Safe Money - 7-6-24

Episode Transcript

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Good Saturday twelve. On this firstSaturday in July twenty twenty four. Just
think, folks, the year oftwenty twenty four is half over. It's
the first week in July, sowe're on the second half of twenty twenty
four. So a reminder this morningwhen we first began. First and foremost,

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this morning, I want to remindyou of our virtual community meetings which
are coming up here this month,coming up here on Tuesday July sixteenth and
Thursday July eighteenth, at ten o'clockin the morning. On Tuesday July sixteenth,
at ten o'clock, Quig reviews thebasics of Medicare and then focuses on

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the Medicare supplement plans that are available. Remember there are ten Medicare supplements.
You get to choose one of thoseten plans. Prescription drug plans are reviewed.
Two days later, on July eighteenth, we talk about the basics of
Medicare and then focus on the alternativeto original Medicare, and that alternative is

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the Medicare Advantage plan, and inparticular, what we feel is the more
competitive of the advantage plans available inthese Medicare regions, and that plan is
the AARP Medicare advantage plan. Thatplan is provided by United Healthcare. So

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we encourage you to give us acall call Craig at five six three three
three two twenty two hundred and receiveinstructions on how to participate virtually in these
meetings. We used to do thesemeetings in person, but since COVID,
since the COVID epidemic hit several yearsago, we started doing these meetings virtually

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and really have found out that thevirtual meetings we get greater participation. With
the virtual community meetings, you stayin your own home, press your interest
in wanting to participate in these meetingsand he'll give you instructions on how to
participate virtually. So now that youknow, listeners, we are independent agents,

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so we represent a variety of insurancecompanies in these Medicare regions, and
we emphasize on July Tuesday, Julysixteenth and Thursday July eighteenth, we review
the basics of Medicare, focus onthe Medicare supplements on our meeting on Tuesday

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July sixteenth, and then again twodays later on Thursday, July eighteenth,
we again review the base of Medicareand then concentrate on the Medicare Advantage plans
which are available in these Medicare regions, and there are eight Medicare advantage plans.

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We emphasize what we feel is themore competitive of these advantage plans,
and that is the AAARB Medicare CompletePlan offered by United Healthcare. These meetings
are virtual, so remember you stayin your own home, you use your
own computer equipment, and you tuneinto our virtual Medicare community meetings. So

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again, in order to participate inthese meetings, give Craig Aco at five
sixty three three three two twenty twohundred and he will give you instructions on
how to participate in these meetings.Last week here on Saved Money I reference

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developing habits are prolonged life. Theresearchers found that the following habits were linked
to a substantially longer lifetime. Firstof all, being physically active, second,
being free from opioid addiction, third, not smoking, fourth and managing

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stress. Five is having a gooddiet, six is not regularly binge drinking,
and seven is having good sleep hygiene. Now, having positive social relationships
is another habit which helps prolong life. Having positive social relationships. Research has

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discovered that men who have adopted allof these habits by the age of forty
are predicted to live an average oftwenty four years longer than men who have
not adapted these habits. Women whohave all these habits will live a predicted
twenty one years longer than women withnone of these habits, according to the

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findings of this study. You know, during these past couple weeks are on
Safe Money, we have been talkingabout the risk we face with retirement and
especially the risk to our assets withthe costs of health care and especially the

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costs of long term care. Wedefined out, We defined what long term
care costs are, and we discussthat long term care costs are expensive and
are not covered by Medicare and notcovered by most Medicare supplements in our area.

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In the Dave Import and surrounding area, the cost of in home health
aid the cost is over six thousand, six hundred dollars per year. Wow.
Six thousand, six hundreds the costof home health A. Now let's

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look at facility costs. Adult adultdaycare adult day healthcare facility such as assisted
living. The cost is just alittle less than five thousand dollars per month.
Five thousand dollars per month. Mygosh, that's sixty thousand dollars a

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year. So that's the cost oflong term care in this area. For
a nursing home, a semi privateroom costs over eighty two hundred dollars eight
two hundred dollars. For a semiprivate room in a nursing home facility,

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a private room in a nursing homefacility costs over nine thousand, five hundred
dollars per year. Boy, thoseare big bucks. So I believe that
in planning for retirement, or indoing some additional planning when we are retired,

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we need to plan for long termcare. Long term care is a
risk. It's a risk, especiallyfor spouses. And I say that because
if one spouse becomes disabled, andif one spouse is receiving long term care,

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those costs are paid for by bothof them. So if the disabled
spouse incurs a lot of those expenses, then those expenses are paid for oftentimes
by the resources which are available forboth spouses. So if that one spouse
then who is disabled, deceases,then oftentimes, prior to that decease,

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a lot of those resources are absorbedby the costs of long term care.
So I believe that the Medicare advantageplans offer a significant savings on Medicare premiums.
I believe the savings and Medicare premiumsare available to allow us to protect

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our assets from long from the highcosts and healthcare risk, and especially those
risks associated with long term care.So those costs are reflected in the costs
will incur by using care provided byhome health care givers. These caregivers are

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not paid or insured by Medicare.Caregivers are not paid or insured through Medicare
supplements. They are not paid foror insured by Medicare advantage plans. So
how do we pay for long termcare? People pay for long term care

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in different ways, these including individualsor their families personal resources. They pay
for it with long term care insuranceand from some help in for Medicaid for
those who qualify for Medicaid. MedicareMedicare Supplement and Medicare advantage plans do not

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pay for long term care. SoI really want to emphasize and encourage you
listeners as you do your retirement planning, is that you consider making some plans
for long term care. Most peopleI talk with assume that the government will

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pay for these costs now. Medicaidis the government funded program that does pay
for nursing home care only for individualswho are low income and and who have
spent most who have spent most oftheir assets. Medicare pays for nearly a

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third of all nursing home care inthe United States, but many people who
need long term care never never qualifyfor Medicare assistance Medicaid. Medicaid also pays
for some home and community based services. To get Medicaid help, you must

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first meet federal and state guidelines forincome and assets. Many people start paying
for long term care out of theirown money and spend down their income and
their assets until they are eligible forMedicaid. Medicaid then helps pay part of

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your nursing home costs. You mayhave to use up most of your assets
paying for your long term care beforeMedicaid is able to help. You may
also keep some assets at income fora spouse who stays at home, but

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you may be able to keep someof your assets if your long term care
insurance is approved by a state andas long term care, especially for those
long term care partnership policies. Boththe state of Iowa and the state of
Illinois are partnership states. That meansif the insurance company that issues a long

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term care policy and personal assets areprotected, so those are the partnership states
in both Iowa and Illinois or partnershipstates. The bottom line is that long
term care insurance is one way tohelp protect our assets from the high costs

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of long term care. There areother ways to help pay the cost of
long term care. Specifically, somelife insurance policies provide for the use of
the insurance benefit on life insurance theyprovide they allow that benefit for long term
care costs. The problem with thismethod of addressing long term care costs is

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one needs to qualify for the longterm care insurance first. Often, by
the time we consider long term carecosts as a risk for our retirement savings,
we are at an age where weare no longer ensurable. But the
fact remains, folks, long termcare costs are a risk, and they

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are a risk to our receiver orto our retirement savings and money that we
saved, money that we've Accumulatedly truefor married couples, if one spouse receives
long term caere then that asset,whether life insurance or the annuity, is

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lowered and lowered considerably. Deferred annuitywill often help let you withdraw some of
the value to pay long term carecosts expenses without paying a surrender charge.
Another type of built in benefit paysfor long term care expenses after you spent

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the value of that annuity on thesecosts. For example, suppose you have
a deferred annuity that is for onehundred thousand dollars. So after you have
spent the one hundred thousand dollars ofyour money for the long term care costs,
then the annuity would pay a fixedamount towards any future long term care

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expenses limited to that one hundred thousanddollars of benefit. So that's a way
of providing for doubling the doubling andprotecting the expenses that you incur for long
term care purposes. So with eitheroption, it's important to remember that using

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money from your life insurance or moneyfrom your annuity to pay for long term
care costs will have other effects.For example, if you use a deferred
annuity to cover long term care expenses, you have less money in that annuity.
So if you use money from yourlife insurance policy to pay for long

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term care, then your beneficiary wouldreceive a smaller death benefit. So if
your suppose your policy has one hundredthousand dollars death benefit and you use you
use sixty thousand dollars of that onehundred dollars for long term care expenses,
then your beneficiary will get a fortythousand dollars death beenefity, not a one

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hundred thousand dollars death benefit. Sothe bottom line, folks, is the
cost for long term care is expensiveand it is a risk, and sometimes
we need to consider that risk inour planning. Sometimes a combination of these

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plants, a combination of long termcare insurance combined with life insurance or an
annuity may be best. But thebottom line is long term care costs are
a risk and we need to considerthese risks. So keep in mind who

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pays the cost of long term care. The bottom line is costs of long
term care are a risk, andit's a risk that we need to consider.
Look at the costs of long termcare in this area, in this
region, in Damoport to Rock Islandand region and surrounding regions. The cost

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for a home health aid is oversix thousand, six hundred dollars per year.
Boy. If we consider that ahome health aid cost of maybe twenty
five dollars an hour, Boy,that adds up pretty quickly, and the
average cost of a home health aidis over six thousand dollars per year.

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Now, an assisted living facility,the average cost of assisted of assisted living
in this area of Scott County,this area of Rock Island County and the
surrounding counties, the cost for assistedliving is just a little less than five
thousand dollars per year. My gosh, five thousand dollars per that's a lot

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per month. That's over four hundreddollars per month. Think about that four
one hundred dollars as a debt thatneeds to be paid for services, and
that debt is associated to us,either individually or as spouses. How do

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we address that risk? The riskof long term care. The ways we
address that is that first of all, there is availability of long term care
insurance. Secondly, there is theavailability of some specialized annuities. Some special

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annuities which are arranged for long termcare purposes will double the resource so will
double the assets that you have.For example, if you have one hundred
thousand dollars in a long term careannuity, the first one hundred thousand dollars
on that annuity would be absorbed bypaying long term care expenses. Now when

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that one hundred thousand dollars is gone, then there's an additional one hundred thousand
dollars which are set aside by thatinsurance company in order to pay for those
expenses. So long term care annuityis a very very valid planning resource,
and so I consider you take alook at that. If you have not

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made plans for long term care,if you're married, you have a spouse,
well, you need to look intomaking plans for long term care.
Home health care is a expense.The average home health care is just a

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little less send six six thousand,six hundred and seventy three dollars per month.
Boy, that's a big hole inour assets. An assisted living center,
for a assisted living facility, theaverage cost in these areas that have

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import Rock Islands surrounding county area isjust a little bit less than five thousand
dollars. So that's a lot ofmoney, and that's a risk to our
assets and we need to make someplans, and we can make those plans
by considering either long term care insurance. The long term care insurance is expensive,

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but what it protects, it protectsyour resources. So I encourage you
to consider long term care insurance.Now, long term care insurance, it
used to be when I first starteddoing long term care business, there used
to be a lot of companies thatoffer long term care insurance. Now to

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day, there are very few companiesthat issue long term care insurance, and
underwriting for long term care insurance isexcessive. And oftentimes when a person applies
for long term care insurance, theyare not accepted for long term care insurance

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for one reason or another. Soif you have long term care insurance now,
boy, I give you credit forhaving that. That's a wonderful planning
strategy to have in place, especiallyfor merried couples. Now, if you
don't have long term care insurance inplace to day, then I encourage you
to look at some of these otherresources. As I mentioned, we have

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life insurance policies to day that providea benefit for long term care. Now,
those life insurance policies must be specificfor long term care purposes, and
the way that works as a portionof that death benefit on the life insurance
policy is used for long term carepurposes. So if I have one hundred

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thousand dollars of long term care lifeinsurance, and if I spend sixty thousand
dollars of that one hundred thousand dollars, then at my death, my survivor
would receive the balance. The balancewould be reduced by that sixty thousand dollars

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used for long term care costs,and so I would only have a forty
thousand dollars benefit that would be payableto my spouse. So the resources that
are available for long term care costsor first of all, long term care
insurance, if you qualify for longterm care insurance, it's some thing really

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really to look at. Secondly,some life insurance policies now you have to
qualify for that life insurance as well. But life insurance is a is a
wonderful asset to have to help withthose costs of long term care. Some
annuities, long term care annuities,are specifically designed for long term care purposes,

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so I encourage you to take alook at those. We have long
term care insurance, we have longterm care annuities, or we have long
term care life insurance which you mayqualify, and sometimes a portion of each
of those is the best way toprotect against long term care costs. Costs

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of long term care are at risk, and they are a risk, especially
for married couples. Encourage you totake a look at that. If you
have not done long term care planning, I encourage you to take a look
at that. Give me a call, or give Craig a call. Call
us at five sixty three three threetwo twenty two hundred, or send us

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an email. Go to my website, go to Dickshilly dot com and scroll
over to our contact ICN for ouremail address and send me a note via
email. Be happy to talk withyou, Be happy to offer you some
suggestions or some planning strategies for longterm care. Long term care is something

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that most of us think about,but most of us also think about that
it will never happen. It willnever happen to me. I will never
have long term care expenses. Butyou know what most of the people who
are receiving long term care expenses havesaid. Some have said much of the

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same thing during the course of theirlifetime. So I encourage you to take
a look at that long term careis a risk and long term care costs
are a real risk. So againI want to remind you that we have
our community meetings coming up here ina couple of weeks. Up Coming up
here on July sixteenth, we talkabout the basics of Medicare and then focus

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on the Medicare supplements that are availablefor these Medicare regions. Two days later
and our virtual community meeting on Julyeighteenth, ten o'clock in the morning,
Greg again talks about the basics ofMedicare and then focuses on the Medicare advantage
plans that are available in these Medicareregions. So give us a call again

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five six three three three two twentytwo hundred. Have a great, great
weekend, good day for now,