If your parents get Social Security, the government has some good news and some bad news for them.

The good news? They'll see a significant increase in their checks next year. The bad news? For many older people, the growing costs of heating their homes, gas for their car, and grocery bills means that their expenses may well still outstrip whatever extra money they see in next year's checks.

The federal government announced the 2009 Cost of Living Adjustment (COLA) for Social Security recipients earlier this month and said that it will raise benefits by 5.8 percent for the 55 million people reciving Social Security. The adjustment is meant to make sure that benefits keep pace with inflation and cost of living increases. This means the estimated average check next year will be $1,153, up $63 from last year, according to an article in US News, which estimates that most couples, where both are receiving benefits, will get about $1,876 next year...  Read more

Scammers are finding more ways to take advantage of the current financial crisis -- and consumer advocates are warning people to be careful of new schemes designed to exploit people's fears about the economy.

According to a recent story in US News, "The economic uncertainty plaguing many Americans gives salespeople a new pitch to persuade consumers to hand over personal information and buy financial products that may not be in their best interest."

The new scams pegged to recent financial fears include:

• Phishing schemes: These usually involve e-mails appearing to be from a legitmate company or bank, requesting the recipient to click on a link or give up personal information like bank and credit card numbers, passwords, or Social Security numbers. According to US News, the new phishing scams involve e-mails appearing to come from a bank that has recently been acquired, asking the recipient to confirm personal information...  Read more

There's a new reason to be wary of phone calls from unfamiliar numbers in middle of the night: what the Better Business Bureau (BBB) is calling the "Grandparent Scam."

Hundreds of seniors -- from California to New Hampshire -- are filing complaints, reporting late-night phone calls from unfamiliar numbers. On the other end of the line is a younger-sounding voice claiming to be the recipient's favorite grandchild, relating a sad story about how he's in trouble in Canada and needs some cash immediately. The anti-fraud center in Canada says it has received about 350 complaints about the scam so far.

The usually-male caller says he's "your favorite grandchild," and lets his so-called grandparent fill in the name. The "grandchild" on the phone then says he's been involved in a car accident and needs thousands of dollars immediately to post bail or pay for the damages...  Read more

As the financial crisis shows no signs of slowing down and threats of recession loom, finance bloggers are addressing this challenging time by brainstorming ways to save money and free up cash.

If you or someone you're caring for is watching in horror as 401k and investment accounts shed their value, you may be pondering these same questions: How do I cut back on my spending to stretch the resources I still have? What are some ways to make money as savings dwindle? Finance and consumer sites like The Consumerist, MSN Money, Lifehacker, and FreeMoneyFinance, among many others, are answering these questions with lists of money-saving tips and ideas.

There's some overlap among the many articles, so here's a rundown of some of the best and most popular ideas:

Money Savers

• Balance your checkbook and review all credit card statements and medical bills for errors.
• Don't be afraid to ask for senior or...  Read more

During these rocky economic times, an increasing number of people are sacrificing their health to save money and cut back on spiraling health care costs, reports the Wall Street Journal.

When faced with skyrocketing premiums, deductibles, and prescription drug costs, more people are choosing to skip doctors visits and forego their prescription drugs, according to the article, which found that:

• 22 percent of people surveyed said that they were going to the doctor less often because of money woes, while in a different survey, 11 percent said they were cutting back on filling their prescriptions.
• The number of total prescriptions filled fell 0.5 percent in the first quarter and 1.97 percent in the second, compared with the same periods in 2007 -- the first negative quarters in at least a decade.
• Drugstores like Walgreens are reporting slower sales of prescription drugs.
• Health services company LabCorp...  Read more

With the relentless beat of bad financial news coming at us every day, it wouldn't be surprising if you started eyeing your mattress as the safest possible investment vehicle for these turbulent times.

But before you start slashing open that Sealy, take a deep breath and assess where your finances -- and those of your parents or other family members -- really are. For most people, now is probably not the best time to cash out. But in light of the market meltdown of the past few weeks, it does make sense to take a moment and scrutinize your family's financial situation and re-assess your investment strategies.

Newsweek this week asks "How Worried Should You Be?" According to the article, investors should:

• Keep their money safe in conservative, guaranteed investments like money market deposit accounts and government backed Treasury notes. Keep any money in bank accounts under FDIC insurance limits -- usually $100,000 -- to ensure that the money will remain secure in the event of a bank closure...  Read more

Medicare patients looking for help with the notoriously complex and confusing government health insurance program are often told to first call 1-800-Medicare for help. But according to a new congressional report, that may be the last place they should turn.

In response to complaints, Senator Gordon Smith, the ranking member of the Senate Special Committee on Aging, conduted a three year survey of the Medicare hotline. In response to 500 test calls, the call center gave "inadequate answers to test callers 90 percent of the time," according to a Dow Jones Newswires account of a hearing on the matter.

And things may be about to get even worse: In two months, call center volumes are expected to go through the roof when Medicare Part D open enrollment begins. About 34.5 million seniors are expected to call 1-800-Medicare next year.

Laying out some of the more egregious errors, Senator Smith...  Read more

Senior citizens are attractive targets for scammers, according to a new report, but there are some simple and easy things you can do to help keep them from being victimized.

Con artists go after older people for a few reasons, according to an article in Newsday. As a group, seniors tend to be more trusting of strangers and more likely to be sitting on large bank accounts -- while being less likely to report any crime because of their embarrassment over being victimized. In fact, while people older than 60 make up 15 percent of the U.S. population, they represent 30 percent of all fraud victims, according to the article, which attributed its statistics to the FBI.

The top scams to be on the lookout for, according to Newsday:

• Home foreclosure schemes (seniors in danger of losing their home are enticed with fraudulent offers of financial help but often end up signing their home away without their knowledge...  Read more

The tough economy is forcing more seniors than ever into bankruptcy, according to a new report, and leading many older people to seek out -- and find -- bargains and discounts available only to them.

In 1991, people 55 years old and up accounted for about 8% of bankruptcy filers, but by last year this group accounted for 22% of all bankruptcies, according to the report by the Consumer Bankruptcy Project.

"While the bankruptcy filing rate for those under 55 has fallen, it has soared for older Americans," according to a USA Today article. "The older the age group, the worse it got — people 65 and up became more than twice as likely to file during that period, and the filing rate for those 75 and older more than quadrupled."

Seniors -- especially those on a fixed income -- are being hit disproportionately hard by factors like the rising costs of consumer goods and gas...  Read more

The so-called "doughnut hole" coverage gap in Medicare Part D prescription drug coverage snared millions of seniors in 2007 -- and forced many to stop taking prescribed medications they would have had to pay for themselves.

In 2007, 3.4 million people, or 14 percent of all people enrolled in Medicare Part D, fell into the coverage gap, says a Kaiser Family Foundation study released last week.

According to Medicare Part D rules, enrollees pay a monthly premium, a deductible, and a co-payment of 25 percent of the total cost of their medication until they have spent $2,510 on prescription drugs. After that point -- known as the doughnut hole -- they must pay out-of-pocket for prescription drugs until they reach a "catastrophic" level of $4,050 total out-of-pocket spending. Then, Medicare coverage will kick in again. (Seniors can also purchase a private insurance plan to bridge the gap...  Read more

As Hurricane Fay hits shore, and storm warnings dominate the news, older homeowners in the affected regions may be asking themselves: What happens to my reverse mortgage if my home is damaged in the storm?

With hurricane season upon us -- and in the wake of the recent Southern California earthquake -- it's important for reverse mortgage holders to understand the implications of natural disasters and the damage they can cause.

Because the bank may very well end up owning the home in the event the mortgage holder dies, reverse mortgage lenders typically require that applicants agree to keep their home in good condition (along with a host of other requirements, including staying up to date on property taxes and homeowner's insurance) for the life of the loan.

In the event that the bank determines the house is damaged beyond repair -- even if the damage was caused by natural disaster -- the lender...  Read more

Francine Lipman teaches tax law at Chapman University, but when her mother was diagnosed with terminal cancer she realized that even with her extensive professional experience and training, she was in many ways ill-equipped to prepare herself and her family for the financial realities of her mother's death.

Lipman shares the real-world lessons she's learned about how to handle the financial implications of a parent's passing in a heart-felt and touching article originally published in 2006 in a legal journal, titled "Celebrating Life (Chai) and Taxes," which has since made its way around the blogosphere.

The most important lesson she learned? No matter how unpleasant it may seem, talk to your parents now about their wishes for the end of their life.

"As a CPA, attorney, tax professor, I clearly have an advantage regarding researching and understanding the many legal and tax issues presented for financial and estate planning...  Read more

Cash-strapped seniors have seemingly few options when it comes to getting their hands on more money. But now there may be one more possibility.

Similar in concept to reverse mortgages, LegacyLoans, soon to be offered through Legacy Funding Group, will allow older adults to take out a loan against their life insurance policy. They can use the proceeds of the loan for monthly expenses or simply to cover the costs of their life insurance premiums. When they die, the amount of the loan is deducted from the payout to their beneficiaries. There are other insurance companies, including New York Life, which are starting to offer similar products.

Seniors can already sell their life insurance policies, a transaction known as a "life settlement." For many people, this is a good way to use their existing policies to generate cash during their lifetime. The downside to life settlements is obviously...  Read more

The new mortgage bill includes provisions intended to make reverse mortgages more attractive to wary seniors. But is it a case of too little, too late?

This week President Bush signed legislation intended to address the foreclosure and mortgage mess that's devastated the housing market all year long. Included in the wide-ranging bill are dramatic overhauls to the rules governing reverse mortgages for seniors. What do these changes mean for your parents if they are considering a reverse mortgage?

To start with, under the new rules, your parents:

• Can qualify for much larger loans, depending on where they live. The previous loan limit of $417,000 has been increased to as much as $625,000 in high-cost areas.
• Can now use FHA-insured reverse mortgages to purchase second homes
• Should see reduced lenders' fees
• Are protected by new restrictions on lenders, which make it harder to cross-sell financial products...  Read more

Your parents assure you that their bank balance is in fine shape. But is it really true -- or are you worried they're actually just scraping by?

Even if your parents haven't shared the details of their financial situation, there can be tell-tale warning signs that they're feeling the need to cut back on their expenses. Home Instead Senior Care, an elder care provider, has compiled a list of signs that may indicate your parents are in need of financial help.

Here are the warning signs to look out for, according to Home Instead:

1. Is your seniors' home too warm in the summer and too cold in the winter?
2. Is the lawn not getting mowed and is the sidewalk not getting cleared in inclement weather?
3. Are they complaining about not being able to afford medications?
4. Are home repairs not getting made?
5. Is there a shortage of food in the house?
6. Are doctor’s appointments being skipped?
7. Are they staying home more and becoming isolated...  Read more