P L A N F O RL O N G E V I T YPlanning for Long Term Care at your age or any ageAmanda's Dilemma VideoCaregiver RealitiesCosts & Funding OptionsResourcesINSIDE© N e x u s D i g i t a l 2 0 2 2Sandy Essex, CLTC
C O N T E N T ST A B L E O F5C A R E G I V I N G3T H E S A N D W I C HG E N E R A T I O N9F U N D I N G O P T I O N Sself-funding, reverse mortgages, Medicaid,Veteran's Aid & Attendance15A S I X S T E P P L A N1 1I N S U R A N C E O P T I O N STradi tio nal LT CI, Hy bri d L TCI , L ifeIn sur anc e w ith li vin g b ene fit s13H O M E H E A L T H S E R V I C E P L A N S6P L A N N I N G F A C T O R S
PLAN EARLY TO EASE THE BURDEN ONTHE NEXT GENERATIONTHOS E WH O HA VE A GI NG PA RE NT S AN D DE PE ND EN TCH IL DR EN S HO UL DE RCO NF LI CT IN G RE SP ON SI BI LI TI ES . The term “Sandwich Generation”is used to describe people whofind themselves shoulderingresponsibilities for both agingparents and dependent children.This situation has becomeincreasingly frequent as morepeople start families later andlife expectancies increase.Balancing these responsibilitiesalong with managing a careercreates emotional, physical andfinancial stress. Caregiving has societal consequences as wellas personal ones. Most people plan for retire-ment without seriously consid-ering the impact of longevity. Post-retirement incomeneeds are not static. Just asthe needs of 35 year oldsdiffer from those of 65 yearolds, 65 year olds havedifferent needs than those age95. THE SANDWICH GENERATION
Amanda's DilemmaA Caregiver's Perspective "There are only four kinds of people in the world: those who havebeen caregivers, those who are currently caregivers, those who will becaregivers, and those who will need caregivers."Rosalynn Carter, former First Lady of the United StatesAugust 5, 2012
always adhere to smart choices.The irony is that the longer thelife the greater the chance ofdeveloping a chronic healthcondition that will require re-liance on others. It is rare to encounter people intheir 90's who are as physicallyand cognitively fit as a 65 yearold.According to the Centers forMedicare & Medicaid Services,the elderly comprise the small-est segment of our population,15%, while consuming more than34% of healthcare costs. Stat-istics reflect professional serv-ices, hospitalizations and medi-cations that are covered byMedicare, Medicaid and privateinsurance. Realistic planning for longevity isthe loving thing to do for thesake of the entire family, youngand old.Most people are optimistic. Whodoesn't want to live a long life?They also know that lifestylechoices such as healthy eatingand exercise contribute to long-evity even if they do not MIT AGE LABCLICK HERECAREGIVING
These statistics do not include costs the elderly incurfor chronic care not performed by skilledprofessionals. Physical assistance and normalactivities of daily living like bathing and dressing arenot part of these calculations. People who plan to agein place in their own homes also need to consider thecost of having others perform tasks they onceroutinely did themselves: paying bills, food shopping,medication management, walking the dog or gettingto medical appointments. So while a stroke patient'sMedicare will pay for hospitalization, doctor fees andother professional services like physical, occupationalor speech therapy, the patient who needs ongoinghelp with the normal activities of daily life will have tofind other resources.Support services needed by the chronically ill or agedmay be performed by family and friends. That is notto say there is no cost for services proved by informalcaregivers. It means the cost is shifted to loved onesin the form of lost wages, lower contributions toretirement plans, less time spent with their familiesand a huge amount of stress. Planning for longevity means having a plan thatacknowledges that post-retirement years havedifferent phases and different needs. Needs increasewith age as do costs. A good plan must include thepossibility of losing independence and its implications.PLANNINGFACTORS
Planning for longevity also has to be a collaborativeeffort as it requires buy-in from those upon whom youwish to designate as having financial and health careoversight. No matter how loving a family, choosingothers to provide future care can’t be done without afrank discussion of the implications upon their lifestylesas well as yours.Understanding what caregiving might actually entailmay lead to an uncomfortable discussion but it is farbetter than leaving loved ones totally unprepared whenan emergency arises. For practical and economicreasons, many families choose to combine paidcaregiving with informal caregiving,… that which isprovided by family or friends.Whether your plan is to age in your own home or moveto a residence where there are services andsocialization, you need to have some familiarity with theassociated costs. Unfortunately, the many online cost-of-care calculators only provide average hourly costsfor home-health aides or average room and boardcosts at Assisted Living Residences. (ALFs)NO CHILDREN OR YOUNGER FAMILY MEMBERS?SPEAK TO YOUR ATTORNEY ABOUT CHOOSING A POTENTIAL GUARDIAN.IT IS PREFERABLE TO CHOOSE MEMBERSOF A YOUNGER GENERATION WHENNAMING FUTURE CAREGIVERS.PLANNINGFACTORS
Typically the cost estimates are based upon 40 hours ofcare per week from a home health aide. Someoneneeding help dressing and bathing would need help withother tasks as well. The number of hours of direct careplus hours needed for providing other services can varydramatically depending upon individual needs. A costof $6,000/month would not be an unusual cost for amoderate amount of home at home. When asked, most people will say they would like to agein their own surroundings. However, that could be moreexpensive than moving to a residence where servicesare provided unless family or friends can take on a goodmany of the tasks. When comparing the costs of aging in place to the costof assisted living communities, be aware that the cost ofassisted living rises with the level of care required. Mostonline estimates only account for room and board.The online cost-of-care calculator provided byNationwide Insurance is better than most because inaddition to projecting future average costs-of-care, itallows the user to customize assumptions regarding theamount of care that may be needed. PLANNINGFACTORSWHEN PLANNING AHEAD CONSIDER THE IMPLICATIONS OF YOUR NEED FOR CARE RATHER THAN YOUR ABILITY TOPROVIDE SUPPORTINTERGENERATIONAL LIVING CAN BE A RICHEXPERIENCE FOR ALL.
Chronic care cost estimates canrange from $40,000/year to over$180,000/year for nursing homecare. Withdrawals to cover thesecosts in addition to anticipatedliving expenses can easily pushthe account owner into higher taxbrackets. Even the affluent will feelthe pinch when several years oflarge withdrawals create a down-ward spiral of diminished accountbalances producing less income. Liquidating assets is anotheroption that often is not wellthought out. The value of real estate, collectablesand stock portfolios are subject tomarket conditions. Some assets arenot liquid and take time to divest.Transactions can be complex andbeyond the ability of the owner toeffect when care is needed. They arealso liquidation fees to consider. We have established that the longer the life the greater the greaterthe chance there will be a need for care. How much care might beneeded for any individual is an unknown, but that doesn't mean youcan't mitigate the impact on your lifestyle or the lifestyles of yourloved ones.The majority of people in this country either haven't planned forFUNDINGOPTIONSthese expenses or are relying on their families without examiningthe impact. Others have giventhis some thought and assumetheir savings and assets will seethem through. Using retirementsavings or other hard assets isthe most expensive way to coverchronic care expenses. Withdrawals from tax-qualifiedplans are subject to income tax.
Another method of covering the costs of chronic care isto tap into the equity in your through the use of aREVERSE MORTGAGE. They have become more andmore popular for those who plan to age in place. Toqualify you must be over age 62 and own a privatehome, not a condominium or co-op. Reversemortgages are strictly regulated and one need not beafraid of a bank foreclosure and becoming homeless. MEDICAID is sometimes referred to as the insurer of lastresort. Medicaid is not free, you must qualify bothmedically and financially. Of all the states, New Yorkallows the most benefits at home. However, because ofeconomic pressure, New York has recently mademedical qualifications more stringent. New York alsorecently imposed a 30-month lookback for the transferof assets for care at home when previously there hadbeen none. The 5-year lookback applies to qualifying fornursing home benefits. For veterans of the Armed Forces and their spouses, aVETERAN'S AID AND ATTENDANCE PENSION may beavailable. To be eligible you must meet the criteria inthree areas: service-related, medical needs andfinancial needs. CONTACT ME TO CONNECT WITH EXPERTS INTHESE FIELDSLOOKING FOR PROFESSIONALSSPECIALIZING IN REVERSE MORT-GAGES, MEDICAID OR VA BENEFITS? HOME EQUITYMEDICAIDVETERANS' BENEFITS
Insurance choices are only for those who meet aninsurance company's underwriting and age criteria. Ifyour health is not up to the insurance company'sunderwriting standards, they will not issue you a policy. Ifyou defer applying for insurance, you will find thepremiums at the time of issue become more and moreexpensive and may be beyond what you can afford orchoose to pay. There are 3 primary ways in which insurance can helpdefray chronic care costs.:TRADITIONAL LONG TERM CARE INSURANCE is the mostflexible and provides the most insurance for yourpremium dollar. These policies are pure insurance anddo not have a cash value. If you never submit a claim,there is no residual benefit. These policies traditionallygrow in value because most people choose to includeinflation riders in their policies. They may also be tax-advantaged.HYBRID or ASSET BASED policies have guaranteedpremiums, limited pay periods and provide a tax-free lifeinsurance benefit if you don’t access the benefits forlong-term care services. These policies were originallycreated for people who own CDs or Money Marketsaccounts with large balances. Transferring a sum of$50,000 or more to an asset-based plan can leveragethe premium from 2 to 6 times for Long-Term Carebenefits. LIFE INSURANCE WITH LIVING BENEFITS allows those with aneed for life insurance to purchase a policy that canbenefit the insured if necessary. If the insured needs carebefore death, he/she can advance the death benefit forhis/her own chronic care needs. Since these policies donot have inflation features, they should not be used asthe primary funding method for care. They are more likelyto be a supplement to the other two types of insurance. INSURANCECHOICESCONTACT ME FOR A COMPARISION OF EACHTYPE OF COVERAGE WITH EASY TOUNDERSTAND EXPLANATIONS.IN SU RA NC E CH OI CE S CA N BECO NF US IN G. T HE RE I S NO O NE R IG HTSO LU TI ON F OR E VE RY ON E. HYBRID TRADITIONAL LIFE+RIDERS
Most people think of annuities as a way toensure an income stream after age 59 1/2.Annuities often supplement other retirementvehicles like 401(k)s and IRAs. Annuities growtax-free but distributions are taxed as ordinaryincome. Annuities with Long Term Care ridersare taxed the same way unless thedistributions are used for qualified long-termcare expenses. In that case, the benefitsreceived are not taxable. Unlike regular annuities, those with Long Termcare riders do require some underwriting.However, it is easier for people with healthissues to qualify for these than Long TermCare insurance. While many people buy theseannuities with funds from CDs, savings andMoney Market accounts others may choose topay by transferring funds from existingannuities or cash value life insurance that is nolonger needed. Transfers from other annuitiesor life insurance are not taxed and referred toas 1035 exchanges, so named from the IRScode.ANNUITIESAN NU IT IE S WI TH L ON G- TE RM C AR EBE NE FI TS A ND S HO RT T ER M TE RM C AR EPO LI CI ES A RE N OT A VA IL AB LE I N EV ER YST AT E. B E SU RE T O CH EC K WI TH Y OU RIN SU RA NC E AD VI SO R.SHORT TERM CARESome illnesses, injuries or recovery fromsurgery are temporary in nature but thepatients may still need assistance. If thecondition is not expected to last 90 days ormore benefits from Long Term Care policieswill not pay any benefits. Short Term Care coverage will pay for thesesituations. Short Term Care may also fill thegap for those who have long waiting orelimination periods in their Long Term Carecoverage
DON'T QUALIFY FORINSURANCE?TWO MORE OPTIONSFor those who do not qualify for other funding options, aHome Health Care Service Plan may help defray the costof home care by several thousand dollars a month. Service plans provide a predetermined number of carehours at a greatly discounted price. The subscriber ormember can choose among 4 different plans for anannual or monthly fee. The only difference among theplans is the number of hours being purchased. These plans are NOT insurance. There is guaranteedacceptance for everyone who is not currently receivingcare. Unlike insurance, there is no medical underwriting,no deductibles, no age limits and no claim forms. Members can access benefits once they have been inthe plan for 90 days following enrollment. Members canaccess benefits with just a phone call If you have been denied Long-Term Care Insurancecoverage due to health history or age limitations or yourLTC policy benefits are inadequate, you can still getaccess to these plans as long as you currently liveindependently. HOME HEALTH CARE SERVICE PLANSLIFE SETTLEMENTS: ANOTHER SOURCE OF CASHIf you own life insurance that you no longer need or can'tafford, find out if a Life Settlement might be found moneyfor you. Complete the form on the last page to requestmore information.
Each option for funding your plan has its pros and cons. Some people equate paying insurancepremiums with gambling. If that is your frame of reference, consider this: WHAT IS YOUR RISK TOLERANCE? HOW MUCH OFYOUR ACCUMULATED SAVINGS ARE YOU WILLINGTO GAMBLE WITH? WHEN YOU PAY PREMIUM AND NEVER USE THE BENEFIT, YOU WILL HAVE LIMITED THE LOSS TO JUST THE PREMIUM. WHEN YOU DON'T PAY PREMIUM AND NEED THE BENEFIT, YOU RISK YOUR ENTIRE NET WORTH. Contact me for a free and no-obligationdetailed comparison of the 3 insuranceoptions available.
Think about your future lifestyle including geography and housing.Research costs for in-home and facility care.How will you fund costs above your normal monthly expenses?Whom would you choose to oversee your finances?Who can you rely on to make medical decisions in accordance withyour wishes if necessary?Inform your loved ones of your decisions!22.214.171.124.5.6. MEMORIALIZE YOUR PLAN WITH A TRUST & ESTATE OR ELDER LAW ATTORNEY6 STEPSFOR A BULLET-PROOF PLAN
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