Considering a variable annuity as an income guarantee in retirement? A variable annuity is a long-term investment and has many features that may appeal, such as a guaranteed income for life which insures you cannot outlive your assets. There is even a death benefit should you die before you start receiving payments. Generally a variable annuity is one you purchase with either a lump sum payment or several payments and the annuity increases or decreases in value depending upon your investment choices. Your contract with the insurance company specifies that they will make periodic payments to you beginning at an agreed upon time.

The tax laws surrounding variable annuities are complicated, and you may want to consult a tax adviser on whether a variable annuity is right for you.

The SEC has a website that provides an overview on variable annuities and how they work. For more information, visit the US Securities and Exchange Commission’s website on Variable Annuities.

The House has passed a bill that will gradually raise the minimum wage from $5.15 to $7.25 per hour over three years. The bill will now go to the Senate.

With more seniors and retirees staying in the work force, many taking part time jobs as supplemental income or as a way to get out into the community and keep active, the increase could affect millions of seniors who fill minimum wage positions. It will also positively affect all minimum wage workers in the lowest income brackets.

It doesn’t sound like something anyone would be opposed to, does it?

The fly in the ointment is that the bill pairs the increase in the minimum wage with estate tax exemptions. Democrats in the Senate are vowing to kill the bill, rather than allow what they consider a tax cut for the rich to go through. The bill contains exemptions on the estate tax of $5 million for individuals and $10 million for the estate of a couple. The current law provides for a 55% tax on estates worth more than $1 million starting in 2011.

Seniors who may be even now doing their estate planning will want to take note and research the bill and the effects it may have on the taxes their heirs will pay upon inheritance. As always, you should voice your opinion to your state representatives and senators.

You can find out who your state representatives and Senators are at this website. Email addresses are available for most of the members of Congress. Ground mail addresses and phone numbers are available for all members of Congress.

The U.S. Administration on Aging has announced a new program , “Money Follows the Person”. Under this initiative, states will be awarded grants for programs and services that allow more choices for seniors and persons with disabilities who need long term care but prefer to live in their own homes and communities.

According to HHS Secretary Mike Leavitt, “States will also get more for their money by giving the elderly and people with disabilities more control over how and where they get the Medicaid-funded long-term care services they need.”

Visit this site for more information on the New Freedom Initiative.

The fact is that 50% of all adults over 65 will require long term care of some kind in their lifetime. Understandably, individuals who have worked all their lives to build a nest egg for retirement and who want to see their children inherit the fruits of their labor, do not wish to see it all depleted to pay the high cost of their long term care.

Many falsely believe that Medicare will cover the cost of their care, but Medicare covers only short term care and not even all of that unless certain criteria are met. Myths abound in regards to Medicare and Medicaid and protecting your assets in the event that you or your spouse requires long term care.

There are steps you can take to protect a large amount of your assets but be aware that to qualify for Medicaid, you must disclose all financial transfers for a period of 3-5 years prior to application. There are penalties for illegal transfers. You can take out an insurance policy to cover some of the cost of long term care but most long term care insurance policies don’t cover the full cost of care. Many believe that setting up a “living trust” will secure their assets and make them untouchable but the truth is that these trusts don’t necessarily protect your assets from being paid out to your debtors.

Financial planning for elders is complicated and the earlier you start, the better. Consulting a financial planner who is well-versed in the laws of your state and the rules regarding Medicare and Medicaid is recommended. The time to take action to protect your assets is now.