Americans are focused on the wrong retirement risks

Center for Retirement Research at Boston College
Center for Retirement Research at Boston College

Center for Retirement Research at Boston College

A study from the Center for Retirement Research at Boston College found that Americans cite market volatility as the top retirement risk, while longevity and health care costs actually present bigger risks. The study concluded that Americans need more education about retirement risks, as well as a source of secure income and long-term care planning.  To view the article, click on the link below and then on “take me to the story”.

Research: Americans focused on wrong retirement risks

Has your planner addressed the risk of spending an extra $50,000 to $90,000 every year for 3-5 years when your health changes?  If not, or even if your planner did, remember that they specialize in investing money.  I am an expert in planning for and dealing with Long-Term Care.  Investigate with an expert and get the best advice and solutions available.  Visit my website at www.TheLongTermCareGuy.com or call (920) 884-3030 to schedule your time to investigate

It’s the Holidays, Let’s Talk

Rome's Whiteboard

How long has it been since you have seen all of the family?  How are they doing?  Perhaps not as well as last year?  Perhaps it’s time to talk.

It’s the holidays, this is the time of year when many families realize a family member is not doing as well as s(he) has in the past, and may need some help.  Perhaps s(he) just need help with lawn care or snow removal.  It might be the house is not as neat as it always was, or perhaps bills and paperwork are being neglected.  Maybe it’s time to talk.

It’s the Holidays, many families realize a family member may need some help

This is not something we look forward to, and it seems the job more often than not falls to the women in the family.  Women seem to be overwhelmingly tasked with caregiving.  Employers know that the holidays are when female employees often request leave to deal with family issues, making caregiving a workplace issue as well.  Wages are sacrificed and productivity falls; seasonal demands may exacerbate the problem.  An article in the AARP publication estimated that in 2009, there were 66 million unpaid caregivers in the US, and the number is growing.  Unpaid caregivers average 20 hours of caregiving a week.

This caregiving is not without cost.  Caregiving takes a toll on the health of caregivers which lingers long after the death of the family member cared for.  It also costs real money.  In addition to the career and income sacrifices, many caregivers contribute significant dollars while assisting loved ones.

By having a Long-Term Care (LTC) discussion, plans can be made to share the responsibilities.   Other family members may discover they can contribute time and resources to help.  Perhaps professional caregiving either at home or in a facility is required and planning – even at the last minute – can provide solutions, rather than simply spending available money and hoping to qualify for government assistance.  Once financing strategies are discovered, more planning options may become available.

It is the Holidays, family time, perhaps it’s time to talk

The holidays can be an appropriate time to discuss these issues because the family member’s needs might be more apparent.  Any time of year can be a good time to consider how the care you may someday need will impact your family as well.  Are you prepared to handle your long-term care needs?  If you might pay for care, where will the money come from?  What will be left for family after your care needs are over?  Perhaps you might investigate LTC insurance while you are still healthy so that funding is not an issue when you need care.  LTC insurance pays for care in your home, day care facilities, assisted living facilities commonly called CBRF’s or RCAC’s, and traditional nursing homes.  Pennies on the dollar now can save hundreds of thousands of dollars later.

Have you ever wondered….

Do you have questions about the cost of long term care?
Do you have questions about the cost of long term care?

Do you have questions about the cost of long term care?

Do you have questions about the cost of long term care?

Are your clients confused about the many options, how to choose coverage, or if it’s necessary for them?

I’m Romeo Raabe LUTCF, LTCP and I’m known as The Long Term Care Guy–in fact, my website is www.TheLongTermCareGuy.com and I work exclusively on Long Term Care (LTC) issues.  Some examples  include how to get the most from LTC insurance, how to start a claim, what to do if care is needed and there is no insurance—and much more!

I also offer insurance for LTC and have options most financial professionals are not even aware of.  For example, this week I put coverage in place for a couple ages 87 and 84 for less than $90/month a piece.

Even if someone is in care – even if already on Medicaid – I may still be able to help.  If you or your clients have questions, feel free to call me at (920) 884-3030.  I am here to help anyone dealing with or concerned about LTC.

Contact ROMEO RAABE about the cost of long term care!

PS: There can be huge differences in LTC insurance policies—I can help you understand the differences, and probably even set you up with other strategies most other advisors don’t know about!

Why Can’t I Spend my Money on Fun?

Why Can't I Spend
 my Money on Fun?
Why Can't I Spend
 my Money on Fun?

Often, retired people are afraid to spend money on fun or travel because they fear the catastrophic costs!

A recent Wall Street Journal cartoon featured a gentleman visiting his financial planner.  In the cartoon, he asks the planner, “Why can’t I spend some of my money on fun now?”

Often, retired people are afraid to spend money on fun or travel because they fear the catastrophic costs they would face if one of them needs long term care (LTC). This can be a real concern, because the U.S. Department of Health and Human Services says that 70% of people who reach age 65 will need some long-term care.  The great majority of us cannot afford it for long if we’re paying out of pocket.

Many people assume the insurance for LTC is prohibitively expensive. This is because they never investigated what the costs actually would be for them. I can tell you with near certainty that you need less of it than you imagine.  When you finally need care, your lifestyle will change considerably.  If you cannot drive there will be fewer vehicles, boats, toys, and less travel, golf, dining out, and so on.  The money spent on fun (which you SHOULD do while healthy) can be redirected towards the costs of LTC.

Most people have some savings.  Without touching the principle, you can spend the interest or yield it generates.  Add this to the savings from your lifestyle changes, and you may find you can cover a significant portion of the costs of LTC yourself.  You will only need to cover the shortfall from some other sources, like insurance, so you do not spend down all your savings and end up on Medicaid.

People investigate LTC insurance for two reasons.

  • First, they do not want to go broke.
  • Second, many long-term care service providers will not accept Medicaid.  Nursing homes generally have to because of federal laws–but a nursing home is usually the last place you want to be.  If you have the ability to pay from your cash flow and insurance, it will let you choose where and how you will be cared for. The providers will welcome you with open arms!

If you have not investigated LTC insurance, now is the time, while you are still healthy enough to get it.

It is a logical discussion and it is not appropriate for everyone.  But please investigate with someone knowledgeable in planning for LTC.  At The Long Term Care Guy, we have been doing only LTC planning for over 25 years.  Since nearly all of our business comes to us by referral, we may even may be working with your financial planner or attorney!

Call TheLongTermCareGuy.com at (920) 884-3030 or email us for a time to investigate your situation.

What’s it Really Like Paying for Long-Term Care

What’s it Really Like Paying for Long-Term Care?
What’s it Really Like Paying for Long-Term Care?

Annual cost range is $18,720 for adult day-care services to $100,375 for a private room in a nursing home!

As written by Michelle Singletary and published in the Washington Post on November 26, 2018

One of my favorite Spock quotes from the Star Trek television series is, “Live long and prosper.” Who doesn’t want a long life, right?

But what if the longevity means spending down your money for long-term care? And that’s if you’ve been prosperous and have the funds to pay a facility or home health aide to care for you.

Genworth Financial recently released its 2018 Annual Cost of Care survey and found that the annual median cost of care now ranges from $18,720 for adult day-care services to $100,375 for a private room in a nursing home.

I asked readers to share their long-term care experiences, and here’s what they had to say:

“My mother had Alzheimer’s and was in a memory unit for two years,” wrote Chris Gonzales from California. “My dad has been in assisted living for two and half years and for the last two years has needed round-the-clock care. The cost, when my mother was alive, totaled $230,000 a year. The cost to care for dad is now $170,000 a year. This is in Fort Smith, Ark. My brother and I are very lucky that our parents lived below their means, saved, and did extremely well investing their money in the market, so money has not been an issue. We are also grateful for the ladies that watch over our father and consider ourselves extremely lucky to have people we can depend on as we both live out of state.”

“I managed the care of my mother (who had Alzheimer’s disease) from 1998 through 2006,” wrote Debbie Trice of Sarasota, Fla. “Even that long ago, the cost of her care approached $100,000 annually once she had to move from an assisted-living facility to a skilled nursing facility. The actual cost of long-term care goes way beyond the monthly or daily facility charges. Personal expenses (e.g., adult diapers, toiletries, laundry, haircuts) can be significant. I saved some money by purchasing diapers from a wholesaler and toiletries from a discount store and doing mother’s laundry myself. Medications cost more for residents in long-term care, too. Some states require that all medication, including over-the-counter items like aspirin and vitamins, be specially packaged by a pharmacist in blister packs — at extra cost, of course. Staffing is a critical issue. To keep their rates competitive, many facilities limit their staffing levels to the minimum required by law. But then some patients’ needs can’t be adequately addressed. I found it necessary to hire private duty aides to supplement facility staff for a few hours each day.”

Lane Beckham of New Jersey wrote, “Four years ago my wife (then 71) suffered a fall which led to numerous complications over the next year. She has since been bedridden going from a home hospital bed to a wheelchair. She can feed herself, converse, watch television and read catalogues, but that’s about it. We’ve had a 24/7 home health care aide since April 2015 at a current cost of $215 a day or $78,475 a year. A long-term care policy kicks in $100 a day but only for 5 years of benefit days.”
“My mother died two years ago and for the last two years of her life, she had progressively worsening dementia,”

One reader wrote. “We (mainly my sister) arranged for her to be cared for at her home. The cost was running at about $85,000 a year and that was two years ago! Why? At times, she was simply too much for one person to handle, so we often needed two people to stay with her. And while we went with the better-rated agencies, we still had problems with sitters stealing, using drugs, having friends over and even taking my mother out when they needed to run errands. What a nightmare.”

David Treece, an investment adviser and financial planner based in Miami Shores, Fla., has a client with Alzheimer’s who has a Genworth long-term care insurance policy, which so far has paid out about $323,000.

“I have learned nothing will ruin a retirement plan faster than long-term care expenses,” Treece wrote. “Try having to come up with nearly a third of a million dollars like my client if you don’t have coverage. It’s just unimaginable for most people. My biggest concerns for my clients are a group I call ‘the alones.’ These are people who have no spouse, no children, no close siblings and really nobody else. They can’t even name a beneficiary let alone someone to serve as a power of attorney or health-care surrogate. This group seems to be increasing as so many people never had children, are divorced or never married, or are estranged from family. Who is even going to help them? Our society isn’t really set up for this, and I don’t see any easy solutions.”

*****

How comfortable do you feel paying for care out of pocket when your health changes?

  • Have you thought that Long-Term Care insurance would not be needed?
  • Do you plan on spending down to Medicaid, a welfare program and then search for a place that will accept it – and you?

If you are concerned, contact www.TheLongTermCareGuy.com at (920) 884-3030 and schedule a time to investigate with someone who understands and can help you find a way to handle this!

Observations from a Recent Hospital Stay

Why are CNAs moving from (LTC) Long-Term Care Facilities to Hospitals?
Why are CNAs moving from (LTC) Long-Term Care Facilities to Hospitals?

Nearly every one of the CNAs at a recent hospital stay started their careers in a long-term care (LTC) facility.

Recently, I was an inpatient in a hospital after having surgery.  While there, I visited with a number of nurses and CNAs (certified nursing assistants) while they were caring for me.   Nearly every one of the CNAs had started their careers in a long-term care (LTC) facility. The reasons these workers moved on to a hospital setting for work is the main problem with LTC today.

Caregivers (CNAs) are in very high demand and very short supply.

LTC workers especially are underpaid and overworked.  They rarely receive merit or cost of living raises.  The facilities that desperately need them are having a very difficult time making ends meet.  This is because Medicaid, which pays for nearly half of all LTC in the United States, pays nursing homes significantly less than the cost of care.

Nursing homes which accept Medicare for rehabilitation care (their main source of revenue) must also accept Medicaid—the welfare program which pays for care when the patient cannot afford it.  Thus, the nursing home has become the main place that will accept a person if he/she cannot pay for care in an assisted living facility.  Assisted living facilities cost between $4000 and $8000 a month depending on care needs.  Since they do not receive Medicare for rehabilitation care, they are not required to accept Medicaid, and many do not.

Most people cannot afford the monthly charges for long without LTC insurance.

The problem is that many people do not plan for care in later life, with investments or insurance that pays for LTC. Many of the residents in LTC facilities are on Medicaid, and most of them are in nursing homes.  This is because the very nice assisted living facilities are rapidly deciding not to accept Medicaid because of its inadequate reimbursement for care.

Back to the CNAs I met in the hospital.  While there is a desperate need for caregivers, those caregivers need a living wage, and many long-term care facilities are unable to provide that. So, they migrate to the hospitals who can pay them and provide benefits.

If you want to have good long- term care, in a place that appeals to you when your health changes, you need to have a plan to pay for that care or the odds may be good that a nursing home may be your only choice.  Years ago, I purchased LTC insurance that will pay for the care I need, in a setting I will be happy in when that time comes.  Will you?

For more information, browse all of our resources at www.TheLongTermCareGuy.com.

 

May is Disability Awareness Month – Does Long Term Care Keep You Up at Night?

May is Disability Awareness Month – Does Long Term Care Keep You Up at Night?
May is Disability Awareness Month – Does Long Term Care Keep You Up at Night?

May is Disability Awareness Month – Does Long Term Care Keep You Up at Night?

Becoming disabled from sickness or accident and unable to work is a significant problem for many. Once retired you might think this is no longer a concern.

But what if you became disabled enough to need assistance with bathing, or dressing, or moving about (arthritis)?  50% of Long Term Care is due to dementia, something that scares most everyone, and is becoming more and more common as we live longer lives.  This need for care happens to 70% of people who have reached age 65 according to HHS, and typically it starts by involving spouse or family helping out.

Caring for a family member can be a full time, 24 hour a day job and nobody can do that for long, especially when that caregiver may be over age 65 themselves.  You can hire care to come into the home daily to help out, but this is expensive.  We also have assisted living facilities popping up like mushrooms in the spring, but they cost from $4000 to $8000 a month.  Who can handle a bill like that for very long?

Medicare does not pay for long term care.  Medicare is for doctors and hospitals and fixing us when we are broken.  It does pay for a few days in a rehab center following a hospital stay of at least 3 days as an inpatient, but not for anything more.

Medicaid is a welfare program that will pay for care once you are completely out of money (broke).  They strongly verify this and will not provide care if you have given money away in the past 5 years.

Long term care insurance is the least expensive way to handle these costs, if you purchased it back while you were healthy.  Most people are surprised to learn they do not need as much of it as they think.  When health changes, the family budget changes as well.  No more extra vehicles, toys, travel, when someone cannot drive.  The money previously spent for fun can be redirected towards the cost of care.  Interest on savings can also help out without spending any of the savings themselves.  Only the shortfall needs to come from insurance.

If you did not plan ahead and now find yourself among the 70% of seniors who need care and without a plan, there are some alternative strategies that can make your money last longer.  Wouldn’t it be nice if you could pay for this care and have some left over for spouse or family?

In a worst case scenario, there is a way to protect some money for family instead of every cent going to the costs of care.  At The Long Term Care Guy we work with every one of these strategies.  If this keeps you up at night, give us a call (business hours please), and lets investigate what strategies might help you.  You can reach us at (920) 884-3030 to schedule a meeting.  There is no cost to investigate.

Think You Are Too Young To Worry About LTC? Think Again!

I just read that the Centers For Disease Control and Prevention (CDC) says “The percentage of adults aged 45 to 64 years who reported needing help with activities of daily living such as eating, bathing, dressing, or getting around inside their residences has increased nearly 50% from 2000 to 2015.  This was published in their weekly Morbidity and Mortality Weekly Report on August 26th.

For years it has been known that 40% of the people needing Long Term Care (LTC) services in this country are between the ages of 18 and 64.  LTC is not something that people can ignore until age 85.  Just like car insurance, LTC insurance must be purchased while you are healthy – so you have it when you need it.

By 60 years of age, 25% of us cannot qualify healthwise to purchase LTC insurance.  The great majority of people cannot afford to pay for such care out of pocket or savings for very long.  This leaves them no alternative but to apply for a welfare program called Medicaid.

Medicaid will only pay for LTC when you can prove that you are completely impoverished.  In most states that means you have less than $2000 left to your name and have cashed in your life insurance as well.  A married spouse can retain use of the home and car but this goes back to the state – not your heirs – after last death.

LTC needs can last for many years.  Alzheimer’s is only one of 68 different types of dementia.  By age 65, one in eight have it.  By age 75 it is one in four and by age 85 it is half of us.

This brings up another study published in the Journals of Gerontology: Medical Sciences that says “Older adults who do not exercise often – or do not exercise at all – have a 50% greater risk of developing dementia as they age”.  Anyone with diabetes also faces a significantly higher risk of developing Alzheimer’s.

Will you wait until it is too late to plan for your LTC when your health changes?  Or will you proactively investigate solutions while they are still available?  The ability to pay for care not only prevents impoverishment, but gives you choices as to how and where your care will be delivered.

Give TheLongTermCareGuy.com a call to meet and see what you can do for yourself.  We are experts who have done nothing but work with LTC financing for 23 years now.  There are solutions for almost any budget.  (920) 884-3030 or (800) 219-9203

Alzheimer’s Is Expensive

Alzheimer’s Disease is the 6th leading cause of death in America.

By age 65, one in eight has it.  By age 75 it’s down to one in four, and by 85 fully half of us already have it.  If you live long enough, its almost inevitable.  Alzheimer’s is not preventable, and not curable.  At first you will know that you have it, and are trapped in its progression.

At some point you will need help.  Sometimes the children can retire early and move in to care for us 24-7.  Most of us do not have that luxury – we will have to pay for home care or assisted living facility care.  Most LTC, even for dementia, is not done in nursing homes anymore.  Costs for dementia care are the highest range of assisted living billings, often up to $6500 per month.

How long can your budget last with this kind of an extra bill each month?  Many other physical ailments can bring about a need for care too.  Its all expensive, like a car accident with car insurance.  Surely you insure that risk, so why not insure for LTC costs since 70% of us will need some (per HHS)?

I have seen some very inappropriate proposals given to consumers on Long-Term Care insurance.  For most agents or financial planners this topic is a once in a while, also have product.  They typically do not research all the options, and tend to suggest more insurance than will be needed, making the premiums far too high.

Before you think it is out of reach for your budget, contact a professional who can help you decide how much is appropriate for your situation, taking into account the lifestyle changes that occur when care is needed.  We constantly hear “Oh, that is much better than we anticipated” once we meet with clients.

Consult with the experts.  We have 23 years experience in the financing of Long-Term Care.  We have solutions for anyone, regardless of finances or health.  The best options are for those who are still healthy, but we can help everyone in some way.  Give us a call at (920) 884-3030 in Green Bay or from anywhere at (800) 219-9203

Is Motel 6 WhereYou Plan To Retire?

Tom Bodette will leave the light on for you, but do you really want to stay there?

I surely do not! And I do not want to end up in a welfare nursing home either. Many people think that you get the same care on Medicaid as you would by paying for your care. The problem is the Medicaid reimbursement is so far below market rates only the Motel 6’s of nursing homes or assisted living homes will accept you.

You’ve planned to have a comfortable retirement, and unless you can afford 6 figures a year for a nursing home, or over $50,000 for a nice assisted living facility or home care, you should be looking into LTC insurance while still healthy enough to get it. Every year it is tougher to get this coverage, the benefits are shorter, and the costs are higher. Get it while the getting is good.

But you’ve heard that this insurance is very expensive.  From proposals my clients have shown me, it is – when it is not appropriately chosen.

How does over $850,000 of benefits for a 65 year old (male of female) for less than $2000 per year premium sound?  Say you pay this premium for 20 years until you are 85 years old.  You spent less than $40,000 for over $850,000 of coverage, is that expensive?  Is it affordable for you?

Today, less than 15% of Long-Term Care is done in nursing homes.  Thus, just like flood or earthquake endorsement on your homeowners insurance, many people choose not to cover the nursing home, but purchase just enough LTC insurance to cover home care, assisted living facilities, or adult day care.

Then bear in mind that when someone needs care, their lifestyle changes drastically.  No need for the second (or third) vehicle, vacation travel drops, less golf, boats, campers, motorcycles, etc. to support when they can’t be played with.  Most people can cover a good part of the cost of LTC by simply repositioning the dollars from things they can’t do anymore.  Interest on your life savings can help as well without depleting the balance.

OK – here is the fine print.  65 year old, male or female, buys a $70/day benefit.  This plus available income and interest may be sufficient.  It will give you 10 years of collecting when you need care and INCLUDES an automatic 5% compound increase on your benefits every year.

You pay $1980.94 per year for 20 years.  On the 21st year you need care and file a claim which starts at $185/day (remember the automatic inflation included) and will increase over the 10 years you collect until it reaches $288 per day for a total of $852,603 paid out to you.  If your care costs less, you get all the money for every day of care regardless.

If you can’t find a deal this good with an A+ rated company, no matter where in the USA you live, call (800) 219-9203 and talk to us at www.TheLongTermCareGuy.com