This newsletter is a special edition dedicated to an often overlooked and/or misunderstood planning tool. As we age, our financial planning needs naturally change and we have to anticipate roadblocks ahead that most ignore until it’s too late. When the subject of potential or unforeseen health problems arises, as human beings our natural and typical reaction is to deflect this dose of reality and convince ourselves “That won’t happen to me, it will happen to the other guy, but not me.” This is especially true for those who currently have a strong bill of health since it’s hard to imagine such a drastic change in your health when you are presently in good shape.
Regardless of your current health status, too many Americans leave out a crucial planning component when they are structuring or contemplating a retirement plan. You may have a sizable IRA, 401(k), pension plan and expect to collect Social Security benefits as well, but what happens if suddenly you fall ill and are no longer able to care for yourself? What happens if you can no longer afford the proper medical care? What happens if you have nearly drained your IRA, 401(K) and pension funds? What happens if you need to go into a nursing home or other care facility? Are you prepared to face such challenges?
Protect, Preserve and Defend Your Health
We protect ourselves from costs associated with car accidents, flood and fire damage to our homes, and we have individual healthcare coverage to help prevent serious illness. Many of us have life insurance to plan for the future and to provide tax-free benefits to our families when we are gone. That’s great and a normal part of our lives, but sometimes it’s just not enough. As we have evolved as a society, so have our financial, retirement and health planning tools.
The good news is people are living longer. The bad news is people are living longer. Unfortunately, you can’t depend on a hope that “it will happen to the other guy.” Everyone should make an effort to plan for the worst while they are still in a position to do something about it. Planning for long-term care is relatively simple these days but there are a few particular solutions that every American should know about. We always talk about Protect, Preserve and Defend your retirement accounts from Uncle Sam while leaving a legacy to your loved ones. What if there was a way to incorporate that mantra into a long-term care solution? Well, there is! Ask your retirement distribution expert about the new options available to you.
*Important Note: Everyone has a different situation and available solutions vary by state so it is important to clarify that this issue is intended for educational and informational purposes only – it is not intended to be a substitute for personal professional advice.
Key Advantages
- Long-Term Healthcare Expenses Are Covered
- Joint and Single Options
- Almost Any Asset May Be Used as Funding Source
- Guaranteed Premiums
- Optional Riders: Lifetime Benefits
- Return of Premium Feature (all years)
- Accelerated Death Benefit (for qualifying expenses)
- Leave a Legacy for Heirs (unused death benefit)
* Features and options may vary – it is imperative to discuss all features and options available to you with your personal advisors.
Avoid Irreversible Financial Consequences
In the past, a lot of people shunned long-term care (LTC) planning because of the costs associated with traditional LTC. Statistically, only about 3% of American adults have LTC coverage. Additionally, about 70% of Americans turning 65 will need some type of LTC care in their lifetime so you or a loved one will likely face a long-term care event. The problem is, this type of event can spell financial disaster and have irreversible consequences. There is, however, a light at the end of this dark LTC tunnel…
New solutions that offer better options than traditional LTC insurance are now available. By incorporating asset-based options into your planning strategy, you can help avoid irreversible financial consequences of a long-term care event!
What Is The Real Cost of Aging?
It’s no secret that healthcare costs have risen dramatically over the past several decades. Unfortunately, it’s nearly impossible to know how much you need to put aside to cover your average healthcare costs, let alone guess how much you may need to cover long-term healthcare costs should your health take a turn for the worse. So what is the average American supposed to do and how can they effectively plan for such obstacles? Traditionally, standard long-term care insurance was really the only viable option but it was very expensive. However, with new LTC solutions, many Americans can now have peace of mind when it comes to long-term care planning.
How much can you expect to pay on average for nursing home care in your state? Below is a chart showing the medial annual costs for nursing home care in select states. The amount for each state is approximate and is based on a 365 day stay with a semi-private room accommodation:
Healthcare
Medicare and Medicaid were not designed to cover LTC expenses. As stated earlier, people are living longer and maladies such as Alzheimer’s and dementia are rapidly increasing. Many of us have personal experience with loved ones who have suffered with such age related illnesses. There has been a tremendous spike in life expectancy in America over the last 50 years, thus the need for access to better long-term care solutions has become a necessity. What makes the new LTC solutions different? Unlike programs such as Medicare and Medicaid, new LTC solutions don’t require you to spend down all your assets first or rob your savings accounts until you are essentially penniless.
TYPES OF SERVICES YOU MAY NEED
- Hospice
- Nursing Home
- Assisted Living
- Home Health Care
- Adult Day Care
- Caregiver Training
- Supportive Equipment
DAILY ACTIVITIES TYPICALLY IMPAIRED BY HEALTH PROBLEMS
- Eating
- Bathing
- Dressing
- General Mobility
- Restroom Use
Death Benefits
We all like the idea of a tax-free retirement, but what about tax-free death benefits? Generally, your death benefits under this type of new hybrid policy will be tax-free to beneficiaries.
What If You Decide You Don’t Like the Strategy?
Buyer’s remorse is a common affliction that doesn’t often end on a positive note. However, with these new planning options, if you decide you don’t like it anymore or just flat out change your mind in the first year, you are not stuck…within the first year you can get your entire premium returned to you.
Most Important… Ask Questions!
Not sure you have your long-term care needs adequately covered? Your personal retirement distribution specialist, CPA, or other professional advisor can assist and help you determine what is right for you and your family to make sure you are prepared and protected. Not all long-term care solutions are appropriate for every individual so it is important that you meet with your professional advisors for an assessment to ensure you have the proper strategy for your situation. Don’t take a chance with your long-term healthcare needs…prevention is the best medicine after all. Call for an appointment today to preserve, protect and defend your health!
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