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Monday, January 27, 2020

Should You Start Medicare If You Work Past 65?

Prepare for working beyond age 65 by knowing the ins and outs of Medicare coverage … and what you need to do.

You may have decided that working a year or two beyond 65 will give you an extra cushion in retirement. Maybe you love your job and can’t imagine quitting just yet, or you need to work as long as you can to make ends meet. It could be that you are on your spouse’s benefits and your spouse is still working, and you are turning 65. No matter what your situation is, you need to get health insurance right.

Medicare is somewhat complicated, and the penalty for messing up can be onerous. Worse, it lasts the rest of your life. So it is worth taking some time to figure out what you should do about health insurance when you are working past the age — 65 — when Medicare usually starts. Let’s break it down to some simple answers.

How Many Employees

Whether your employer or your spouse’s employer is sponsoring your health insurance, the first thing you need to find out is how many employees the company providing health insurance has. Is it less than 20, or 20 or more? If you are not sure, ask for clarification because everything else hinges on this number.

Here is a checklist from Fidelity to help you navigate Medicare and employer-sponsored health-care benefits after 65.

  • Read the employer health care benefits information specifically for employees or spouses/partners who are nearing age 65.
  • Talk to your company’s human resources or benefits group to confirm employment status and access to health insurance. 
  • Explore the website and order a Medicare and You pamphlet for the latest information.
  • If you are already receiving Social Security, make sure to decline Part B when you get your Medicare card.
  • Sign up for Medicare two or three months before you retire or lose employer coverage.
  • If you need help, you can talk to your local State Health Insurance Technical Assistance Program (SHIP) representative. Find information here

20 or More Employees

If the employer has at least 20 employees:

As long as you (or your spouse) actively work for and receive benefits from this employer, you can put off enrolling in Medicare until the work or the coverage stops. At that time, you’ll have up to eight months to enroll in Medicare without triggering a penalty. Be aware that “actively working” for this employer doesn’t apply if coverage comes from retiree benefits or COBRA. You also can’t be using retiree benefits from a previous employer.

Caveat: Don’t wait eight months while you go without any health insurance. Sign up for Medicare a month or two before employment ends to make sure Medicare will start the day the employer’s insurance stops covering you.

Legally, an employer with at least 20 employees must offer you (and your spouse) the same benefits younger employees get. That means you can decide to accept the employer plan and delay Medicare, decline the employer plan and rely only on Medicare, or get employer health coverage and Medicare at the same time.

Tip: It can pay to sign up for Medicare Part A only even if you are keeping employer coverage. Part A (for hospitalizations) is free and remains your secondary insurance to pay whatever an employer’s plan does not. However, if you contribute to a health savings account (HSA) and you would like to continue, do not sign up for any part of Medicare since that will make you ineligible for an HSA.

Know that there are consequences to getting an employer health plan and Medicare at the same time. The employer health care is always primary; Medicare will only pay for services not already covered by the employer insurance. In that case, you would be paying Medicare premiums for little or no benefit. Also, signing up for Part B Medicare coverage when you are covered through an employer could mean you will have to give up your right to buy supplemental coverage known as Medigap after employment ends. You will lose protections in Medigap ensuring coverage at a set premium regardless of your current health or preexisting conditions.

Tip: If you sign up for Social Security benefits before you turn 65, you are automatically enrolled in Medicare Parts A and B. At the least, you’ll be paying for two plans. Contact the Social Security Administration by phone or at your local office to let them know you don’t want Part B to kick in now (nor Part A if you’re funding an HSA).

Less Than 20 Employees

Another set of rules applies if the employer providing health insurance benefits has 19 or fewer employees:

An employer makes health insurance decisions for you. If the employer says you must enroll in Medicare, it will be primary and your work plan will be secondary. In this case, it’s critical to sign up for Medicare at 65 or you’ll essentially be left without any coverage. If you are confused about an employer directive, ask for a decision in writing.

Tip: It is also critical to sign up for Medicare on time (from three months before your birthday month to three months after) or get hit with a painful penalty. There’s a 10% additional cost added to Part B premiums for every year you go without coverage once you are eligible.

In this case, enrolling in Part B will not impact your ability to buy Medigap when employment ends. With Medicare as your primary insurance, your right to buy Medigap with full protections lasts for 63 days after employer coverage ends.

Click below for the other articles in the January 2020 Senior Spirit


Blog posting provided by Society of Certified Senior Advisors

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Friday, January 24, 2020

How Returning to Work Impacts Social Security Benefits

The ins and outs of working while receiving Social Security, including 2020’s new higher limits on how much you can make without getting penalized.

Retired at last! You start Social Security payments, glad to finally be free of the 9-to-5 routine. But then life changes, and you realize you need more income than your monthly government check provides. Or you surprise yourself by becoming bored, and take a part-time job to have a little something to do. Maybe you are managing just fine, but an interesting offer comes up for consulting, or employment at the company of your dreams. These and other scenarios may incentivize you to work while receiving Social Security benefits. Here is what you should know about potential reductions to benefits while you are earning income.

Age is Key

If you have already reached full retirement age (FRA) when you claim benefits and/or return to work, then you can earn any amount without penalty. Check the chart below for your FRA.

Year of BirthFull Retirement Age
1943 to 195466
195566 and 2 months
195666 and 4 months
195766 and 6 months
195866 and 8 months
195966 and 10 months
1960 or later67

Data from Social Security Administration

If you return to work before reaching your FRA, $1 in benefits will be withheld for every $2 you earn above the annual limit ($18,240 for 2020). For example, if you retire early and go back to work before your full retirement age and earn a salary of $30,000, you’ll be $11,760 over the annual limit. Therefore, your Social Security benefits will be reduced by $5,880.

However, if you return to work the year you reach FRA, the limit rises to $48,600. In addition, only the earnings you make before the month you reach FRA are counted. Sounds complicated, but a couple of examples make it easier to understand:

You work the entire year you reach full retirement age in June. From January 31 to May 1, you earned $15,000. That’s under the limit, so your benefits for the year remain the same. 

You work the entire year you reach full retirement age in June. From January 31 to May 1, you earned $50,000. You earned $1,400 over the limit, so your Social Security is reduced by $700.

It is worthwhile to note that your Social Security check reductions will all be taken at the beginning of the year, and not averaged out over the year. If your benefit is $1,000 a month, say, and $3,500 of it will be withheld, then you will receive no check at all for the first four months, and the final $500 you are owed will be sent in December. For a more complete explanation of how earnings limits work, see the Social Security Administration’s (SSA’s) How We Deduct Earnings From Benefits

Reduction is Temporary

The amount of Social Security benefits withheld is temporary. Once you hit FRA, your benefit amount is recalculated and assigns you credit for those months you did not get a benefit because of earnings. However, it does not get repaid in one lump sum. Check this article for a complete explanation.

Another point to keep in mind is that you must keep paying into Social Security for as long as you continue to work. This may be in your favor, since benefits are calculated using your highest 35 years of income. Adding working years will replace any when you didn’t work at all, or when you earned less money. 

If you want to check how much working will reduce your annual benefits, use the SSA’s Retirement Earnings Test Calculator. To get the long version of this article straight from the horse’s mouth, see the SSA’s publication about How Work Affects Your Benefits


You may wonder if returning to work will change how your Social Security benefits are taxed. It all depends on your MAGI, or modified adjusted gross income. As that increases above a certain level, a larger percentage of your benefits may be subject to tax, up to a maximum of 85%. 

As far as state taxes are concerned, only thirteen states collect income tax on Social Security benefits. That number can be misleading. For example, although Colorado will tax Social Security income, the state exempts $20,000 in annual retirement income 

As you consider the effects of taxes on returning to work, it is wise to consult a financial advisor or other trusted financial professional for guidance. 

Many retirees have found a happy medium between leisure and work. You can certainly be one of them, but do not go back to work with your eyes closed to all of the consequences on your wallet. Check out the tools and publications available from the SSA, and consult a professional for advice on making Social Security work in your favor. 

Click below for the other articles in the January 2020 Senior Spirit


Blog posting provided by Society of Certified Senior Advisors

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Tuesday, January 21, 2020

Older Adults Outnumber Young Children

There are more people aged 65 and over in the U.S. than under 5 for the first time ever. Here is what that could mean.

People are living longer and having fewer children in developed countries, presenting new challenges and opportunities around the globe. In fact, there will be more older adults than children in our country in less than two decades. The cause is largely twofold: the large contingent of baby boomers is graying while fertility rates have stagnated or headed downward. And the U.S. is not alone.

In Japan, more than 1 in 4 people are 65 or older and the overall population is declining. While Japan has the world’s oldest population, Western European countries, including Germany, Italy, France and Spain, are not far behind. Eastern European countries are even closer to having declining populations, with many expected to shrink in only a few short years. All world regions have fertility rates at or below replacement level, with the exception of Africa.

Why Are Populations Shrinking?

Generally, women in developed nations are having fewer babies. International migration and slightly higher fertility rates have allowed the U.S. to remain younger, but not for long. Immigration is slowing and Americans are having fewer babies. Add a longer life expectancy to the mix and you can see why the country is aging faster. 

Another factor pushing the population to skew older is the massive generation of post-war children who are aging into their 60s and beyond. The baby boomers pumped up the number of children when they were young, swelled the workforce as they entered adulthood, and are having a corollary effect on retirees as 10,000 per day turn 65. By 2030, every boomer will have crossed this age-limit Rubicon and older Americans will make up 21 percent of the population, versus 15 percent today. 

This has huge implications for both older adults and the aging industry. Social programs will be impacted as the 3.5 working adults for every person eligible for Social Security today dwindles to 2.5 working adults by 2060. Additionally, health care is bound to be affected along with the caregiving spectrum, from aging in place to assisted living and hospice. Supporting the elderly is more expensive than caring for children, and eldercare is a major worry. 

Japan Provides a Model

As the oldest society on earth, Japan’s government has had to make radical changes to accommodate its singular population. In 2000, the country’s leaders introduced extremely generous long-term care insurance to supplement its national pension plan. There is also an emphasis on cutting-edge medical technologies with the hope of slashing future health care costs while energizing a new industry. Women are being encouraged to enter or re-enter the workforce, while many adults are working into their 80s.

Businesses in Japan have looked for opportunity in the boom of older adults. One convenience chain—Lawson—began putting in a “seniors’ salon” featuring blood pressure monitors, information about local health care services and nursing centers, and on-staff social workers. There’s another special section in the store for adult diapers, wipes for bathing the elderly, and detergent that is particularly good at cleaning up urine. And staff can deliver heavy items such as water or bags of rice. 

“This is Japan’s national issue,” says Lawson spokesperson Ming Li, as he points to TV dinners made for older adults. 

Lawson’s structure has also had to change. The maximum age limit for franchisees was raised, and the company is trying out lower part-time hours with limited tasks for older workers who can only put in a couple of hours per day but still want a job.

On the caregiving front, the country has been ahead of most in organizing a private transit network to bring patients to medical appointments and implementing electronic health records. One hospital issues ID cards with digital information containing the patient’s name, medical history, allergies and illnesses. Emergency responders or doctors can quickly scan these IDs. 

Another way the country leads is with robotics. Paro the robotic seal has been proven to reduce anxiety, stress, depression, and even the pain of chemotherapy sessions. It is particularly useful to calm dementia patients, according to Takanori Shibata, chief senior research scientist at Tsukuba’s National Institute of Advanced Industrial Science and Technology. 

The humanoid Twenty-One robot, developed at Tokyo’s Waseda University, is able to help older adults get out of bed, retrieve jars from the refrigerator and deliver trays of food. But with a $215,000 price tag, it’s not in wide use. 

Market Reflections

Worldwide, economists worry that an aging population will open the door to depressed productivity, lower labor-force participation and stagnant inflation. Indirect effects can include a reduction in home ownership. Investors worry whether the new global economy will be able to generate an adequate amount of productivity and growth to make up for the demographic trends. Still, more hopeful opinions persist.

There is “no negative relationship between population aging and slower growth of gross domestic product per capita,” according to Daron Acemoglu, a Massachusetts Institute of Technology economist. His research in 2017 found that rapidly aging countries have been some of the fastest growers in recent decades, likely due to a quicker adoption of technologies and automation to replace lost labor. 

Government and private institutions will have to work in tandem for optimal results over the coming years. Health care will be forced to evolve, and businesses will need to look for opportunities to cater to the booming market of older adults. And perhaps instead of a chicken in every pot, the future will see a seal in every home as the world adapts to grayer heads. 

Click below for the other articles in the January 2020 Senior Spirit


Blog posting provided by Society of Certified Senior Advisors

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Friday, January 17, 2020

An Apple for Your Health

Tech titan Apple is using its ecosystem to drive multiple projects affecting personal health care now and into the future.

If you ask me what Apple’s greatest contribution to humankind was, it is in the health care arena.
Tim Cook, Apple CEO speaking to Japan’s Nikkei news service in December 2019:

If you thought the Apple Watch was the company’s major foray into the health care space, you’d have underestimated its reach and drive. Yes, the smartwatch is continuing to make inroads, particularly in the over-65 category. In 2019, Apple partnered with Medicare Advantage insurer Devoted Health to subsidize the cost of the device for its 4,000 members. While that number may seem small, it spurred “several” other Medicare Advantage plan carriers to consider the benefit. Consider that the Kaiser Family Foundation reports that the Medicare Advantage market was 20 million in 2018, and expected to rise. Apple has its eye on the health care market, with a basket of initiatives underway that bank on the company’s reputation for privacy and ability to merge software and hardware.

When you look at most of the solutions, whether it’s devices, or things coming up out of Big Pharma, first and foremost, they are done to get the reimbursement [from an insurance provider]. Not thinking about what helps the patient. So if you don’t care about reimbursement, which we have the privilege of doing, that may even make the smartphone market look small.
- Tim Cook, Apple CEO

Google Enters Medicare Advantage 

Apple isn’t the only tech giant to compete in the health care space. Not only did Google parent Alphabet recently acquire fitness tracker business Fitbit, but the company is making a $375 million bet of its own on private Medicare with a stake in Oscar Health. Currently an actor in the individual insurance business under the Affordable Care Act, Oscar will use the financial infusion to jumpstart its entry into Medicare Advantage, which has a projected user base of 38 million by the end of 2025, or half of Medicare enrollees.

Apple’s integration of health care into its wearables, services and app are fairly well known, at least by owners of iOS (the company’s operating system) products. The Health app comes installed on new phones and tracks number of steps and flights of stairs on a calendar, easy metrics to entice regular use. It is also an entry point for the second page, which follows various health metrics such as sleep, nutrition and mindfulness, suggesting apps that can monitor each and provide results. Users are even directed to apps that can monitor glucose levels and inhaler usage. Consumers are able to download, aggregate, view and share this information with more than 120 health care institutions, and Apple is working with startup Health Gorilla to enable doctors to order and quantify lab test data.


Back in 2015, Apple began offering ResearchKit to help medical researchers conduct studies with the iPhone. Instead of having to locate participants and entice them with payments, researchers could recruit by asking users to opt in, creating larger groups from geographically diverse areas. The Apple Heart Study, for example, has enrolled more than 400,000 participants from across the U.S. in a single year. The only apparent downside is that iPhone users tend to be more affluent than the population at large.

For scientists, ResearchKit offers customizable templates for introducing a study, clarifying who is eligible, and obtaining consent and access to data. Participants can see exactly what the study entails via videos, simple consent forms and quizzes. In addition, enrollees can choose to donate their data for future research. More than 75% on app mPower do, allowing open sourcing. Currently, researchers are involved in the Apple Hearing Health Study, the Apple Heart and Movement Study, and Apple Women’s Health Study, among others.

Participants don’t have to travel to a clinic to submit data, but instead use sensors in the iPhone (or connect it to the Apple Watch, an inhaler, etc.) to give frequent readouts. It is even possible to record data during a seizure or asthma attack, and information such as where it occurred (in a park, for example) can be factored in. Facial recognition and artificial intelligence (AI) are pairing for early autism detection and other tests. Audio transmissions are another area of innovation in speech health, and assist in speech to text translation.


Launched in 2016, CareKit lets institutions and people develop apps to monitor patients in real time by using sensors and tools available in the iPhone. Hospitals can check remotely on discharged patients. The progression of chronic diseases can be monitored and managed. CareKit provides one source that a variety of caregivers (doctors, physicians, etc.) can use. It is also open source, with several startups (Glow, Iodine, One Drop and others) piggybacking on the platform. And the app simplifies outsourcing, allowing hospitals to bundle services such as transportation around a single event or disease.

Apple’s Edge

The Apple user base, more than 85.5 million iPhone owners over the age of 13 in 2016, is powerful, and the company has direct access to each user. Apple also has leverage with players in the health care space. The company can act as an intermediary with startups using the Apple platform and other, more established entities. As health care becomes more proactive, people look to trusted brands with name recognition for storing their health documents. Although a lot of work remains, Apple has begun enlisting partners to create a data system that will allow users to collect information on a universal basis while sharing it selectively.

Click below for the other articles in the January 2020 Senior Spirit

Health – Should You Start Medicare If You Work Past 65?


Blog posting provided by Society of Certified Senior Advisors

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Tuesday, January 14, 2020

The Secure Act is Law

New rules around retirement plans affect workers, retirees and the small business community.

Usually, we try and make Coffee Break on the lighter side, but a new law will affect so many older adults we decided it was important to make sure readers were aware of it.

The new year starts off with a bang for retirement savers as the SECURE (Setting Every Community Up for Retirement Enhancement) Act goes into effect on the first day of January. The bill increases access to tax-advantaged accounts, nudges back the age for required minimum distributions (RMDs) and includes other changes to help keep Americans from outliving their assets.

Employer Plans Affect Workers

Under the SECURE Act, employers are no longer required to share common characteristics to pool retirement plans, making it easier to enjoy the economy of scale. Part-time workers who log at least 1,000 hours in a year or 500 hours in three consecutive years will be eligible for employer-sponsored retirement plans.

Studies have shown that auto-enrollment significantly increases plan participation. The SECURE Act encourages employers to use automatic enrollment by offering a tax credit to offset the cost of a 401(k) or SIMPLE IRA (Individual Retirement Account), in addition to a start-up credit. Some states have already stepped into the arena, creating their own automatic-IRA plans.

“This is probably the biggest thing that could improve the retirement outlook for people,” according to Alicia Munnell, director of the Center for Retirement Research at Boston College.

Retired Minimum Distribution Age Rises

The bill moves out the age when traditional retirement account holders must begin taking distributions. The change adjusts the age from 70.5, a number which endured from life expectancy tables in the early 60s, to 72. Some may take advantage of the change to work longer, while others can use it to increase Roth conversions or for other tax implications.

“Pushing back RMDs will help people make their money last just a little bit longer, especially since more of them need to work later,” says David Rae, a financial planner in Los Angeles.

Stretch IRA is Gone

Those planning to leave money in an IRA account to a non-spouse heir may need to rethink their options. Previously, many heirs could take the money out over their lifetime, using a distribution based on life expectancy and age. But now, Uncle Sam is requiring the complete withdrawal of the money within a ten-year span after the death of the account holder. Use this calculator to see how the change could affect someone who is not a spouse when inheriting an IRA. The change is expected to put an estimated $15.7 billion into IRS coffers.

Annuities Increase

The insurance industry lobbied hard to encourage employers to offer annuities in 401(k) plans, and the new rules remove legal liability from the employer. Annuities provide guaranteed income over the course of retirement, providing a steady stream of money as pensions have largely dried up. However, they are complex investment products with hefty fees, and investors should make sure they understand exactly what they are signing up for if they choose an annuity.

Other Provisions

The bill also now allows the use of tax-advantaged 529 accounts to repay qualified student loans, up to $10,000 per year. The cost of adopting a child can be defrayed with up to $5,000 from a 401(k) account, penalty-free.

While the provisions contained in the bill are not earth-shattering, they will make a difference for many. There are enough changes that it is likely that something in the bill will affect you or someone you know. Talk over any changes and make sure your financial plan accommodates the new rules.

Click below for the other articles in the January 2020 Senior Spirit

Health – Should You Start Medicare If You Work Past 65?


Blog posting provided by Society of Certified Senior Advisors

Thursday, January 9, 2020

Famous and 65

Look who's turning 65 this month

January 18 - Kevin Costner, Actor, Director, Country Singer

“I’ve lived quite a colorful life,” Kevin Costner explained in 2008, after demurring over a run for political office. The blue-eyed actor with the charmingly tilted smile was born in southern California. His father moved around a lot for work when his youngest son was in high school, a period when Costner “lost a lot of confidence.” But after becoming interested in acting his last year in college, he worked jobs on fishing boats, driving a truck and giving tours of the Hollywood homes of stars while taking lessons and auditioning for roles.

After several bit parts, he was cast in The Big Chill as Alex, the friend whose funeral serves as the setting. However, these flashback scenes were left on the floor after the final cut and Costner never appeared in the iconic film. Starring roles came his way in 1987 in The Untouchables and No Way Out, followed in succeeding years by Bill Durham and Field of Dreams. Perhaps his biggest hit was Dances with Wolves, which Costner directed and starred in. The movie won seven Academy Awards, including Best Picture and Best Director.

Costner is married to his second wife and has a ranch in Aspen, Colorado. His country rock band Kevin Costner & Modern West toured worldwide in 2007 and plays internationally. Costner has a variety of charitable and business interests, including Tatanka: The Story of the Bison in South Dakota, where tourists can learn the story of westward expansion.

January 26 - Eddie Van Halen, Rock Guitarist

“We came here with approximately $50 and a piano, and we didn’t speak the language. Now look where we are. If that’s not the American dream, what is?” Born in Amsterdam, Eddie Van Halen’s family moved to Pasadena, California in 1962 and became U.S. citizens. Although voted No. 1 in a 2012 Guitar World poll to find “The Greatest Guitarist of All Time,” Van Halen swears he never really learned how to read music.

Starting with four grade lunch room performances for his classmates, Van Halen and his brother, Alex, moved to paying gigs when they formed a band in 1972 that two years later became the enduring hard rock group Van Halen. The band’s first album became one of the most lucrative debuts ever after getting accolades in both heavy metal and hard rock circles. Eddie Van Halen popularized the solo technique he called “tapping,” or using both hands on the guitar neck.

After a long marriage to child star Valerie Bertinelli, she filed for divorce in 2005. The couple has a son, Wolfgang. Van Halen remarried in 2009 with Bertinelli in attendance and his son filling the role of best man.

January 28 - Nicolas Sarkozy, 23rd President of France

"What made me who I am now is the sum of all the humiliations suffered during childhood,” Sarkozy has said of being shorter and less wealthy than his classmates. Born to a Hungarian father and French/Greek mother, Sarkozy was influenced by his Gaullist paternal grandfather. After building an advertising agency and becoming wealthy, his mostly absentee father divorced his mother in 1959.

Reportedly a mediocre student through high school, Sarkozy found his footing in college, graduating with a degree in business law and was very active in the right-wing political organization. A skilled speaker who can turn on the charm, Sarkozy rose through the political ranks as a mayor, then Minister of the Budget, Minister of the Interior and finally Minister of Finances. After leading his party for three years, he was elected President of France in 2007.

During his tenure, Sarkozy faced the European sovereign debt crisis, the Russo-Georgian War (he negotiated a ceasefire) and the Arab Spring. An innovator, he initiated reform in both universities and the pension system. However, he was defeated in 2012 and largely retired from public life. The politician married three times, including current spouse and singer-songwriter Carla Bruni.

January 31 - Virginia Ruzici, Tennis Star

When you think of Romanian athletes, gymnasts likely spring to mind. But over a 12-year career that began in 1975, tennis player Virginia Ruzici made quite a name for herself and went head-to-head with superstar Chris Evert.

Ruzici used a powerful forehand to garner 12 career singles titles, including the 1978 French Open. But she was a better sportsman than many, as evidenced by her actions during a match with Evonne Goolagong Cawley at Wimbledon in 1978. The Australian was playing in spite of an ankle injury, and when Goolagong collapsed on the court during a quarterfinal match with Ruzici, her husband spontaneously jumped down to the court to check on his ailing wife, causing a technical default. When Goolagong recovered, however, Ruzici allowed the match to continue, costing her the game.

Ruzici is rumored to have had a hand in starting American tennis legends Venus and Serena Williams on their career paths. The sisters’ father was watching a match in Salt Lake City where he was inspired by Ruzici’s victory and impressed by the prize money, leading him to concentrate on teaching his daughters to play the game.

Click below for the other articles in the January 2020 Senior Spirit