Archive for Long Term Healthcare Planning

Elder Care

No one enjoys the thought of needing assistance in their later years. The issue comes up when thinking of oneself or their parents. Naturally, everyone hopes they live a full, active life until 105, go to bed one night, fully asleep, and die in their sleep without any pain.

Practically and logically speaking, that may not be reasonable. The second-best option us to stay at home with some simple assistance to live out our final days. Here again, we do not make that choice.

When planning for our “away from home care” there are a few options that are being used more: Continuing Care Community (ccc), or Lifecare Community (LCC).
In a CCC, there are lower entrance fees, but, when one needs more care in the future, costs really escalate, and one may have to leave due to affordability. In an LCC, costs stay the same as one moves to higher levels of care. Now in most cases, one must be healthy enough to enter, and have a reasonable expectation of living independently for at least 5 years before needing higher care. The fees are higher than in a CCC, but no surprises when one needs extra help.

Checklist for Family Caregivers

People avoid thinking about taking care of family members until after the fact. There are so many things to take into consideration.
Sally Balch Hurme has come to the rescue again with her third book, Checklist for Family Caregivers: A Guide to Making it Manageable

The forms are available for free at The book costs $17 and is worth its weight in gold.

(1) Thought Mom may need a CPA? Maybe a daily money manager would be better (
(2) Not sure how to manage money yourself? Checkout
(3) Hiring a sitter for mom?
Chapter 6 will layout important info.
(4) You cannot get a power of attorney over someone; it has to be given to you.

The checklists do not solve everything. So, go to for standards of practice. Lastly, Virginia Morris wrote How To Care for Your Aging Parents which is so helpful.

Long Term Care- Holding from the Truth

I visit with people daily on their financial planning needs. In the majority of cases when the subject of Long Term Care (LTC) comes up people run from the subject like a child does when having to eat spinach.

The statistical evidence is there. We are all living longer and some type of care will be needed in our later years. The retort by most people is… I’ll deal with the LTC when it happens. That is like the person who says they will quit smoking after their lung is removed laden with cancer.

The longer one waits to do something then the more expensive it will be. There has been a revolution in alternatives to LTC coverage that we assist clients with on a daily basis. This article from Barron’s on April 13, 2015 “Protect Your Future” is a great summary that will be beneficial to you and your family.

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Alternatives to High Health Premiums

President Obama promised a $2,500 annual premium savings for a family with his ObamaCare program. The costs, for most families have been more than $5,000 higher than they were originally paying. Wow! That amounts to $7,500 more than was promised. For 2015 it appears premiums will rise another 25%. So those big mean, terrible insurance plans of the pasts were really not so bad!

Here are some ideas to soothe the pain a little for you.

• Set up a Health Savings Account.

    (1) You can set aside $3,300/year for an individual or $6,550/year for a family. If you are 55 or older you can add $1,000 extra per year. It is deductible going in, it grows tax free and when you take it out for qualified medical expenses it is tax free.

    (2) If you put away $6,500/year starting at 45 and increase it to $7,500 at 55, by the time you are 80, with a 4% growth it will be worth $660,000. This amount can be helpful in your retirement years for health costs including Long Term Care.

    (3) The tax benefits are helpful. If you have maxed out your 401k, or, want to divert those 401k contributions to your HSA it may not be a bad idea.

    (4) An HSA would allow you to lower your health premiums by purchasing a high deductible plan.

• Concierge Plan

    (1) For $1,800/year in Florida up to $2,500/year in New York you get access to your physician 24/7/365

    (2) Each appointment is 1 hour, no rushing, and, a better physical

    (3) You can contact the doctor by email or phone when you need

    (4) You still need a basic health insurance policy to cover office visits

    (5) This concierge fee is an extra costs on top of your health insurance

• Get into a Wellness program, lose weight, cut down on fatty foods and reduce alcohol consumption. People that have done theses few things have lowered their medical visits and costs.

Alternatives to Long Term Care

“Age Wave” has found that people underestimate how long they will live. They also underestimate their need for Long Term Care (LTC). That is, 37% think they’ll need it, but 70% actually do and only 8% have any coverage.

The issues with typical LTC policies are: They are expensive, premiums continue to rise, areas of coverage are being dropped and some companies have just cancelled policies.

The two types of coverage are:

    (1) Use it or lose it. You pay a premium for a specific amount of coverage. If you never use it the money is just gone. Premium cost for a healthy 59 year old is $6,000 per year to develop a pool of $328,000 with a maximum of $300/day.

    (2) A Hybrid policy. You pay an initial lump sum for a certain amount of care later. No further annual payments. You can get your premium money back after a time, or, your heirs can get two times your principle amount if you die before using the insurance, or, you could get up to 5 times the principle payment in LTC benefits.

Keep in mind for your planning… the median cost for a private room in New York City is $170,000 per year. In Florida, the median is $90,000 per year.

The best time to start planning and to take action is in your 40’s and 50’s.

Another family approach is, say, you are in a nursing home that costs $200,000 per year for 20 years, then, you will spend $4 million of your own money. Many parents will buy a $4 million life policy on themselves, then, upon their death the family gets the $4 million, tax free from the insurance. Since their estate has been dwindled by the $4 million of LTC costs.

Our favorite approach is a multi approach hybrid policy. The primary purpose is to be used to generate TAX FREE retirement income. It can also be used to pay for LTC, should it arise, and lastly, it can pay family members a tax free death benefit.

So, if you are in your 40’s, 50’s or 60’s contact us on the best option for yourself.