Tips from A to Z

Tips from A to Z

Advance Directives - Are You Prepared?

RMD Changes for 2009

Saving Money on Gas and Electric Bills

ADVANCE DIRECTIVES – ARE YOU PREPARED?


What is meant by advance directives?
Advance directives are documents in which you state your financial and health care choices and designate who will make these choices if you are unable to express your wishes. In Wisconsin, the documents available are: the Power of Attorney for Finance & Property, the Declaration to Physicians (Living Will), and the Power of Attorney for Health Care (POAHC). There is also a Christian version of the Power of Attorney for Health Care available. You do not need an attorney to complete these forms, but you may want to seek legal advice if you have particular circumstances or concerns.

Where are these documents available?
The Wisconsin documents can be downloaded from Wisconsin’s Dept. of Health and Family Services website: http://dhs.wisconsin.gov/forms/Advdirectives or by mail. Send a stamped, self-addressed business-size envelope to: Living Will/Power of Attorney, Division of Public Health, P. O. Box 2659, Madison, WI 53701-2659. Some hospitals and nursing homes may also have these forms available. Explanatory directions are included with each form.

The Christian version of the POAHC is available at: ChristianLifeResources.com.

Click on “Medical Directives” on the left side of the home page. You will be asked to select your state of residence from the drop-down menu. An explanatory supplement is available to download, as well as the actual document. Christian Life Resources may also be contacted at 1-800-729-9535.

What is the difference between a Living Will and the Power of Attorney for Health Care?

The living will is shorter, usually with 3 paragraphs outlining alternative levels of care. You will have a “yes-no” box to select for each one.

The power of attorney for health care (POAHC) gives some direction for medical care, but the main purpose of the document is to designate a health care agent, usually a family member or close friend, to make medical decisions for you, if you are unable to do so.

Advance directive documents for health care must be signed in the presence of two witnesses, 18 or older, who know you personally, but are not related to you “by blood, marriage or adoption”. Prohibited from witnessing are your doctors, their staff, employees of your treatment facility (except for a social worker or chaplain); your designated health care agent; those with a claim on your estate, and those who have direct financial responsibility for your health care. Signatures for the POAHC do not have to be notarized. All documents are revocable by you at any time, as long as you are mentally competent.

The main difference between the two documents is that a doctor will consult a piece of paper for health care direction (living will) if you are unable to express your wishes or will consult a trusted family member or friend if you have completed a POAHC.

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RMD CHANGES FOR 2009

In December, 2009 Congress passed a bill that has waivedRequired Minimum Distributions (RMD’s) for 2009 ; this also includes Beneficiary IRA’s. That means that anyone over 70.5 years will not have to take out the required minimum distribution in 2009. The legislation is only for one year, 2009. This information is for planning purposes for you to consider if you do or do not take a withdrawal from your retirement accounts.

What is a Required Minimum Distribution? ( using 2008 as the example)
Individuals over 70 ½ who have an IRA or Qualified Retirement Plan are required to withdraw their RMD by December 31, 2008.

How is the Required Minimum Distribution Calculated?
The RMD is calculated by dividing the Year-End Balance of the previous year (December 31, 2007) by the Uniform Lifetime Factor, which is obtained from a standardized IRS table. Please remember, you must take into consideration all of your retirement accounts held at all custodians. You do not need to take a distribution from each account; you can choose which account (s) to withdraw the total amount required.

The age that is used for the current year RMD calculation is the age that you will be as of December 31 of the current year.
In the year an individual turns 70 ½, he or she is allowed to delay the first required minimum distribution until April 1st of the following year. This is a one-time extension for the first RMD only. A second RMD would need to be withdrawn before December 31 of the following year.

Note: there is no Required Minimum Distribution for Roth IRA accounts.

Saving Money on Gas & Electric Bills

The attached spreadsheet (Click Here) shows the detail collected to track an individual home’s savings of electrical and natural gas costs. The savings for electrical is easy to calculate when a switch is made to the "time of day" rates the Electric Company offers. The savings were $282.14 for the first ten months of the changes. The natural gas was computed based on the average therms per degree-day for the winter months. This shows a reduction of about 20% to 24%. For the six-month heating period this is a savings of over $100.00. The cost to accomplish this was $100.00 for a thermostat and five timers. (Thermostat was a 5 day / 2 day and was on sale)

To accomplish these savings the following was implemented:

Electric – Change to the "time of day rate" billing with the Electric Company. The normal rate is about $0.075 / KWH (Kilowatt Hour). Time of day rates are about: off-peak = $0.025 / KWH, and on peak = $0.14 / KWH. In this case, the husband, wife and student were all at work or school during the day. The family leaves the house around 7:00 am. Therefore they chose to have the rates change to on-peak at 7:00 am and back to off-peak at 7:00 pm. You can choose 8:00 to 8:00, or 9:00 to 9:00, or 10:00 to 10:00. During the day you pay the on-peak rate of $0.14 / KWH and at night, weekends and holidays you are billed at the off-peak rate of $0.025 / KWH. If you go on this program and decide to get off you cannot go back on for a year.

To break-even you need to get to over 60% of your usage to be at off-peak. This is easier than you may think. The items in your house that use the most energy are anything that heats or cools or dehumidifies. This family bought timers for the two waterbeds, the refrigerator for soda and beer, and the two dehumidifiers in the basement. You do not want to put a timer on your refrigerator that stores food. The loss of food or potential for illness will offset any potential saving in energy costs. The timers are set to go on at 7:00 pm and off at 7:00 am on the items discussed earlier. Note to watch for the daylight savings time switch and if you lose power for any extended time. You will need to reset your timers. In addition to using timers, this family does not wash clothes or run the dishwasher until after 7:00 pm on weekdays. They save clothes washing for the weekends or after 7:00 pm on weekdays. The drying elements are heaters and will draw a lot of energy.

For heating and cooling the house, the family bought a time of day thermostat. For summer cooling they have it set to cool the house, starting at 7:00 pm, to 68 degrees. During the day the air conditioning is set to go on at 82 degrees. Because they are gone, the house is closed with no one going in and out. They reported that the temperature had not gone above 80 degrees this past summer. On weekends it was set at 72 degrees for the summer.

During the heating season they have the furnace set to heat to 70 degrees starting 40 minutes before they awake and to allow the house to cool down to 64 degrees until 30 minutes before they get home. They hold this until they go to bed and again allow the house to go down to 64 degrees while they sleep. If you get up in the middle of the night and sit with a good book for a while to "wind down" you will need a blanket. Again, on weekends and holidays they set the temperature to a point that they found comfortable, 70 degrees.

The thermostat is easily overridden should your schedule change for a period of time.

I hope you find this informative.

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