers.
Whatever the reason, premium costs are way up and the math strongly suggests taking another look at the Plus plan for those having opted to enroll in one of the other Raytheon sponsored plans or an open market plan. With the Plus plan at $50-$60 and a no donut hole coverage prescription drug plan with a premium somewhere around $35-$45, the annual premium cost would be less than $1,200. Keep in mind that the Plus plan provides some prescription drug coverage in the donut hole so a supplemental D plan need not have as many bells and whistles. The Plus plan has an out-of-pocket maximum (exclusive of prescription drug costs) of $1,750 ($145 monthly). The rough math suggests a worse case cost for the Plus plan together with a prescription drug plan of about $245 a month. There is no one size fits all in comparing costs and benefits in these health plans but given the premium increase in so many of the other plans available, the Plus plan may merit a visit. Time is short so act quickly.
President Obama and Dr. John Holdren, Director of the White House Office of Science and Technology Policy, hosted the winners of the 2009 Raytheon MATHCOUNTS National Competition in the Oval Office last week. The honorary guests included MATHCOUNTS National Individual Champion Bobby Shen, the national championship team from Texas and the second place team from Missouri.
Praise From the President
President Obama praised the finalists for their outstanding achievements and commitment to academic excellence and recognized the volunteer coaches for their invaluable service to the MATHCOUNTS program. He also encouraged the students to continue to develop their special abilities in mathematics for both themselves and the good of the nation.
"Our MATHCOUNTS coaches and volunteers are committed to putting fun and excitement into the math learning experience and making it as challenging and competitive as any school sport,” said Lou DiGioia, MATHCOUNTS executive director. “We know the president is a big proponent of mathematics literacy, and we're honored by his administration's support."
Wickham: Math Can You Take You Anywhere
Pam Wickham, Raytheon vice president of Corporate Affairs and Communications and vice chair of the board of directors of MATHCOUNTS, was also in attendance.
“This visit to the White House is not only a tremendous honor but proof that success in math can take you anywhere, even to meet the President!,” said Wickham. ”MATHCOUNTS and programs such as Raytheon’s MathMovesU are constantly developing fun and innovative ways to encourage our nation’s students to pursue their passion for math.”
The 2009 Raytheon MATHCOUNTS National Competition took place May 8, 2009 at Walt Disney World’s Swan and Dolphin Resort in Lake Buena Vista, Fla. Raytheon Company will serve as the title sponsor of the competition through 2011.
Raytheon’s support of MATHCOUNTS is a component of its MathMovesU program, an initiative designed to engage U.S. middle school students in math and science through interactive learning programs, contests, events, scholarships, tutoring programs and more. Since its inception in 2005, MathMovesU has touched the lives of more than 900,000 students, teachers and parents.
By Anna Wilde Mathews; The Wall Street Journal ~ Jul 29, 2009
As Congress struggles to move forward with an overhaul of health care, people are focusing on what it might mean to them. Many are concerned and confused, judging by the flood of reader questions I got after last week’s Healthy Consumer column on the possible consumer impact. For an overview of the bills in Congress, you can take a look at that earlier column, as well as a helpful Q&A by Journal reporter Janet Adamy.
Here’s a first batch of your queries, and some answers. As the debate moves forward, Healthy Consumer will keep addressing the questions you send to email@example.com.
How will the health-overhaul bills would affect my current coverage? What will the new requirement for everyone to carry health insurance mean?
For one thing, your existing health plan will likely be grandfathered in. If you change plans, your new coverage will have to meet various minimum requirements set by the bills. One reader asked if he could keep his current plan, which excludes certain care related to some preexisting health conditions. The answer is probably yes, but he might want to look at switching because the bills would force insurers to sell him a plan that would cover those conditions and wouldn’t be priced based on his health status.
A.R., in Pahrump, Nev., wondered who was exempt from the individual mandate. Other readers asked what happens if they can’t afford the health plans and don’t qualify for subsidies. In the House bill, people could apply for waivers in cases of “hardship,” though “we just don’t know what that means,” says Karen Pollitz, a professor at Georgetown. The bill leaves it to regulators to define. Other groups that are exempt include children, “nonresident aliens,” expats and people who obtain religious exemptions.
The Senate health committee bill has more outs. They include an exemption for coverage gaps of as many as 90 days, and an affordability clause that says a consumer can’t be required to buy coverage if she isn’t able to find a plan with premiums that add up to less than 12.5% of her income.
How will the health-overhaul bills impact retiree benefits from former employers?
The broad answer is that these folks will be affected just like anyone else – they will be required to have health coverage that meets certain minimum requirements, whether from a former employer or some other source. The House bill actually has a provision that could temporarily help defray the cost of retiree coverage, with reinsurance for certain expensive claims. The Senate health committee bill has a similar provision.
However, David Certner, legislative policy director for AARP, warns that any change in the law may give some employers a pretext to back away from retiree coverage, even if it doesn’t really affect them. “It could be an excuse,” he says.
When will the health overhaul’s provisions go into effect?
That depends on when – and whether – a final bill passes, and the timing of that is increasingly unclear. It now looks like both the House and Senate will vote on bills after Congress’ August recess.
If President Obama does sign a bill this year, its effects are likely to phase in over time. The biggest provisions of the House bill and the version passed by the Senate’s health committee both kick in in 2013. Those provisions include the requirement that insurance companies issue policies to anyone who applies, regardless of preexisting health conditions, and the new mandates for the minimal benefits every insurance plan must include. The health-policy analysis firm Avalere Health has put together this table of implementation dates.
Where are copies of bills and other relevant information?
The latest versions may not always be online, but here are some places to start.
For side-by-side summaries, you can try the Kaiser Family Foundation.
The House bill, developed by three major committees and since passed by two of them, can be found on the Web site for the House Energy and Commerce Committee. That’s the panel that hasn’t yet passed it.
The Senate Health, Education, Labor and Pensions Committee has passed a bill, which is on posted on the committee’s Web site.
The Senate Finance Committee hasn’t yet passed a bill, but the chairman did post a white paper with various policy options.
How will the overhaul affect Medicare?
The short answer is: too soon to tell, because the Senate Finance Committee has yet to release a final bill. President Obama addressed some issues related to Medicare in an event with AARP members (here’s the transcript).
Broadly, there are likely to be trims to the reimbursement paid to hospitals, nursing homes and other health-care providers. Major cuts are also extremely likely to the private plans sold under the Medicare Advantage name.
On the upside for Medicare beneficiaries, there are likely to be some new goodies. For instance, the drug industry has promised them a 50% discount on the cost of brand-name drugs during the non-covered “donut hole” in Part D benefits. And the House bill actually phases out the donut hole altogether, though it will take until 2023 for it to completely vanish. Coverage of preventive services is also likely to be boosted. But I’ll wait to address this more fully when we know what the Senate Finance bill looks like.
Write to Anna Wilde Mathews at firstname.lastname@example.org
Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved
Very helpful -
Attorney's Advice - NO CHARGE
To Roth or Not By Joe DEAmbrose
In preparing a client’s tax return recently, I was confronted with the dreaded question of whether to “Roth or not”. If “Roth” strikes a chord, read on—otherwise skip over to the obituaries. As someone interested, and even skilled in, taxation as I was wont to tell my boss in performance reviews, the Roth question has always started this mind dancing but for a band that never stops playing. But here it was—the client had made a contribution to a Roth IRA in 2007 and my basic tax knowledge recognized that there was still time to change or reconvert the contribution to a contribution to a traditional IRA. There is a fundamental difference on the tax return; a taxpayer gets no deduction for a contribution made to a Roth IRA but does get a deduction for a contribution to a traditional IRA and the IRS rules allow a taxpayer to choose between the two type of IRA’s before the tax return is filed.
Should I just go along with the taxpayer’s choice or actually try to analyze the alternatives and make a suggestion, maybe even a recommendation to make the change before April 15th. In the past, every time I have thought about the choice between a Roth and a Traditional IRA, I have frozen—I just could not get a grasp on the comparison, maybe to many moving parts or maybe just being tired. I had read many articles and pieces on the subject and it seemed to me that the Roth was the avenue recommended more often than not but the rationale offered always seemed to “iffy”, But here it was—it could not be ignored.
The contribution to the Roth IRA was $5000, the maximum amount allowed for the client. The client was not “Raytheon” but had a profile which probably matched many Raytheon retirees; retired, age 63 with a modest pension, and some “earned” income from part-time employment. He was not a participant in a retirement plan, as the part time employment did not provide retirement benefits, and receiving a pension does not count as participation. If he had been a participant, he would only be able to make an IRA contribution if his income was below a certain level—that restriction did not become a problem. The employment income was key; an IRA contribution can only be made to the extent of the lesser of earned income or $5,000. All the stars were aligned—a $5000 contribution could be made to an IRA, either to a traditional IRA or to a Roth IRA, and it could be made on either a deductible or a non-deductible basis.
The main distinction between a Roth and a Traditional IRA, aside from the deduction, is that distributions from the Roth are not subject to tax after a brief initial period while distributions from a Traditional will always be subject to tax a some point, either by the owner or the owner’s beneficiaries. One part of the comparison then is that while a tax deduction occurs when funds are contributed to an IRA, a distribution will cause taxable income, in short, the deduction will be reversed. If the owner’s tax rate at the date of contribution is the same as the tax rate at the time of distribution, the deduction and income will offset each other.
If the client takes a deduction for the contribution, at his 25% tax rate, he will have an additional $1,250 in his pocket compared to making a contribution to a Roth. When the $5,000 is distributed, the $1,250 will be paid back. A bird in hand impulse would be to take the deduction and have $5,000 in an IRA and $1,250 in a bank account rather than having just the $5,000 in the Roth. On the other hand, the $5000 would be subject to tax at some point in the Traditional but would not be in the Roth. Did the $1,250 initial advantage compensate for the disadvantage on distribution?
How to analyze? It seemed as though an algerbraic approach might be helpful, putting the Roth on one side of an equal sign and the traditional on the other and making most assumptions equal such as tax rates, investment return, and the date of distribution. As I recalled from my high school algebra, the similar factors would cancel out leaving only the dissimilar factors which would present the nub of the difference. The 5th grader in the house refused to be interested so a spreadsheet was the only recourse.
After a few hours at the helm of an Excel worksheet, it became apparent that my initial trepidation was well warranted; there was no clear answer or at least no clear and comforting answer. The clear answer was that on an objective, all things being equal (investment return, tax rate at contribution, tax rate at distribution), the Roth produced more after-tax benefit than the Traditional when the process was finally, finally over. When would it be finally over—when the investment was withdrawn from the IRA account and dissipated in some way, perhaps on a trip to Las Vegas, or given the owner’s more likely circumstance, to Lourdes. Strangely, the Traditional took the lead at the outset and held it for a long time based on a comparison of account balances from year to year. That was because my client picked up a tax savings of $1,250 on a deductible contribution of $5,000, money I assumed would be pocketed and invested in another, albeit taxable account. The tax savings had to be paid back however, and began to be paid back when distributions had to be made from the Traditional beginning in the year after the year my client would reach age 70 ½. But, the required distributions could be spread out and the payback was slow; the Roth only pulled ahead when the client reached age 85. ( I also assumed that my client took the after-tax distribution amounts and placed them in another after-tax investment account awaiting the dissipation date). The problem with the Traditional was that the initial tax deduction and the tax on the investment income would have to be paid at some point in time so there was an annoying liability hanging over the Traditional account that was not hanging over the Roth account. In order to commit an act of dissipation, my client would incur a toll charge on the funds in a Traditional account. But if the dissipation took place earlier rather than later, the Roth still won (would always win) but by a smaller margin. Here I insert a box to summarize (dissipation becomes liquidation).
The best I could come up with is that the decision to deduct or not deduct was a relatively close call with the Roth having a sight numerical advantage at the outset and an increasing advantage over time; on a pure numbers, all things being equal basis, the Roth had an advantage which grew over time. The Traditional balances stayed ahead of the Roth balances for a period beyond the horizon but fell behind as soon as a full distribution was made—and sooner or later a full distribution would have to be made. A different tax rate at distribution compared to the date of contribution would change the outcome but the time period for measurement seemed too long to make a prediction in that area. The math said Roth. Why was I still uneasy? I could not get past a resistance to paying a tax today that I did not have to pay until tomorrow even if paying it today seemed to be the right thing to do.
Well, it was time to act. I called my client and said ………..
Top Of Form
Raytheon retirees may well be concerned with the impact of the current financial turmoil on their pensions—a few have raised their concerns with the ARR. The ARR does not have specific information but it is very likely that the value of the assets set aside to provide pension benefits has taken a hit and the size of the damage to asset values is likely to be substantial as the carnage in the financial markets is broad and deep as we all know too well. As a result, retirees are certainly less secure than they were just a few short months ago when Raytheon’s pension plans were well funded and benefiting from what were really superior investment returns. Nonetheless, there should be no immediate problem with pension payments—the checks will keep on coming.
Pension payments from defined benefit plans such as the Raytheon Salaried, Hourly, and the plans for the former Hughes, E-Systems and other such employee groups are not directly affected by a decline in asset values. The promised payments must still be made and it would be expected that each of the plans has sufficient liquidity despite the downturn to make required payments for the foreseeable future. So, your pension payments are relatively safe. The right to a pension is a sight better than a stock market investment or even a bank account at the moment. Pension plans are required to be funded, that is, money has to be set aside to pay the pensions and the Raytheon plans were reasonably well funded by most accounts.
The employer is the one that will suffer the greatest from a precipitous decline in the value of the assets funding pension payments. The employer has to make up the shortfall with additional contributions or, we should all hope, with a reversal of the decline in values. To be sure there is risk for us retirees. An employer could try to terminate its pension plan or plans leaving the depleted plan assets to the plan beneficiaries but there are disincentives to a functioning business trying this approach. Another way fo an employer to reduce its obligation is to cut back on the pension plan benefits. Raytheon has already reduced its obligations by cutting new employees out of some defined benefit pension plans but retiree benefits are vested and unlikely to be affected by such cutbacks. The main risk is that an employer goes bankrupt and is unable to handle its pension funding obligations. In such a case, the plan assets are turned over to a government creature called the Pension Benefit Guarantee Corporation (PBGC) which would split up the assets among all of the plan beneficiaries, active and retired, and make payments as they become due, but in much reduced amounts from the actual plan benefit. There have been many employers that have come to this end leaving many unhappy employees; the once proud Polaroid Corporation comes to mind. So, the bad news is that there is some risk but the good news is that there are layers of happenstance and, ultimately, a government sponsored safety net for pensioners—as long as the government can handle all the safety nets it is sponsoring.
Be aware of the difference between defined benefit pension plans as described above and another type of pension plan called a defined contribution plan. A 401K plan is a defined contribution plan as are most profit sharing plans. The employer has little responsibility for the ultimate benefit from such plans after it has made its contribution to the plan. In 401K plans, the employee almost always chooses the assets for investment and suffers the good and the bad and it has never been as bad as it is now. The same can be said for IRA’s, many of which hold assets that were rolled over from an employer 401K or profit sharing plan.
So, all in all, Raytheon pension payments are to be cherished. Relative to other assets you may own, your pension payment is safe and secure. You cannot change what it is in any case so relax………
Colucci, Colucci & Marcus, P.C.
552 Adams Street
Milton, MA 02186
Probate is the process by which a deceased person’s property is passed to family, friends, or charities. The entire process takes at least one year. The legal fees paid to the attorney who assists with the probate process can be substantial.
How can you avoid probate?
The most common method of avoiding probate is by establishing a revocable trust (sometimes referred to as a “living” trust). Establishing a revocable trust, however, is only part of the work that is necessary to avoid probate. Once a trust is established, assets must be transferred into the trust during your lifetime to avoid probate.
! What assets need to be transferred into a revocable trust?
Most assets which have a named beneficiary do not have to be probated when a person dies and do not need to be transferred into a revocable trust. These assets include life insurance policies, most retirement funds (IRAs, 401(k)’s, 403(b)’s, etc.), and annuities. Any other assets which are in the decedent’s name alone will have to be probated.
! How are assets transferred into a revocable trust?
Most assets are transferred into a revocable trust by contacting the institution that holds these assets (banks, mutual funds, investment firms, etc.), providing the institution with a copy of the revocable trust, and requesting that the account be changed to a trust account. For bank accounts, this usually means going to the banks and requesting that the accounts be transferred into the trust. For other assets (mutual funds, stock, etc.) it usually means contacting your account representative or the customer service department to request that they forward the forms necessary to make the transfer.
Services offered by Colucci, Colucci & Marcus, P.C. include: representing injured individuals • estate planning • elder law • general negligence resulting in personal injury • automobile accidents • wills and trusts • medical malpractice • probate of estates • guardianships • asset protection.
LIVING WITH YOUR LIVING TRUST
Q. Now that I've signed my living trust, how do I transfer title of my assets to the trust?
A. In order for the living trust to avoid probate, you must re-title your assets from your own name to yourself as trustee for your revocable living trust. The exact mechanics depend on the type of property involved. For real estate, a deed must be prepared. signed and recorded in order for the transfer to be effective. For bank and brokerage accounts. you will usually need to open a new account in the name of yourself as Trustee, and transfer all assets from your individual account to your trustee account.
Q. Exactly how should the assets be re-titled?
A. The preferred language is "John Doe, Trustee under the John Doe Revocable Living Trust dated June 6, 1996." Each brokerage house seems to abbreviate this differently. The U.S. Treasury, for registration of Treasury bonds, requires "the name of the trustee, followed by adequate identification of the authority by which the trust was created." As long as you state the name of the trustee, and the name and date of the agreement, that should be adequate.
Q. Should I transfer all of my assets into the trust now?
A. This depends on how important avoiding probate is to you. Regardless of your age or health, we generally recommend that interests in closely held businesses be held in the living trust. For other assets it is more of a judgment call, depending on your age, health and your concern about the delays and costs of the probate process.
Q. Whose social security number should the trust use?
A. For income tax purposes, the trust is not treated as a separate entity during your lifetime. You are required to report all income, loss, deduction or credit from property titled in the name of the trust on your own personal income tax return. So the trust is "transparent" for income tax purposes. Therefore, while you are trustee for yourself during your lifetime, you should use your social security number as the trust's taxpayer identification. If someone else becomes the trustee, they will obtain a taxpayer identification number for the trust. No separate income tax returns need to be filed for the trust as long as you are trustee of your own trust.
Q. Why do some banks and brokers want to keep a copy of my trust?
A. They are not nosy about your affairs. What they try to do is to protect you and your beneficiaries. The banks like to make a copy of the page of trust that says who will be your successor trustee. When someone shows up at the bank years from now and says he is the successor trustee of your trust, the bank will pull out its records to see if that is the same person that you told them would be in charge of your trust someday. If it is, they release the funds. If is isn't, they can then require solid proof from that person documenting why he is now the successor trustee and entitled to draw on your trust account. In addition to knowing your successor trustee, brokers also want copies of the pages of your trust that say what kinds of investments your trust is authorized to own. For example, if a trust does not authorize the trustee to hold options. the broker will not purchase options in your trust. The point is that the broker will follow the terms of the trust as you write them, not necessarily the orders of the trustee. This protects the trust and insures that your wishes are carried out. If the broker transfers or purchases improper trust assets that are not allowed by your trust, he can be held liable if the trust loses money because of the improper investments.
Q. I told my broker the full name of my trust but when the stock came back, it was registered in an abbreviated manner. I told him to register as "John Doe, Trustee under the John Doe Revocable Living Trust dated June 6, 1996" but it came back as "John Doe TTEE U/A dtd 6/06/96" Is this ok?
A. Yes, each stock transfer agent has its own abbreviations format.
Q. When I change my bank account to the trust's name, will I have to get a new account and a new account number?
A. This depends upon the bank. As more and more people set up living trusts to avoid probate, many banks now realize it is silly to have a whole new account established. Most banks will only make you sign new account cards in the trust's name and make a photocopy of the trust for their records. Each bank sets its own policy.
Q. If I get new checks printed for my trust checking account, must I have the full trust name printed on the checks?
A. No. you can leave off all references to the trust on your checks. What is important is the bank records or signature cards being correct as to who owns the trust. What you ask the bank to print on your checks is entirely up to you. If you have more than one personal account, however, you might need some type of Trustee identifier to keep them straight in your own mind.
Q. Must I sign "trustee" after my name on all checks?
A. No. you must merely sign your own name. If a particular bank requires that you add "trustee" they will tell you.
Q. If I change my certificate of deposit from my name to my trust's name before it is due, will I be charged with any early withdrawal penalty?
A. As long as you're leaving the funds on deposit with the financial institution, there should be no early withdrawal penalty for changing the registration on the C.D. to yourself or trustee of your own revocable trust.
Q. What happens after I complete the initial transfer of my assets to the trust?
A. Life goes on as normal. Nothing in your life really changes while you are your own trustee except that you must remember to have your assets registered in the trust's name. This is really not difficult or cumbersome once you get used to it.
Q. How do I cash or deposit a dividend or interest check payable to me as trustee of my trust?
A. You endorse the check on the bank signing your name and adding after your signature "as trustee U/A [under agreement] dated ____.
Q. What assets should NOT be transferred to my living trust?
A. You cannot change ownership of an I.R.A. or qualified plan assets to your trust's name. You can, however, change the beneficiary of your I.R.A. to your trust by getting a change of beneficiary form. Also, you would not normally want to own life insurance in a living trust. Life insurance is best owned by a separate irrevocable trust, which keeps the proceeds out of your taxable estate.
Q. If I am my own trustee, what happens when I die?
A. Your successor trustee obtains several copies of your death certificate and contacts your bank and broker telling them that he is now in charge of the trust. He proves this by giving each one a certified copy of your death certificate. After your successor trustee gets control of the trust assets, he then pays your bills and distributes the trust in accordance with your instructions spelled out in the trust. He also must keep records and account to your beneficiaries and the I.R.S. (Note: your successor trustee does the same thing if you become incompetent. Instead of a death certificate, he proves his authority to act by having your physician write a letter stating you cannot function as a trustee).
Q. What records should I keep for the trust if I am my own trustee?
A. Since you are both the trustee and beneficiary, you do not have to give an accounting to yourself. However, you should follow a rule of reason. You should keep some central list of the trust assets and the names of your advisors (accountant, attorney, stockbroker, financial planner, insurance advisor, etc.) in a place known to your successor trustee so he or she can find it and begin to take over should you become incompetent or pass away.
Q. Should I give my children a copy of my trust?
A. It depends. If you change your mind in the future, you may regret giving a copy of your trust to your children. What you should do is notify the person who is to be in charge of your affairs should you become ill or pass away. You should also give them a copy of the attorney's card who drafted the estate plan.
Q. Should my successor trustee have a copy of my trust?
A. If your successor trustee is also a beneficiary, we do not recommend that he or she be given a copy of the trust. Instead tell him that he is to take over your trust if you get sick or pass away. Tell him where he can get your trust papers and records. Also, tell him who your attorney is and recommend that the attorney can be contacted for advice. If your successor trustee is not a beneficiary of the trust, such as a bank trust department, then it does not hurt for the successor trustee to have a copy of the trust.
Q. If I want to change my trust, how can I do it?
A. The trust may be changed at any time during your life by a written instrument delivered to the trustee. Minor changes can be contained in amendments, while major changes are best dealt with by re-stating the document in its entirety. Do not write on your original trust; ask for our suggestions about how best to accomplish your objectives.
Q. How often should I review my will and trust?
A. Most people's assets, family situation or wishes change at least somewhat over a 5 year period. This is a good interval between reviews for most people. Of course, if you marry or divorce, or have a major change in your situation, a revision may be necessary. Normally, moving to a different state or having additional children will not necessitate revision.
Q. Where should I keep my original will and trust?
A. We recommend that you keep the original documents in a safe, accessible place such as a strong-box in your home or a jointly titled safe-deposit box, or a box in the name of your revocable living trust. Keep your copy where you and others can find it, and write the location of the original on the copy.
Q. What work does the attorney do after my death if I have a living trust?
A. There may be several or absolutely no duties for the attorney. The attorney's duties might consist of any or all of the following:
(a) Advising the successor trustee what his or her responsibilities are on carrying out the provisions of the trust.
(b) Explain to the trust beneficiaries the provisions of trust.
(c) Preparing the Federal estate tax return (Form 706) . This tax form is needed even if there is no probate. This is the tax return that computes the Federal estate tax due at death.
(d) Preparing deeds or assignments to effect a sale or transfer or real estate, notes, mortgages or land contracts held by the trust.
(e) Preparing administration. papers and obtaining a court order for transferring any assets that were not in the trust at death.
Q. What will the attorney charge for these services?
A. Fees for these services vary in each case. The point to keep in mind is the better job that you do in funding your trust and the better businessperson that your trustee is, the less work (and fees) for your attorney.
Colucci, Colucci & Marcus, P.C.
552 Adams Street
Milton, MA 02186
Estate planning allows you to decide how your personal and financial affairs will be handled if you become incapacitated and how assets will pass to your family upon your death. Estate planning usually involves two steps: designing a plan that is appropriate for your circumstances and signing legal documents to make sure that your wishes are carried out. The following are some of the most common estate planning documents.
• Last Will and Testament
A Will is a legally binding written statement of who will receive assets upon your death. A Will also appoints a legal representative (Executor) who will gather assets upon death, pay off any debts, and distribute assets to the appropriate individuals. In order to have authority to access a decedent’s assets, the Executor must be appointed and the Will allowed by the Probate Court. Merely being named as Executor in a Will, without the involvement of the Probate Court, does not give the Executor the ability to access assets.
It is a common misconception that having a Will alone avoids probate - it is the Will itself that is probated through the court system. Only assets held in your name alone that do not already pass by operation of law are distributed according to the terms of the Will. Jointly held assets and assets which have a named beneficiary pass directly to the joint owner or the named beneficiary without regard to the terms of your Will. Therefore, joint bank accounts, life insurance policies, most retirement funds (IRAs, 401(k)s, 403(b)s, etc.), and annuities are not considered probate assets.
You can amend your Will (a codicil is an amendment to a Will) or revoke your Will at any time, as long as you are competent to do so.
An original Will should be kept in a safe place, preferably in your home. If you keep your Will in a safe deposit box, you will want to make sure that someone else can access the box if you die. There is no need to provide a copy of your Will to family members or the nominated Executor.
• Durable Power of Attorney
A Durable Power of Attorney (DPOA) is a written legal document authorizing a person to act on your behalf on financial matters. There are two basic forms a DPOA can take: a present DPOA and a springing DPOA. A present DPOA authorizes the person you name (the "agent") to act for you as soon as it is executed. A springing DPOA becomes effective only upon your incapacity. While it would seem to make sense to use a springing DPOA, springing DPOAs are rarely used due to the recurring difficulties encountered when trying to use these documents with banks and other financial institutions.
The DPOA should contain a list of the activities the agent is allowed to undertake on your behalf. Typically, the agent will possess broad powers, such as the ability to make gifts, create trusts, and sell real estate. As such, you will obviously want to choose an agent that is trustworthy and capable.
An individual who has already become incapacitated does not have the appropriate capacity (the ability to understand the consequences of his or her actions) to execute a DPOA.
You can revoke your DPOA by revoking the document in writing and notifying the agent that the power is canceled. As a practical matter, however, the agent may still be able to transact business on your behalf if he has retained a copy of the document and third parties rely on this copy.
You should keep your original DPOA in a safe place, preferably in your home. If you keep your DPOA in a safe deposit box, you will want to make sure that someone else can access the box if you become incapacitated. There is no need to provide a copy of your DPOA to family members or the nominated agent.
• Health Care Proxy
Similar to a DPOA, a Health Care Proxy (HCP) allows you to appoint someone to act as you agent - but for medical, as opposed to financial, matters. A HCP does not take effect until a physician certifies, in writing, that you are incapacitated. Before that time, your agent cannot make medical decisions on your behalf. When the attending physician determines that a person lacks the capacity to make or communicate a health care decision, the physician will look to the agent to make the health care decisions. If the principal regains the ability to make treatment decisions, as determined by the attending physician, the agent's authority ceases.
Under the Health Care Proxy law, your are not permitted to designate more than one agent at a time. You should, however, designate an "alternate" agent in case the agent is unable or unavailable to make decisions on your behalf.
You may revoke your HCP by signing a document which revokes your HCP, communicating orally or in writing to your agent, alternate, physician or lawyer that your HCP is revoked, or by executing a new HCP. In addition, a HCP is automatically revoked when you are legally separated or divorced from a spouse named as an agent. While each of the above actions will act to revoke a HCP, it is recommended that all revocations be accomplished in writing with copies of the revocation letter sent to any person who previously received a copy of the HCP.
Copies of your executed HCP should be distributed to your agent, your alternate, your physician and health care providers, and your attorney. Copies may also be given to members of your family, close friends and clergy people, if you wish. You should keep the original HCP with your important papers in your home.
Living Wills, another form of advance directive (a way of making your medical wishes known if you cannot communicate with your physicians), are not used in Massachusetts.
• Revocable Trust (also called a Living Trust)
A trust is a legal entity for holding property. One or more persons (trustees) hold property for the benefit of another or several other people (beneficiaries). A Revocable Trust is a trust created by you during your lifetime that you can revoke (terminate) or amend (change) at any time. In this way you can maintain complete control over assets held in the trust. Usually the person who creates the trust (the Grantor, Settlor, or Donor) also serves as the trustee during his lifetime.
Revocable Trusts are established for many reasons, but the most common reason is to avoid probate. This is accomplished by establishing a Revocable Trust and transferring assets into the trust. Any assets held in the trust upon the Grantor’s death will pass directly to the individuals named in the trust, without the need for involvement with the Probate Court. Avoiding probate may save money in legal fees and may allow assets to pass to family members more quickly than with probate.
Revocable Trusts are also commonly used when a challenge to a Will is anticipated. For example, if you want to omit one or more of your children from inheriting any of your assets, the use of a Revocable Trust will make it more difficult for the omitted child to challenge your estate plan. This is because in the Probate Court system there is a relatively easy mechanism for challenging a Will, but no similar easy mechanism exists to challenge a Revocable Trust.
Assets held in a Revocable Trust are considered countable assets for Medicaid purposes (Revocable Trusts do not protect assets against the cost of nursing home care).
• Realty Trust
A Realty Trust is a trust designed to hold title to real estate. Prior to 2003, when real estate was transferred to a trust in Massachusetts, the trust had to be recorded with the Registry of Deeds. This meant that the trust became a public record. If real estate was transferred to a Revocable Trust and this trust was put on record at the Registry of Deeds, your entire estate plan would be available to the public. In order to avoid this, real estate was often transferred to a Realty Trust which only stated that the trustees were holding the real estate for the benefit of unnamed beneficiaries. At the same time the owner would execute a Schedule of Beneficial Interests for the Realty Trust which would name the Revocable Trust as beneficiary of the Realty Trust. This allowed a family to avoid probating real estate when someone died and made sure that an estate plan was not on file at the Registry of Deeds for the public to see.
Currently, trusts do not have to be recorded with the Registry of Deeds. For this reason, the use of Realty Trusts has declined significantly. However, Realty Trusts are still an effective tool is dividing equity in real estate between 2 Revocable Trusts (as is often done with estate tax planning).
• Irrevocable Trust
An Irrevocable Trust cannot be amended after it is created. Any assets transferred into the trust may only be distributed to beneficiaries in accordance with the terms of the trust. An Irrevocable Trust in which the Grantor retains the right to receive only income is a relatively common tool for Medicaid planning and, if drafted properly, will protect assets against the cost of nursing home care.
• Testamentary Trust
A Testamentary Trust is a trust created by a Will. Such a trust has no effect until someone dies and assets are transferred into the trust. Testamentary Trusts are most often used for Medicaid planning purposes since assets in most Testamentary Trusts are not considered countable assets for Medicaid purposes.
• Supplemental Needs Trust
A Supplemental Needs Trust (SNT) is a trust designed to provide principal and income for a beneficiary with a disability without interfering with the government benefits (SSI and MassHealth) that the beneficiary may be entitled to receive. The assets in a SNT are used to enhance the beneficiary’s quality of life without jeopardizing cash benefits or health insurance. A SNT can be funded with part or all of your estate in a number of ways, including through your Will, your Revocable or Irrevocable Trust, or with life insurance.
By Joe DeAmbrose
This note is in the nature of a “heads-up” for any retirees who are nearing age 70 ½ with a RAYSIP account balance which includes Raytheon stock. There is a tax savings opportunity available to such retirees which deserve more focus than provided in plan literature.
Here are the basics: The age 70 ½ date is important because at that date taxable distributions must be made by employer plans like RAYSIP and also by Individual Retirement Accounts (IRA’s). RAYSIP will also close out accounts around that date which could either be in the form of a distribution of the account balance or, more often than not, accomplished by way of a direct transfer of the account balance to an IRA of the retiree. The retiree can elect the method of close-out but however effected, a part of the account balance is taxable and cannot be rolled over to an IRA or made part of a direct transfer to an IRA. The taxable amount is called a Required Minimum Distribution or RMD and is calculated by dividing the account balance at December 31 of the year before the distribution year by life expectancy factors from published IRS Tables. The factor for the age 70 ½ year from the most commonly used Table (the Uniform Lifetime Table) is 27.4. The factor for the age 71 ½ year is 26.5 and on and on. The distribution for the age 70 ½ year must be distributed on or before April 1 of the age 71 ½ year. Thereafter, RMD distributions must be made before the end of each succeeding year.
To illustrate with an example: Retiree A will reach age 70 ½ in 2008, having a RAYSIP account balance of $250,000 on December 31, 2007, The RMD amount for 2008 is $9,124 ($250,000/27.4) which must be distributed by RAYSIP on or before April 1, 2009. A wants to have the balance of the account directly transferred to an IRA.
The practices followed by RAYSIP as to the timing of the distribution of RMD amounts and the close out of the account are not published but based on discussions with a Fidelity retirement specialist (Fidelity administers the distributions and account close-out) there appears to be some flexibility in arranging the timing of distributions and transfers, ranging from having the age 70 ½ RMD distribution and the IRA transfer made in 2008, or having RMD distributions and IRA transfer made in 2009, or having an RMD distribution in 2008, and the IRA transfer made in 2009. Note that unless the account is closed out in 2008, RAYSIP must make an RMD distribution for the age 71 ½ year in 2009.
The key to the tax savings is the Raytheon stock account in RAYSIP. The tax law provides favorable tax treatment if employer stock is distributed in kind from a plan like RAYSIP. Distributions from IRA accounts are not eligible so the tax savings opportunity is not available once RAYSIP accounts are closed-out. To expand on the illustration, assume A has Raytheon stock in RAYSIP with a value of $30,000 and a cost of $14,000. The built-in gain of $16,000 is technically called “net unrealized appreciation” or NUA. Having a Raytheon stock account is common as RAYSIP includes the former RAYSOP plan that held only Raytheon stock and for many years, the RAYSIP “match” was made in Raytheon stock. The cost amount is the value of the stock when it was acquired. The cost amount is not contained in RAYSIP statements but is available on the Fidelity NetBenefits website or can be obtained from a Fidelity retirement specialist. The NUA amount is not subject to tax when the stock is distributed and will only be subject to tax when the stock is sold or otherwise disposed of, and then, the NUA amount will be taxed at capital gain rates. So, a portion of a RAYSIP stock distribution is taxed at capital gain rates rather than ordinary income rates. The capital gain rate will always be lower than the ordinary income rate. Assuming A’s normal tax rate is 28%, A’s capital gain rate would be 15%. If A elects to take a distribution of all or a portion of the Raytheon stock in kind, the cost component of the distribution will be subject to tax at a 28% rate and the NUA amount will be subject to tax at a 15% rate. A tax of $8,400 would be imposed on a distribution of $30,000 at ordinary income rates ($30,000 X 28%). The tax would be only $6,320 ($14,000 X 28%) and ($16,000 X 15%) if stock with that value were distributed in kind and then sold, and payment of $2,400 of that tax could be delayed to another year if the stock were not sold.
But wait---most employer plan distributions can be transferred or rolled over to an IRA without incurring any tax. True, a tax on distributions from pre-tax accounts will have to be paid at some time at ordinary income rates because of the RMD requirements described above but that tax bill will be paid over dozens of years in the future. “Why pay it now”, A might think. Here’s why. A cannot postpone tax on RMD distributions. A is facing a taxable cash RMD distribution for 2008 of $9,124 on which an ordinary income tax of $2,555 will be imposed. If instead, he elects to take a distribution of Raytheon stock worth $9,124, the pro-rata NUA amount (53%) of $4,866 will be subject to tax at the 15% capital gain rate reducing the aggregate tax to $1,922. The stock distribution of $9,124 satisfies the RMD requirement for the year without regard to the favorable tax treatment. The tax savings are greater if A holds on to the stock as an investment because $730 of the $1,922 tax can be deferred until he sells the stock but that involves a separate investment decision.
The tax savings can be even greater. If A acts to delay payment of the 2008 RMD distribution to 2009, but before April 1 of 2009, and delay the close out of the account to 2009, RAYSIP will have to make another RMD distribution for 2009 (which would have to be made by A’s IRA if the RAYSIP close out took place in 2008). On A’s numbers, the 2009 distribution ( December 31, 2008 account balance/26.5) should be over $9,000. In total, A can elect a stock distribution of about $18,124 in 2009 which will cover the RMD requirements for 2008 and 2009. If the stock is sold in 2009, the tax will be $3,818 compared to $5,075 if there were a cash distribution. If the stock is held, the tax for 2009 would be reduced to $2,368. Substituting a stock distribution for two RMD distributions enhances the tax savings.
There is one important condition for success. The stock distribution must be part of a distribution of the entire RAYSIP account balance which takes place within one taxable year on account of certain events. This “lump-sum” distribution requirement is a little tricky but manageable. One way to satisfy this condition while maximizing tax savings is to arrange for a close out of the RAYSIP account in the age 71 ½ year (2009 in A’s example) with both RMD distributions in that year. This is something to be worked out with a Fidelity retirement specialist.
Taking an available employer stock distribution instead of a taxable cash distribution, such as an RMD distribution, should always be the right choice but individual circumstances have to be taken into account and may alter the size of the savings. This is not a simple subject. It involves overlapping tax principles and not-so-simple calculations; qualified tax advice should be obtained.
I am sure you have heard of the stimulus package recently approved by our government. It will provide up to $600 per individual and $1200 per couple depending upon your income.
Many seniors do not file income taxes as their income does not warrant it. Even if you do not owe any taxes, you must file a federal Income Tax return in order to receive your share of the rebate. Of course if your income is low enough you can file a very simple 1040A form. If you need help completing the form you can ask at your local senior center. The center may offer the service or know where you can obtain free or low cost help. AARP provides such a volunteer service. If you have a problem locating an AARP volunteer let our office know and we will try to locate a volunteer for you.
Raytheon ERISA Litigation
A retiree informed us that he recently received a Form W-2 relative to Raytheon ERISA Litigation and had several questions. If you received a similar Form W-2 and also have questions, you should call The Garden City Group at 866-881-7492.
Taxation of Pension Plan Distribution?
You can recover your contribution amount tax free on a pro-rata basis as you receives pension payments. The data goes into line 16a and 16b on Form 1040. Line 16a is the total pension amount received and line 16b is the taxable amount. The taxable amount is the total less the amount of pro-rata basis recovery for the year.
There are a couple of acceptable methods for determining the non-taxable piece. One is called the simplified method and a worksheet can be found in the IRS instructions to Form 1040 for line 16.
For example, if the pension started in 2007 at age 65, the simplified method assumes that there will be 260 monthly payments and you divide your contributions by that number to get the monthly exclusion which would be $28.07 for $7,300 of contributions. If the payout is in the form of a Joint & Survivor a different number would be applied.
I write to you as the President of the Association of Raytheon Retirees, Inc., (ARR) a Massachusetts non-profit corporation. The ARR is an organization of thousands of retirees of Raytheon Company and was formed and operates to monitor, preserve, and improve retirement benefit undertakings of the former employer of the membership. The primary benefits in this regard are pensions and retiree medical.
The Association is acutely aware of the economic difficulties faced by our membership and by other retirees similarly situated across our nation. Medical costs continue to rise while the purchasing power of fixed pension income erodes. Employers are eliminating defined benefit pensions and are deaf to pleas for modest cost-of-living increases in pension payouts. The lot of many retirees is increasingly precarious, especially those who retired many years ago.
The Congress is currently working on a stimulus package based largely on providing relief to taxpayers. The ARR has a proposal in this regard; one which would advance the goal of economic stimulation and would relieve some of the financial burden on retirees from escalating medical costs. There are many ways to deliver a tax benefit to needy retirees, including adjustments to the social security taxation thresholds and the medical deduction limits but the Association’s proposal is much simpler—extend a benefit that was accorded to retired public safety officers in the Pension Protection Act to a broader class of retirees.
The benefit provided to retired public safety officers is contained in section 402(l) of the Internal Revenue Code. Pursuant to that section, a limited amount ($3,000) of an otherwise taxable pension distribution from a governmental plan can be applied to the payment of health insurance premiums of a retired officer without tax consequence. A few simple amendments would make this tax benefit available to retirees in general or, if budgetary constraints are an impediment, to a defined subset of these retirees. For example, the subset could take into account age and/or income levels.
The broadening of the class eligible for this benefit also would level the playing field. A draft of the specific changes in statutory language to implement the proposal is attached for your assistance.
The Association encourages you to consider this proposal as you draft legislation to provide a needed stimulus to the economy. This proposal will target the benefits of the stimulus at one of the most needy and deserving citizen groups.
Association of Raytheon Retirees, Inc.
MIT recently completed putting every one of their courses on- line. That is over 1800 undergraduate and graduate courses. The courses include video lectures, lecture notes, assignments and exams. The courses include Algebra, Physics, Differential Equations, Technology and Culture in Japan, Literature and History. Visit their website at http://ocw.mit.edu to take a look for yourself. They are all available free of charge and over 1 million people a month are logging on.
Medical Plan Comparisons For Retirees 65+ By Bruce Nogueira
Each year, around November 1, retirees over 65 are asked, by Raytheon, to enroll in a medical plan for the coming calendar year. Many retirees throughout the US have only the choice between Raytheon’s Medicare Plus Plan (PLUS plan) and “no coverage.” However, in some areas Medicare Advantage plans are also an alternative.
This article is intended to provide a comparison of the highlights of the PLUS plan with a couple of Medicare HMO plans. As previously, we’ll use the current year (2007) benefits design and premiums for comparison-since we know the details. Please read carefully your 2008 enrollment package for any changes to the plans & premiums.
We will use the Eastern Mass. Enrollment options which are available to this writer. Also, please note that the retiree individual premiums listed are for Raytheon retirees who retired after 1994. It is hoped that retirees living outside of E. Mass. can use this analysis in reviewing any Medicare Advantage plans offered in their area.
At the outset, you should understand that the PLUS plan & Medicare HMO’s offered by Raytheon are all employer sponsored group plans. Please do not confuse the Medicare HMO Blue or Tufts Medicare Preferred plans with similar names that Blue Cross & Tufts offer to the general public as private plans. The benefits differ somewhat & the Rx coverage, if any, is less comprehensive in the private, non-group plans.
Raytheon Medicare Plus
This plan offers supplemental coverage after Medicare A & B or Medicare D (Rx plans) pay their benefits. Raytheon has designed this plan as a catastrophic coverage medical plan. You have to pay $1750 out-of pocket before the PLUS plan pays the 20% coinsurance not paid by Medicare. Similarly, the PLUS plan pays 80% for drug expenses only after your total drug costs reach $2400 with your Medicare D provider.
Medicare Advantage Plans
Medicare HMO Blue & Tufts Medicare Preferred are paid by Medicare to provide all your medical & drug benefits in place of Medicare. The benefits pay for most medical care in full after a co-pay. These are managed care plans that have a limited network of MD’s and hospitals available for your care. You must have a primary care physician (PCP) & if you use services outside the network, or without PCP referral, you could end up paying 100% of the expenses.
Highlights of Plan Choices for 2007
Raytheon Medicare Plus
· Access to virtually all hospitals, MD’s, & Labs.
· Lower monthly premium.
· Pays inpatient Medicare deductible in full.
· No annual or lifetime benefit limit.·
· Most outpatient expenses not covered until you spend $1750 out-of-pocket.
· You have to enroll in a Medicare D to get Rx benefits after $2400 total drug costs.
· Reimbursement at 80% after the $2400 is an arduous process.
Medicare HMO Plans
· Most medical & Rx expenses are covered in full after a small copay, when care is received in-network.
· All medical & Rx benefits are delivered by one provider-for example, Blue Cross or Tufts.
· Prescription drugs are simple & straight forward to purchase-no need to keep records & file for reimbursement after $2400 is reached.
· No annual or lifetime benefit limit.
· Premiums are higher.
· The networks have a limited group of MD’s & hospitals, & change annually.
· No coverage is provided for services received outside the network or if not referred by your PCP.
There is no one right answer. Each retiree’s medical needs are unique, so you should tailor your plan selection accordingly. It goes without saying that you should make sure that your primary care physician (PCP), specialists & hospitals used are in the HMO network before you enroll.
Recently, I talked with an E. Mass. retiree who was about to turn 65. He explained that Raytheon sent to him a lot of information on the PLUS plan, but nothing on the plan details for Medicare HMO Blue or Tufts Medicare Pref. He contacted the HMO’s & received a one page summary of benefits. After much follow-up, he got more details about the HMO plans. He initially thought that since he was in the HMO Blue under 65 plan & was accustomed to the network and referral restrictions, he would enroll in the Medicare HMO Blue plan. To his surprise, his PCP & some Boston hospitals were not in the Medicare HMO Blue network. Author’s note: my wife and I experienced that same problem a few years ago. The retiree did find his PCP in the Tufts plan and will try that HMO for a year.
For the past 3 years, I have been concluding the Raytheon PLUS plan was not a good value for retirees. But here is a case where the plan worked. A retiree in Florida sent an e-mail to me extolling the coverage under the PLUS plan when it is really needed. His wife had surgery for cancer & subsequently received chemo & radiation treatments on an outpatient basis. In addition, a $5000 injection was required after each chemo treatment to offset the ill effects from those treatments. Since the $1750 out-of-pocket was reached quite quickly, virtually all of these expensive outpatient treatments were covered in full between Medicare & the PLUS plan. This is an example of the PLUS plan’s catastrophic feature working to provide coverage for unexpected major medical events.
Finally, you should know that if you enroll in a Medicare HMO plan in 2008, and subsequently decide that you made a mistake, you can disenroll from the HMO & enroll in the Raytheon Medicare PLUS plan immediately. The Raytheon Benefits Center can help you on this procedure.
By Bruce Nogueira
Some retirees-mostly ones who retired after 1994-have turned to private medical plans offered in their State instead of enrolling in Raytheon’s offerings of Medicare PLUS or a Medicare HMO plan. These plans are becoming much more competitive with Raytheon’s group choices than in prior years. But tread carefully, there may be limitations in these private plans that are not in the Raytheon sponsored group plans.
If you decide on a private medical plan instead of Raytheon’s plans, you would have to select “no coverage” on the Raytheon enrollment, & won’t be able to join a Raytheon plan again until January 1, 2009. However, you can get the real net cost of these private plan premiums by deducting the $ 77/month for the PLUS plan. Most of the private plans require a one year enrollment commitment when you sign up.
We are not suggesting that retirees necessarily purchase these plans, but rather know of their availability in case the plan designs & premiums may fit better with your medical coverage needs.
These plans are the traditional Medicare supplemental type plans that we have had around for the past 30+ years, & are offered by Blue Cross, AARP, etc. In essence, these plans pay the portion of your medical bill that Medicare doesn’t pay. These private plans fare well compared to the PLUS plans $1750 out-of-pocket before supplementing Medicare payments. But these private plans don’t have drug coverage. Therefore, you would have to buy a Medicare D plan for drug coverage.
One such Medigap plan is Medex Bronze in Mass. This plan covers the 20% co-insurance in full for outpatient medical expenses, as well as the Medicare B deductible & in-patient deductible. This plan’s 2007 premium is $150/month. If you bought the least costly Medicare D plan from Humana, for example, it costs $17/month. The total cost would be $167 (less the $77 premium for Raytheon PLUS) nets at $90/month. But, unlike the PLUS plan, Humana drug plan does not pay anything in the gap-when total drug costs exceed $2400.
This plan combination would probably be better for someone who has many outpatient medical expenses & substantially less than $2400/year Rx expenses.
Medicare HMO private plans
The private versions of the Raytheon group Medicare HMO’s are essentially the same for the medical expenses but differ for Rx coverage- slightly in the co-pays but significantly in coverage in the gap where typically only generics covered; whereas the Raytheon version has no limitations after $2400 is reached.
Here are some monthly premium comparisons for 2007:
Medicare Private Fee For Service (PFFS) Plans
Like the Medicare HMO’s, Medicare pays the insurers to provide coverage in place of Medicare for these PFFS plans. The PFFS’s cover both medical & drug expenses as part of their design. But unlike HMO’s, PFFS plans do not have restrictive networks, PCP’s or referral requirements. These plans are quite new to the market, & we don’t have a lot of experience with their effectiveness.
A typical plan of this type is the Tufts Medicare Preferred-PFFS. This plan allows you to use any MD or hospital & you pay co-pays like an HMO—typically $15 for an office visits. The prescription drug benefit co-pays are:
These co-pays apply only during phase 1 (under $2400 total drugs); but only generics are covered in the gap (Phase 2) after $2400 is reached.
Here are some monthly premiums for a couple of PFFS plans:
· Tufts Medicare Preferred PFFS: $124 (2008)
· Harvard Pilgrim First Seniority Freedom PFFS:$78 (2007)
If you consider this plan a replacement for Raytheon PLUS, you could reduce the above premiums by $77/month.
Be Careful ! Even if your Rx annual costs are well below $2400, these PFFS plans are so new that the low premiums may be to attract retirees into these plans & increase the premiums in future years. Similarly, because of their newness, not all MD’s or hospitals will accept these PFFS plans for payment.
I think it would wise to wait a year before signing with a PFFS plan—to let the bugs work out. However, these plans have a design that, I believe, will be attractive for a lot of retirees.
Private Medicare Advantage PPO Plans
A PPO plan has a much bigger network of MD’s & hospitals than its cousin the HMO plan. Also, the PPO does not require a PCP or referrals, & out of network usage is subject to higher co-pays (for example, $30 vs. $15 in-network) compared to no coverage out of network for the HMO’s. Again, Medicare pays the PPO to provide medical & dental benefits instead of Medicare.
The medical coverage is with co-pays & is very comprehensive, & the prescription drug benefit is similar to the above PFFS benefits.
Here is the Private Tufts Medicare Preferred PPO drug benefit:
These co-pays apply only during phase 1 (under $2400 total drugs); but only generics are covered in the gap (Phase 2) after $2400 is reached.
The Tufts Private PPO plan has a monthly premium of $114. If you reduce this by the $ 77 you would have paid for the Raytheon PLUS plan, you would be paying $37 extra for the PPO to get full outpatient benefits after a co-pay & co-pays for Rx’s on the first
$2400 of drug costs. The key, of course, is whether your MD’s & Hospitals are in the network or not—but you have a greater chance that they are in than does the Medicare HMO.
Electing “no coverage” for Raytheon & Medicare D
This is a little risky, but I have only Medicare A & B for medical coverage. I have about 6 MD visits a year, some outpatient tests & X-rays & pay the 20% myself as I would have under the PLUS plan. My Rx’s are 2 generic & 1 pref. brand which I pay in full since I have no Medicare D drug plan. If I joined the least expensive Medicare D plan, it would cost an extra $500 to buy the same prescriptions through the Medicare D plan. There is a penalty if I join a Medicare D plan in the future. My calculation is that the penalty would be $3.35/ month for each year that I’m not enrolled—that is if they enforce a penalty at all. My savings in premiums is $94/month ($77 for PLUS & $17 for Humana Rx plan) for an annual savings of $1128. So, in effect if my out-of-pocket payments are less than $1128, I have made the right choice. The risk, of course, is that I’ll have a major medical event requiring hospitalization & expensive follow on outpatient treatment. This approach is not for everyone, & should be used with great caution.
Editor's Note: There was a recent article in the Boston Globe describing these fee for service (PFFS) plans offered in New England. The great caution was MDs that accept regular Medicare payments are not required to accept the coverage of these PFFS plans and you have no regular Medicare coverage to fall back upon.
(There is a link to the complete Globe article on our website.)
The rates for 2008 are surfacing!
observation: The Humana Rx standard plan will cost $24/month & the Humana Rx
enhanced plan will cost $25/month in 2008. For the extra dollar, it might be
worth it for retirees to enroll in the enhanced plan next year. The enhanced has
no deductible ($275 for Standard) & co-pays that are generally favorable vs.
standard's 25%-- except if you have tier 3(non-preferred brand). I took my
wife's payments for 2007 & compared the 2 plans for 2008. It came out to a
wash--only because my wife had a tier 3 drug. Retirees should calculate their
'08 costs under the enhanced vs. the standard to see which provides the better
SOME HELPFUL HINTS IN PLANNING YOUR RETIREMENT
WARNING NOTE: The Raytheon Human Resources and the Raytheon Retirement Benefit Center are the official sites for retirement related questions. All items mentioned here should be verified with Raytheon by the potential retiree before taking any action.
The Association of Raytheon Retirees does not guarantee that this information is current or correct. The Planning Guide is presented here as lessons learned to identify areas of possible follow-up. These lessons learned have been assembled over the years by many non-union Raytheon employees to help future retirees.
This particular guide is applicable to a large, but limited group of employees; those from Massachusetts or other legacy Raytheon organizations. If you are aware of changes, corrections or similar guides in use elsewhere, the ARR would appreciate a copy to help other fellow potential retirees.
OPTIMUM RETIREMENT TIME
RETIREING BEFORE (60) IS NOT A GOOD OPTION
SUBMITTING YOUR RETIREMENT PAPERS
BENEFITS CALCULATION PACKAGE
RAYTHEON RETIREMENT GUIDE
The Raytheon Retirement Guide is a booklet that contains the following information:
PERFORMANCE SHARING PLAN
SHORT TERM DISABILITY
This is the new policy:
You no longer receive a "Verification of Retirement Form" in your Raytheon Retirement Guideline booklet. You now have to notify your supervisor (however you feel best- in person, e-mail, letter, etc) one month prior to your retirement date. He then notifies HR, who in turn will (may as it is very dependent on the individual that you are working with in HR) start the ball rolling for payroll. Your supervisor is supposed to provide you with the latest Checkout form, but it seems no one really knows which is the latest form. When I was checking out half the people I had to get to sign my form stated that this was a new form that they had never seen before and where were they to sign- as if I should know!! Go to http://docushare1.app.ray.com/dscgi/ds.py/View/Collection-38297 to get the latest form. There is a long list, but I found the correct one at or near the top of the list shown.
Check with both the library and document control a month or so before you retire to find out if there are any old books or documents that they may believe that you have.
Checkout was much easier than I thought. It only took me about 1 hour to check out. You will need your cell phone, pager, credit card, etc to turn it during check out. You will also need the ID Tag numbers (L7xxxxxx) from each item so that IS can log you out. They will impound your computer, so do not check out too soon before you actually want to leave. I uploaded all of my hard drive to a server for others to retrieve if necessary. Otherwise it will all be lost!!
This whole retirement process is pretty much open loop. You get zero feedback unless you call and ask questions.
With the new medical privacy laws, even your spouse cannot discuss claims matters with Medicare, Fiserv, or your Medicare D Prescription Drug Provider (PDP).
One way to ease this problem is to authorize a medical representative. This year, I completed forms for Medicare, Fiserv, and Humana to name my wife and daughter as my authorized representatives to whom my personal health information may be disclosed. Similarly, my wife completed those forms naming me and our daughter as authorized representatives on her behalf.
You can obtain the privacy forms by calling Medicare, Fiserv, and your Medicare D PDP. The forms are mostly straight-forward, but the Medicare form will require care when answering the questions.
On question 2, check the box: “Other personal health information”, and write the explanation: “All my personal health information. “
On question number 3, check the box that has a start and stop date for disclosing my health information. I put start 01/01/2007 and a stop date of 12/31/2012.
This is 6 years and I hope I remember to renew the document at the end of 2012. In retrospect, I probably should have put the stop date way out—such as 12/31/2027.
Health Care Proxies are used primarily in situations where you are unable to make medical decisions on your own. This Medical Representative approach is a useful tool for claims issues before you need a Health Care Proxy.
I have already used this authorization to help my wife on her Rx claims with Humana this year.
For those retirees whose total Rx costs are likely to exceed $2400 the coordination of benefits with the Raytheon Medicare Plus Rx plan could result in the same problems our retirees experienced in 2006. Raytheon has contacted most of the major Medicare D PDP carriers to get cooperation in processing Rx claims when your PDP stops paying toward your prescriptions, because your total Rx costs exceeded $2,400.00
Unfortunately some pharmacies and mail order vendors might not follow the Coordination of Benefits process as set up by the PDP’s.
To help your chances of getting the Raytheon 80% benefit when $2,400.00 is exceeded, here are a couple of suggestions: contact your PDP and ask for the coordination of benefits office (for example, the Humana # is 800-999-1118), and request a coordination of benefits form. Complete this form with the requested ID information from your Raytheon Medicare Plus card, and mail the form to your PDP. after your drug costs total about $500.00, call Innoviant(1-877-559-2955) to see if they are receiving your Rx claims information from your PDP. If not, request Innoviant to follow-up with your PDP to set up a proper electronic exchange of your claims data in the future.
Raytheon believes that the coordination of benefits with the PDP’s should be better in 2007 than the problems many experienced last year trying to get payment from the Raytheon plan. But you can help yourself by using the above approaches early in the year to get your Rx claims data onto the Innoviant system before your drug costs exceed $2,400.00.
There have been recent changes in the tax laws aimed at encouraging charitable contributions. It allows individuals over age 70 ½ receiving payments from an individual retirement account (IRA) in 2007 to have all or part of the payment made directly to a charity. The result is that the payment is not subject to tax as it would normally be. On the other hand, no deduction is allowed for the directed payment. Some individuals could gain a tax benefit by making a directed payment from an IRA rather than receiving a payment from the IRA and making a separate charitable contribution. The potential beneficiaries are a narrow group to start with, i.e., age 70 ½ with an IRA. Tax savings only arise for a relatively small subset of that group such as non-itemisers and those with tax features affected by the amount of their income. Some possible beneficiaries are:
Many retirees receive mandatory distributions from IRA’s. They also may be
making recurring contributions to their church or other charities. The new law
allows such individuals to minimize income taxes when there is such a
combination. If you think you may qualify, ask your tax preparer if changing how
you contribute in 2008 can save some tax dollars.
View Slide Show of May 15, 2008 Annual Special Meeting
Last modified: 02/26/12