I’m Michael Marx, certified financial planner and a financial consultant with Alliant Retirement and Investment Services or Aerys for short. We’re the wealth management division for Alliant Credit Union. Uh if this is your first webinar or your 100th webinar, uh I appreciate you joining me this evening and I know that time is an asset, so I’ll do my best to make this worth the investment of your time. Um, for those of you that have attended my webinars in the past, uh, I know I normally talk about, you know, the market, geopolitical events, uh, but I thought this topic was important because it’s something that can have a potentially a a great negative impact on on your investment portfolio and your retirement planning. I mean, in addition to your life and health. So, you know, and frankly, if it doesn’t it doesn’t just affect you, right? It affects all the people around you. So, it’s best to discuss potential long-term care costs before they happen to be better prepared for anything unexpected.
Let’s see if our Zoom will cooperate. There we go. So before we dive in, I just want to share a quick housekeeping item. Today’s session is for educational purposes and it includes proprietary material. Uh so to protect both the content and everyone’s privacy, we ask the attendees please not to record or capture the presentation whether on video, audio, screen sharing or AI tools without prior to consent. Um we appreciate your understanding. Uh with that, let’s just move on here. Uh, and so just as I’m not sure where everyone joins us from, uh, I’m not sure if you’ve joined this webinar via an email that you received directly from AIS, uh, or signed up on Alliant Credit Union’s website. So, I’d like to just take a couple of minutes to talk to you about Aerys. Uh in addition to the weekly webinars that we host, we’re actually a fullervice wealth management and investment planning division here. Uh we have a broad range of investment options. Everything fixed rate guaranteed to as aggressive as you want to be in the market plus leverage. So we do you know the usual complimentary financial planning, some estate planning. Talk a little bit about that at the end. uh investment management, some more of the advanced planning as well. So, speaking of webinars, we offer multiple webinars throughout the week with different presenters. Each of us usually hosts twice a month. So, our team at Alliant uh Retirement Investment Service, I always call it Aerys. Uh we’re focused on helping you understand the ins and outs of investing, saving for retirement, and and much more. So if you haven’t looked at our website, I would encourage you to do that. So our website is our website is aerys a r i s.allantiantcreditun.com
and you can see a list of our weekly webinars, our podcast which is investsavvy, our blog and some other financial resources. um or you can find it right on the Allian Credit Union website in the upper right hand corner under the Retire and Invest tab. So, my next webinar will be in the afternoon and that’s Wednesday, August 12th. It’ll be at 12:00 noon central time, 1:00 Eastern. Um it’s in it’s titled the fragile decade. And what we look at is we talk about the five years before retirement and the five years after retirement. We talk a little about um some milestones, some goals where you should be uh and some expectations on the final five years or not the final five years, I guess the first five years of your retirement. H that was ominous. So, my next webinar back in the evening is Tuesday, August 25th, and that’ll be 6 PM Central, 700 p.m. Eastern, and it’s going to be uh it’s titled Life After Work. And so, it’s creating a good life in retirement, right? So, what we do is we talk a little bit about how you create monthly income from different sources, you know, being being keeping in mind as far as, you know, not having to pay unnecessary taxes, penalties, taking account inflation. We’ll talk a little about some of the strategies that can help you protect that retirement income because nobody wants to go back to work. Well, at least because they have to, right? Maybe they want to go back to work for other reasons, but if you want to make sure that’s a choice. So, um, so we have a few goals today. As I said earlier, my hope is that you have a general understanding and impact of having or not having some type of long-term care coverage as part of your plan. And it is not AIS’s goal to sell you a long-term care insurance plan. Uh, but I do hope that you have an appreciation for the need to plan for long-term care uh well before you need it. Obviously, similar to how you approach retirement planning, right? You start on that years before. You don’t wait until you retire to start planning. Uh, and I want to make sure you learn about some of the options that can help you mitigate some of the risks of that long-term care. Uh, and maybe instill a sense of confidence about your future. So, here are the topics that we’re going to be covering. the four myths about long-term care, expenses, the impact of caregiving, benefits of early planning, how to plan, and uh funding options to consider. Now, that last bullet point, Lincoln Moneyguard Solutions, we’re actually not going to talk about Moneyguard today, uh this is Lincoln’s presentation, but we’re a company that’s really product neutral. We’re we’re actually nonproprietary. So we don’t have Aerys products, you know, where Fidelity would might recommend Fidelity, JP Morgan might recommend JP Morgan, etc. They’re all good companies out there, but we are not because we use many different companies to offer solutions. Uh, but I want to make sure you leave with adequate time at the end to address any questions. So there’ll be plenty of time at the end.
So, what are we talking about when we refer to long-term care? Um, and what you’ll hear us reference throughout this is something called activities of daily living. And those are called ADLs for short. So, these six activities, eating, bathing, dressing, toileting, transferring, which is it’s being able to get from one place to another in your home. uh incontinence is referred to as activity of the daily living. Right? So if you’re unable to perform at least two of these activities for at least 90 days or you require substantial supervision due to you know a cognitive impairment or physical impairment, you can use long-term care protection to help cover some of those costs. Now, it’s important to look at these because this is a these are the basics that pretty much all long-term care is based on as far as what makes you eligible for that. So, assistance, a lot has changed over the last decade. I’ve been doing this maybe last couple of decades now. I’ve been doing this for over 30 years and
it’s it’s really it’s not that traditional long-term care. I actually have my mother was actually in a facility um for dementia, right? So her her part was memory care. Um and and frankly we we had her home and we actually had a nurse um you know assist. And then at some point it just became too much and and we we moved her to a facility. It was a really nice facility and and it was actually really good for her health actually improved uh which was fantastic to see that. Um, but it isn’t necessarily that that any of those terrible those terrible images that might because I know when it comes to that either for yourself or or the family, there’s certainly a concern, right? Are you abandoning your family or or you know, hey, maybe I’m worried about going into something like that. I don’t want to go into that kind of facility. But being able to plan early allows you to to state your wishes, right, and and come up with a plan. So anyway, so it’s a very broad range, right? And and it’s, you know, like I said, it might be home care. It it might be just some of the adult daycare services. Uh they have residential care communities where, hey, you know, I’m I’m pretty much independent. I just might need someone to check on me. I had a uh a friend that I go to church with. He moved his mom. His father passed away and they owned a a ranch and it was just too big for his mother to handle on her own. So they sold that ranch and they moved her into a facility. Um, and she’s she’s thriving, frankly. So, and obviously, just like I said with my mother, there’s specialized care, memory care. So, it’s really a broad range of what long-term care covers.
So, it’s important to view it this way as far as what you may or may not need, right? and and obviously these things go by different names as far as that care, you know, that assisted living, the licensed residential care facility, and some of those specialize in Alzheimer’s or cognitive impairment. So, you’ll find that a lot of the larger ones, I’m here in Houston, uh they cover a range where where it might be, hey, I just need some residential care community. I have my own apartment, but as my situation, as I get older and there’s some kind of decline, I might need a little bit more help. And there’s a lot of places that can help cover all the way through. So, let’s talk about a few of the misconceptions about long-term care. So, there was a recent study of a thousand
US and 500 financial professionals conducted by Lincoln. um and issues that you know the individuals and financial professionals face when they’re planning for long-term care. So we’ll we’ll we’ll talk about these findings throughout the presentation, but we find that there’s there’s basically four main reasons why people either postpone planning for long-term care or they don’t begin addressing it at all until they need it. So the first one, it has to do with the belief that people think it won’t happen to them, right? And they downplay their personal risk and believe the long-term care is for, you know, something that’s risk. It’s a risk, but it’s a risk for other people. Now I will tell you I think I think as we get older in this generation or the next generation we see our parents or other other friends parents that there’s probably a good chance that you know somebody or personally had a family member where they were in the situation where they could have used this assistance. So I think I think part of this as far as thinking that they don’t need that care is is frankly nobody wants to think about anything bad happening to them, right? It’s kind of like life insurance. You know, recognizing that you have life insurance is is also recognizing you are going to die one day. Whereas with long-term care, maybe you won’t be, right? So we hold out for that. Um but with that said, so here was here was the thing, right? So they surveyed that was really interesting. Now 33% think they will need care, 40% think their spouse will and 50% assume their parent will. Now with that said, the reality of of using that is actually much higher and we actually think it’s it tends to be something older, right? But in the world of a very high stress world that we live in with strokes and heart attacks and things like that, it isn’t that traditional nursing home care. So, so it can happen to you. Hopefully, it doesn’t. But the second misconception is that Medicare and Medicaid will have you covered. And if we were doing this live, we would do a show of hands that, you know, how many people believe that Medicare and Medicaid will help you pay for long-term care? Um, and and generally a fair amount of of hands goes up for that. Um but the reality is Medicare only pays for a 100 days and Medicaid is only available to those with limited resources and income, right? So limited assets. So if you have had experiences before with a parent or grandparent or something that you know they have you have to spend down your assets first before Medicaid will actually start covering those costs. So, it’s always better even if it isn’t the traditional insurance to say, “Hey, you know what? I need a plan. What is my plan?” So, about 65% think that Medicare or Medicaid will help you pay for long-term care. Now, Medicaid does. So, you are right in that, but most people think it’s going to be Medicare. I don’t know if you were part of that that thought that, but this is a very important reason as far as why you do that. So, let’s talk about the misconceptions about the risk of long-term care. Also, number three, that’s what your savings are for. Now, this cost can vary greatly depending on what part of the country that you live in. I can tell you here in the south, it’s still expensive, but it’s about half what it could be up in the Northeast. So here in Houston, you run about 5,5500 um for the semi-private room. That’s what we’re paying for my mother. And that was years ago. So it’s probably a little bit more than that because rarely price do prices go down. Um so up north it could be double that. So and that’s for the semi-private room. When you start looking at private rooms, obviously it can be a little more expensive than that.
Now, the reason why it’s important, right, is because having an idea of those costs will kind of give you an idea, okay, you know what, I do have in income. I do have a pension. I do have social security. And that will offset some of those costs. If you’re married, right, someone will still be in the home and they’ll still need some of that income, but it does offset some of those costs. So, normally when you do the long-term care planning, you don’t have to usually fully fund that. So, my family will take care of me. I actually just had this discussion with one of my friends. Um, and I thought this was a really interesting survey, right? So, you might be thinking this as well, and I’m sure you know your children might be happy to do that, but but I would say here’s kind of the reality of it. So this is probably one of the things you need to consider the challenge of providing that care on your family, right? It is not easy. It can it can not only be costly, you know, not just the lost hours and the earnings, but it also has emotional and physical consequences on this. So what I think is really interesting on this, so so in the survey on the left in the blue, it’s a percentage of families who had this concern and then the actual caregivers who actually experienced it. And really there’s just a couple of things that I just want to point out. So the emotional challenges of providing care, right, about 72%, hey, this was this is a concern. But what we found that once they were in it, more actually found it far more difficult. 80% 84%. The physical challenges and the difficulty 64% that’s pretty close. Uh the time involved 64% had a concern. 72% actually had that. Um and some of the other things, right, the financial, it was it was less expensive than they thought, but it was still a concern obviously, right? Because usually when you’re taking care of them, they’re living in your home. Um, now I can tell you so traditionally this is not always the case. So women in the family are particularly at risk because they’re often the ones who end up providing care. So one in four women who provide care develop health problems themselves, right? And and they could they they contribute that to the result of being a caregiver, right? the stress and the time involved. The par the daughters who care for the ill parents are twice as likely to experience depression.
The overall cost of a female caregiver is is estimated about 325,000. That’s due to lost wages, diminished working hours, etc. Whatever that dollar amount is, it’s taxing. And frankly, that dollar amount is it’s high, but I think I think the stress level on that, you know, we experienced it. I have friends who’ve experienced it. But so, who needs to plan for long-term care? Frankly, everyone.
Now, and I want to stress that you may or may not need insurance, but you do need a plan. So if the potential impact on your loved ones is not reason enough, consider a few additional reasons. So the quality of care, right? I would say one of the biggest concerns people have about long-term care is the quality of care that they’re going to receive, right? And one would say, well, I think it’s the cost. But if you have the money, the quality of care kind of goes hand in hand, right? So planning ahead can give you a choice of how you want to be cared for including your home care right at home with a professional. Family is great but and they do need to be involved with your care but nearly 3/4 of the people express concerns about being able to give to provide adequate care for their family if needed. And and that’s one of the things that we ran into with with my mother in that and that she got to a point where even with help that we hired a a private professional to help it it still became too much. She needed she needed for the most part 24/7 care. Um and you know there’s there’s an issue of dignity.
This is one of those things that do you want your children to help you shower, to help you use the restroom, to clean up after the restroom, or if you’re wearing a diaper, do you want your son or your daughter changing that? Right? So, so there is a certain level of privacy and dignity that that allowing someone else to do that, a professional, medical professional, that it might be easier on on yourself, right? Some people are fine with that, some people are not. And finally, there’s the financial challenge, right? So, um, someone’s going to have to pay for that, right? So, either with your assets or you might have something in place or some type of insurance or some hybrid in between. Um now this may or may not matter. You might have substantial assets and that’s one of the things that we do when we do planning right when we look at say hey you know you might want to self-insure. Um and others even who can self-insure they say hey you know what um I’d rather I’d rather just uh I’d rather just pay for something like that. I would say this as an example far more people need long-term care than like homeowners insurance. Okay now, the chance of your house burning down or a flood or hurricane or fire or something like that, that is a lot lower than someone who might need long-term care. Now, I will tell you for those folks who live in Florida as well as here in Texas, we know that hurricanes that storms are a very, very, very real thing. But even with that taken into account, I can’t imagine any of us would consider not having auto insurance or not having homeowners insurance, even though we probably have the assets to rebuild a house, but we would gladly say, “Ah, you know what? I don’t really want to have a plan for my long-term care.” Fortunately, you’re on here, which means it’s at least on your mind. So,
a lot of times we hear our clients, even though we talk about it, they wait until someone else close to them who actually needs long-term care. And then I think it’s that stark reality. And that’s their their springboard, right, as far as to to have that baseline or discussion on maybe I I do need that. Now, I would say maybe that’s not the best strategy for planning, but it does beg the question, right? When is the best time to start planning?
So, 91% of people think it’s really important part of retirement planning.
So sometime in your 50s is probably a good time to begin discussions, right? Not with just your professional um but with your family, right? Starting to communicate your needs or at least thinking about what you want.
And planning starts with a conversation. It certainly isn’t an individual situation, right? Because long-term care impacts families. So, it’s important that you make plans to discuss these long-term care wishes with your spouse, most certainly with your spouse and your children if you have them. Um, or a trusted person if you don’t have children. So, perhaps you’re by yourself, right? So, I would say it’s probably even more vital to have a plan at that point.
So, as you can see, many people haven’t had a family discussion. Uh, so don’t feel bad if you fall into that category. But I would say maybe commit yourself to doing something positive, no matter how difficult that may be for you or for them, right? If if you have to talk to your parents about it. I don’t know the ages of folks who are attending this. Uh
but look, have you talked to your family, right? Your spouse, your children have they may have already formed attitudes regarding your care because that’s important, right? They might have an idea and you’re like, “Hey, that’s not exactly what I want.” Are they on the same page? Would you feel comfortable having your children make those decisions for you, or would you like to have some say in it? So I would say just like the title says, right? Conduct a realistic family care assessment. The reality is you might need the support of a professional caregiver. So 70% of parents and children worry that they won’t be able to provide that adequate care. Um and 63% of family caregivers say long-term care insurance would have made it easier. And really, I’m surprised it’s only 63% because I’m not sure what part having someone else come in and help you with this difficult situation would not have made your role easier, right? Even if it’s just and you can take a break for a little bit. So, your financial professional, user, or whomever you’re working with, uh they can help you with the plan, right? include long-term care as part of your retirement planning. And again, that doesn’t necessarily mean insurance. Nine out of 10 Americans believe that financial professionals should take the lead in discussing long-term care with plans. Uh I don’t know if they have. I don’t know if yours has, but it is important, right? Because what I said before is that look, this can derail a retirement plan. um at the at at the very least, especially if you’re married, if one spouse needs that, those are assets that will be redirected and and they can be substantial. So, one of the ways that we can help is really just by facilitating that discussion, right, that you might be reluctant to have or some of the questions that you didn’t know, you don’t know what questions to ask or what things you should consider. We can start start looking at maybe some of the expensive planning, maybe look at your assets. It’s one of the things that we do as part of the uh our wealth planning, render financial planning. Uh and then we can maybe uh direct you to some of the health related legal documents that you’ll need to help prepare and have updated like that living will advance directive, right? Durable power of attorney. If you don’t have these, regardless of your age, you should have them in place. If you’re married, you certainly should have them in place. uh and and it’s important to make your wishes known. I cannot stress that enough.
So, let’s talk about some of the long-term care expense planning options, right? And there’s really a broad range of of solutions on the two extreme ends. One is self-funding, and that’s like, hey, look, I have enough assets. If something happens, I will use my assets combined with my social security or my pension, my other investments, and that’ll cover the cost. We should be fine. On the other extreme end of that is that you know what, I want to make sure the insurance covers it all if something happens. I don’t want to give that to a facility. I’d rather pay some every year um and and allow the balance of my assets to go to my spouse or to my children or grandchildren or charity or whomever right your beneficiaries at that point. I will tell you that I think many people usually live that somewhere in between where that hybrid is, right? Where you might use a different product where some types of annuities have a long-term care writer. Some of the life insurance uh with have some additional benefit writers on there like long-term care where you can draw off some of the uh the death benefit. Uh there’s life insurance long-term care combination products. Now, which one’s for you? It depends, right? So, a lot of these things, it would really depend on on your situation. Now, I can tell you what what folks dislike about long-term care insurance is that because or the traditional long-term care insurance is it’s the use it or lose it, right? So, if you don’t you don’t use it, then all that money that you spent on long-term care insurance, it’s wasted. And I’m like, well, that’s the best waste of money ever, right? Because that means your health was good. I can’t imagine somebody saying, “God, I hope I get deathly ill so I can really get my money back on those expensive long health insurance premiums that I’ve been paying for the last, I don’t know, 30, 40, 50 years.” Or, “God, I hope my house burned to the ground so I can really make that claim on my homeowners insurance.” And obviously, I’m saying that tongue and cheek. Nobody wants that. But but you are paying for peace of mind, right?
So let’s talk a little bit about some of the hybrid solutions.
So this is where they want maybe death benefit protection. So if I pass away, my heirs get that. But maybe if something happens, there’s a living benefit. If I do need those, it it might say, “Hey, I can advance some of those before.” Um, and it’s really for people who who want that somewhere in between. They’re saying, “Hey, look, you know, I do want that death benefit.” And frankly, there are people once you get into the later planning that they they don’t necessarily even need life insurance anymore, right? They have enough assets that if something happens to them, they they their their spouses will be taken care of. So now, you want to understand this so that the more things you have, right? So, if you have a death benefit on there, that that death benefit could be reduced if you end up having to use that writer for some of the long-term care, right? Which stands to reason.
But this is what I would say. Everyone needs to plan before care is needed. And planning starts with a conversation. So, include your family and we can help. And even if we’re not involved in that conversation, right, we can help you think about the questions that you might want to consider, right? Um maybe answering a question that you didn’t know needed to be asked. I think the hybrid long-term care solutions probably offer benefits at that somewhere in between. So if you don’t use it, right, it was still used for something else and there’s still assets to go to your family. Um, but I can tell you an early start obviously is usually better just like everything else, right? Early planning is usually better. Now, how can we help? So, we can help with the life planning component of it, right? Where it’s how you imagine your life in retirement, some of those headwinds that you’d want to consider, how do you mitigate that risk? So, budgeting, right? determine those income needs, right? So, not only I have this, especially if you’re married, right? I still have these expenses and if this expensive pops up, what are we going to do? What’s the strategy? What’s the plan? How do we look at this? How do we look at the tax side of it? Um, obviously the account management, those are rollovers, Roth conversions from a tax perspective. Um, and then the portfolio management. One of the things that we do at AIS now is um we actually offer trust and will services. So um some of the basic documents for trust, will p attorney, your living will, uh that hip authorization. So you really should have these in place. If you do not, uh we can help you with that. Hopefully everybody on this call already has these in place. Now, I want to thank everyone for attending. We’re at the Q&A part. So, while we’re waiting for questions, so any questions, go ahead and type them into that question and answer box or in the chat. That works as well.
Oh, yeah. Someone just verified that they paid 5,000 for their mother and they’re actually in Texas. So, that’s pretty normal here in Texas. Um I’m in Houston and it was somewhere around there. So we were a little bit more expensive than that. Um I’m actually going to put up a survey. So if so my QR code if you do have questions that will take you to my calendar and you can just schedule time. There’s my phone number. There’s my email. This is obviously in the evening. If you need to talk outside of business hours that’s fine, too. Um let’s put that. And while we’re working on the questions, let’s see what we have on the questions.
Uh, first question,
how do you know which is the best type for me?
So um what you’d have to look at so kind of generally speaking what we would look at as part of the planning process is that you’d look at your assets and you look at your expenditures in your retirement planning right so and you’d look at any overages or excess and then you’d maybe estimate cost care things like that and then you kind of narrow down some hybrids. Would I be able to post the image with the hands again? Sure. Let me go see if I can find those hands. Maybe. Was it those hands or those hands? How we can help? There’s a lot of hands. Hopefully, it’s that one. If it’s something different, let me know. Uh, someone they’re spending down mom and she’s still at home with caregivers. You say planning needs to start before care is needed. Can any planning be done when it’s already taking place? There there are some things that can be done. Um
yes. So, so the short answer is depending on how far she is and and without getting too much in the weeds. So, so what you can start doing and there’s some look back. So, so you know there’s these threeear look backs as far as your spend down. So, because the government’s trying to make sure you’re not trying to hide money, which that’s exactly what you’re trying to do, right? because you you don’t want to have the government pay for it. Um but but it can go back to a 5-year look back. So depending on how deep they are and as far as you’re giving away money uh or moving money out, that’s a possibility, but but that that’s probably it. And and it would she would have to be in there for quite some time, right, to be past that look back, but that’s just kind of an an FYI on that. So we mentioned that it cost an average of 325,000 for healthcare. No, that’s actually for lost wages. So, and if if if someone usually has to take care of a spouse, they’re usually losing that much over that period of time. And the wages uh does this include facilities where you can walk in and out of not sure the name. Uh so those are hang on that is those are the communities. We’ll go back to that. And those are assisted living communities. So, they are fantastic. I had a friend whose mother was in one and it was great. My mother was in the very same place, but she was further down the road in the memory care. So, let’s see if we can find the name of it that you were looking for. I assume it’s the the communities. Oh, there’s a lot more slides on here than I realized. Oh, there we go. the residential communities, residential care. Um, already are you spending down? Let’s see. How do you figure out what your cost would be? So, there’s a couple of things. So, again, this varies greatly on on what part of the country you live in. Um,
so, so what I would tell you is that there’s a couple of things. So, if if you have some questions on that, if you haven’t done planning, uh, go ahead and and just say, “Yeah, and and we can look at the planning for you and and kind of look at the cost in your area, you make some calls and get estimated costs in that area.” And and as far as that, you would you would basically say, “Okay, you know, that coverage, I think I’m going to self-fund or I don’t want to self-fund. Is there some kind of hybrid?” So, that’s basically what you would do. So I can tell you as far as the cost goes, oh hey, someone else asked that next question. So that was like that was just teed up. So how much the cost? How much do the facilities cost? So it depends. So generally speaking, it’ be anywhere between $6 and $10,000 depending on where you live and that’s per month. Um, and that’s usually for a semi-private room. If you’re up in the Northeast like like Connecticut or something, it’s a lot more expensive there. Um, now as far as how long you would need, so traditionally coverage is over a certain dollar amount, right? Or it covers per day a certain amount over time. Now, I would tell you the average stay, and this is one of the things that we talked to as part of our planning with the members, the average stay in in a facility is a year and a half or 18 months. Um, I’ve seen other studies where it’s about 2 and 1/2 years. We normally say if you’re buying traditional long-term care insurance, usually plan for four years, somewhere around there. Now, if you have a history of dementia, Alzheimer’s, or something like that, it can be longer. Um, but with that said though, so that’s roughly it. Now, now with the cost of that, remember, if you go into a facility, for example, you probably have social security. You probably, you may, not probably, not anymore, you may have a pension to help offset that. So you do have some income coming in. So it doesn’t necessarily have to cover the full cost of that, right? It might just be to offset some of that cost. Uh tell me about the long-term care insurance and its cost. So, normally the way that works is that traditional long-term care insurance is what I think the question is that you are asking is traditional long-term care insurance says, “Hey, I wanted to pay for I wanted to pay for X amount of days and X amount of dollars per day.” So, $100 a day, $200 a day. and I wanted to pay for two years, three years, four years lifetime. Obviously the longer out more expensive. Um, and then normally they’ll build in like a waiting period of, you know, 3 months before it kicks in or 6 months before it kicks in. So that’s the basic structure and that would be the amount is usually dependent upon what part of the country you live in. That’s one of the other things that if you’re working now and you’re thinking about it, but you’re like, “Hey, you know, for example, I’m here in Texas and I would say, oh, you know, I’m going to retire up in the Northeast,” which I would never say that because I don’t want to live in the snow, although it’s beautiful there. It’s a great place to visit. But, you know, my point is, and my family’s from upstate New York, so I can actually make that joke. They moved down here all because of the weather and they’ve been here a very long time. So, uh, let’s see, another question.
Hybrid policies. Oh, that’s kind of a range. So, what hybrid policies would you recommend for someone in their 60s? I would say if you’re not one of the yeses, just just shoot me a note or something or my QR code. And hang on, let me get to that last one again. My QR code and go ahead, schedule some time. And what we can do is go over them because they range. uh that it might just be payments, it might be double your benefit, something like that. So, just depends on what you’re trying to cover and depending on your health, right? Your current health on what you’re eligible for. So, let me get back to my QR code. Oops, there we go. Um, and then we go from there. So, let me see. If you have a long-term care policy for 20 years, it has unlimited coverage. Fantastic. I would go on claim in 15 to 20 years. Would it make sense to give this policy up for a hybrid plan? Probably not. But I can tell you this though, if if you um if you’d like, I could review that policy for you. But I really don’t think you would give that up. By the way, uh just so you know, I I assume everyone knows this, but at Aerys, we’re fiduciaries here, so we do have to work in your best interest. Uh
absolutely. So, yes. So, I’d be happy to take a look at that. You don’t have any children, nor does your sibling. Each of us has the other is a beneficiary. My guess is that each of us should plan for long-term care. For example, long-term care at a retirement home. Our local living community will charge 5 to7,000 a month. That is about right. My guess that each of us owns our own home outright. Hopefully, we don’t turn into the Simpsons.
That’s actually pretty good. Uh hopefully not that you don’t turn into the Simpsons sisters. That’s pretty good. Patty and Sama by the way for those who are not a fan of the Simpsons. Um let’s see if there’s have Fisher investments FL for my Ross. Can I still talk to you about long-term care? Absolutely. Uh legal documents. Yep, no problem. Women will. Yep, we can help you with those. Be happy to do that. Let’s see what other questions. These are great questions, by the way. It is fantastic when Oh,
are most portfolios with similar stock and bond mixes the same? Um, no. These are actually totally separate. Uh, with that said though, some of the hybrids actually could tie to the market. uh where where others just might be traditional insurance just says, “Hey, you know, it just pays $100 a day or $200 a day or whatever that dollar amount and they’ll do it for two years or a specific amount of time.” So, that doesn’t actually have to be uh obviously the long-term care can be a u a more conservative play.
Well, I use insurance for long-term care expenses instead of paying out of pocket. That is a good question. So, that really depends, right? So, we call that self-insuring. And I can’t tell you why that would be right for you or not right, but I can tell you where other people say, “Hey, you know what? I’d rather just pay for it out of my pocket. I don’t have I don’t have uh beneficiaries that I really care if they have money.” Uh so, and I do have ample assets that I’m not really concerned about that. So that’s that’s fine. Uh oh, hey, this is a good question. So, will your premiums rise in the future? The short answer is they can. What I would tell you is I would assume they will. And and here’s something different about about long-term care insurance in that traditional sense in that an insurance company can’t just up your rates for you. uh it’s governed at the state level. So depending on what you state live in, uh a company would have to go to the insurance board and say, “Hey, we need to raise premiums for this class of people, age, whatever it is.” Um and and this is a reason, right? And they would have to show a substantial threat uh for viability. So, um that’s one of the things that would actually be a a major concern uh for the insurance company for the uh department of insurance to approve that. And I can tell you some states are a little stickier than others, right? New York, Florida, Texas, they’re usually not very insurance company friendly. But, you know, for those who live in those states, uh we have seen homeowners policies and go up because of the storm. So, so it just kind of depends. I can tell you long-term care has gone up substantially over the last five years or so. And that is simply because insurance companies, one of the things when they write a policy, they make an assumption that x amount of people will end up dropping the policy just because they don’t feel they need it anymore because they passed away or something. Um, but what they found is that people are holding on to it longer. So that makes their risk pool a lot larger. Um, so if you have that risk pool that’s holding on to it, then you’re going to have to make that assumption that you’re going to be paying out a benefit. So we’ve seen we’ve seen some of those premiums actually double in price. So right now, you know, if you’re in your 50s, it’s about a,000 to,500 a year for some of the basic costs out there. And and when you think about that, that’s really I mean that’s not great, but if you’re going to make a claim for $5 to $7,000 a month, you’ll you earn your money back if if you end up needing to use that. And again, hopefully you don’t, right? Nobody nobody wants to use that. Uh let’s see what other questions do we have.
How’s long-term care different from medical insurance? um it covers it covers um it’s a different benefit right so it it covers in a facility or someone has to come into home where where uh where you might just be looking for like oh I’m sick or a broken arm or heart attack or something like that that falls under medical insurance this is this is actually separate because it’s usually the facility or at your house you don’t go to a hospital for that so I think that I think that’s all the questions. So, I want to thank everyone for attending this evening uh and very much so for your participation. It makes my job so much easier uh than just sitting here talking so and and thinking of thinking of ideas. So, anyway, with that said, thank you so much for attending. I hope everybody has a wonderful evening. Enjoy what is left of your summer and I hope to see you soon on other webinars. Take care. Be safe.