Big decisions to make

[londonteatime]

Well, now that I have SSD, I have to find a way to live on it. My monthly benefit is $1,100 and I have no other income. I've pared down my bills as much as possible and got them down to $1,250 but that doesn't include food, clothing, gas, and INSURANCE! Luckily, I do have savings to supplement for now but that won't last mega-long.

Here's my dilemma: I haven't taught in public schools long enough to get much Teacher Retirement. The deal is that I can receive $150 per month for five years and they would also cover my insurance but for the halfway decent plan I'd have to pay $200 per month. Basically, all that means is my little payment would offset my insurance costs and then I'd have to add $50 per month.

The other thing I could do is get a refund of the money I paid into Teacher Retirement -- it's about $9,800. If I took the monthly payment for 5 years, I would basically lose over $800 of the money I paid in. I don't know why they do it that way, but they do. However, if I take the lump sum, I will sever my ties with Teacher Retirement and not get their insurance.

I figured it out and I would actually come out about $1,700 ahead (not including interest) if I took the lump sum, invested it, and continued with COBRA, which would end just 2 months before I became eligible for Medicare.

The thing I need to find out is if I'd have to pay 30 percent taxation on that lump sum. I tried to speak with someone from the IRS today but was on hold so long I had to give up. I have an annuity that I'm allowed to cash in if I've been declared disabled and I was wondering if that applies to retirement, too?

One other possibility is that I take the monthly payment and try to find some other program that offers insurance. Why, oh why, is there a two-year wait for Medicare? Grrrrrrrrrrrrr!

I really need some good advice!

Julie

[peonyprincess]

You do have a dilemma. In my opinion, I would not want to sever all ties with teacher retirement, you never know when you might need them. From what I understand, any time you pull money out of a retirement account, you have to pay a penalty and interest on the money, which is about 30%. I received about the same amount from a retirement program from a divorce and I only received about $7500. Lucky for me, the judge stated that my ex had to reimburse me the penalty and interest. I chose to have the money come out right away so I was not scrambling come tax time to make up the difference.

One thing you have to look at is that you mentioned that your Cobra would end two months before your medicare would kick in........again in my opinion that is a little scary. Can you afford to be without insurance for that long of a period of time? Factor in the cost of medications, doctors visits, and of course always count on the unforseen hospitalization. Yes, I am a worry wart when it comes to insurance, but then again, I have a bad track record with major illnesses style_emoticons/<#EMO_DIR#>/laugh.gif . I understand that you would have to pay an additional $50 for insurance thru teacher retirement, but is the insurance worth it? How well do they cover medications, etc. My mom and grandmother retired from teacher retirement and have very good coverage, but that is in Illinois and I am not sure that all states are the same. As for looking for another insurance program, before doing anything, check around. When people have been diagnosed with any lifelong illness, it is very difficult if not impossible to obtain coverage elsewhere. I tried to take out an additional life insurance policy and was turned down flat because of my lupus.

Looking at the figures that you gave you have approximately $1500 in living expenses. You will get $1100 from SSD which leaves you $400 short. If you take the teacher retirement then you will be $450 short, however, your insurance will be covered as well. I know you mentioned a savings account, but I also know that doesn't last long. Not knowing your financial situation ie: house and car payments, charge cards, etc, is there a way you can combine them into one payment? Could you sell your car and possibly purchase a less expensive one? I am sure that you have figured and figured until your eyes are ready to cross. Is it possible that you could go to a financial planner to help? Maybe someone where you bank could be of assistance or a tax accountant.

I am not familiar with annuties do I am sorry cannot advise there, sorry. Maybe someone el se will come along and be more knowledgable than me. I wish you the best with these difficult decisions.

Nancy

[babieblues59]

This might not be of much help but its just a thought... regarding insurance ... well actually lack of .... charity care is what I have been surviving on which is covering my doctor visits and hospital visits along with tests needed. The only thing not covered is my medications however my most expensive one I have gotten in touch with the manufacturer and I get it free for one year. Each pill should cost me $7 which is almost $50 a week... so on and so forth... anyways im covered through them due to my financial situation for one year for free. The rest of my meds which are a lil less pricey I have a discount card which is i think 10-30% discount but every lil bit helps and makes things a lil more affordable. Also remember doctors have access to samples so dont be ashamed to ask... Im sorry if this doesnt help I just thought maybe it would give you a different avenue to explore temporarily until your medicaid kicks in so that you dont feel like you have to make an rash decisions.

[dudley]

Hi Julie,

before I would make any decisions I would go down to the social services in your area. You might be entitled to other things that can help your monthly budget. Apply for everthing.

Any thing I get is through the department of aging. Yeah I am 47. I get prescriptions for 5 dollars. use to get money off electric and oil. That stopped this year NJ is broke. Also I am entitled to a discount for my phone and are free transportation to stores and doctors. I will only use this when the drive is real long. The state is also supplying me with someone to clean my house ever 2 weeks.

You have no idea what is out there until you visit all the services. Maybe you will be entitled to enough to strecth your budget.

I personnally would not mess with health care. I am on my own policy until medicare kicks in. I pay out over 600 a month. I do know that medicare is not free. There are parts A,b and other stuff. Don't know the cost because I have not looked into it yet.

Try to not tap into income that has yet to be taxed for this year. I am saying this blindly-I don't know what your income was for the year before you went on SS.

Best of luck

Elaine

[raggedyann1]

Julie,

Your cobra shouldn't end before medicare starts. Your medicare will start 22 months from now. When the initial 18 months of cobra ends you have the right to an 11 month extension because you are disabled and unable to work. You will also be eligible to extend your son if you currently pay for his medicial ins an additional 7 months to the 36 month mark - if you need to. It could well be cheaper for you to buy a individual policy for your child than keep him on cobra.

The general rule of thumb is that if the money goes into the retirement account with pretax dollars , meaning you did not pay taxes on the money the year you deposited then you pay penalty and taxes for withdrawal. You may not have a penalty because of your disability but that is something you need to check on for sure.

Can you sell your current residence and move into a less expensive place?

At that income you could well be eligible for food stamps and medicaid and not have to worry for paying for insurance at all - of course with medicaid there is a far more limited pool of doctors who will accept payment from them. But you might still come out ahead to pay cash for some specialists and get the very reduced copay for meds thru medicaid.

Please seek out advice not just from your tax man at this point in time. A social worker can also direct you to other programs like reduced cost phone coverage. The utility companies also have programs for the limited income clients.

Karen


Karen

[londonteatime]

Thank you ALL for such good advice!!!! I do need to sit down with a social worker who has knowledge of disability and programs. I just have to find one! I asked at my rheumy's office and they didn't know of any outside of the hospitals.

Selling my house at this point would be foolish. My mortgage payment is only $650 per month and that will likely be reduced soon, too, since my property taxes will be lowered. Texas gives disabled people $10,000 off their taxable property value and also freezes the tax rate. The lady at the tax office said that since I was found to be disabled as of last year, I may actually get a refund from last year's taxes, too! You can't rent any decent place for less than $550 and there's a HUGE wait for subsidized housing down here. There was an article in the paper that said it's at least 2 years. I only owe $37,000 on my house -- it just wouldn't be worth it to sell something I will own outright in the not-so-distant future to save less than $100 per month.

I think I'm going to call the Department of Human Services and set up an appointment. I think I have too much in my savings account to get Medicaid but it's worth a shot. One problem is that my son's college trust fund that my parents bequeathed him is in my name, so it looks like I have a lot more money than I really do. That will change drastically in a few months when I pay for the fall semester!

I've considered selling my car -- I just don't know. It's all paid off, a 2005, and has an excellent warranty. I get 3 years of free oil changes and maintenance. It will last me a really long time and costs me nothing but gas to operate. Yeah, I could sell it, buy a cheaper car, and probably have a thousand or two left over but is that the smart thing to do in the long run? That's what I can't decide.

Sigh, so much to consider. I know we all have these burdens and it just doesn't help one's mental state, does it? It's especially hard when you're alone and don't have a spouse to help.

Julie

[raggedyann1]

Julie,

Of course you should keep your house, now that you have explained it.
They do not consider your residence and 1 primary vehicle when applying for social programs. Just go to a local hospital and ask to see the social worker there. The other place to look is the agency on aging. That is the name in calif, they have social workers there also. If you are unsure go to a local seniors center and yo uwill find where to go.

Take care,
Karen

[peonyprincess]

I agree with Karen about not selling the house. AS for the car, I would not sell it either. You already know what kind of shape it is in and you still have the warrenty, etc on it. If you were to sell it and buy something else, you run the risk of taking on someone elses headaches and could potentially run into costly repairs. In Illinois we too have a Department of Aging, so I would imagine Texas would as well. Also, check at your local hospital, while you are not currently a patient, they can point you in the right direction of who to talk to about your situation.

Nancy