Protecting your most important asset: Your family
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Protecting your most Protecting your most important asset: important asset: Your family Your family
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Protecting your most important asset: Your family. The agenda…. Why a plan for long-term care must be considered and what the consequences are if you don’t Developing a plan to protect your family and finances What will pay for that plan. My goals are to…. - PowerPoint PPT Presentation
Transcript of Protecting your most important asset: Your family
Protecting your most Protecting your most important asset:important asset:
Your familyYour family
Protecting your most Protecting your most important asset:important asset:
Your familyYour family
The agenda…The agenda…
Why a plan for long-term care must be considered and what the consequences are if you don’t
Developing a plan to protect your family and finances
What will pay for that plan
Why a plan for long-term care must be considered and what the consequences are if you don’t
Developing a plan to protect your family and finances
What will pay for that plan
My goals are to…My goals are to…
Give you insight into the consequences your needing care over a period of years could have, not on you, but those you love
Speak to the consequences an illness will have on your best thought out retirement plan
Discuss the options for protecting both your family and finances should you need care over a period of time
Give you insight into the consequences your needing care over a period of years could have, not on you, but those you love
Speak to the consequences an illness will have on your best thought out retirement plan
Discuss the options for protecting both your family and finances should you need care over a period of time
Living a long life could Living a long life could
well be in your future…well be in your future…
Planning for it is now a necessityPlanning for it is now a necessity
Living a long life could Living a long life could
well be in your future…well be in your future…
Planning for it is now a necessityPlanning for it is now a necessity
I believe that reasonable people… I believe that reasonable people…
Understand they could live a long life
Believe that it’s possible they could become frail and need care if they age
Are willing to consider taking action if they understand that needing care could have serious consequences to their family and retirement portfolio
Understand they could live a long life
Believe that it’s possible they could become frail and need care if they age
Are willing to consider taking action if they understand that needing care could have serious consequences to their family and retirement portfolio
That said, I’ve had That said, I’ve had
clients tell me…clients tell me…
That said, I’ve had That said, I’ve had
clients tell me…clients tell me…
“That’s true but…”
“What if I don’t live a long life? Very few in my family made it past their 70’s”
Or…
“Even if I do live a long life, what if I don’t need care? Everyone in my family was healthy until the day they died”
“That’s true but…”
“What if I don’t live a long life? Very few in my family made it past their 70’s”
Or…
“Even if I do live a long life, what if I don’t need care? Everyone in my family was healthy until the day they died”
To which I have responded…
You very well may be right…
The risk of dying at an early age may be high and or…
The risk of needing care may be low because of your family history
To which I have responded…
You very well may be right…
The risk of dying at an early age may be high and or…
The risk of needing care may be low because of your family history
But have you thought about
the consequences to those you love if
you ever did live a long life and
needed care over a period of years?
But have you thought about
the consequences to those you love if
you ever did live a long life and
needed care over a period of years?
Not that it will happen
to you, but here’s what
causes the need for
extended care…
Not that it will happen
to you, but here’s what
causes the need for
extended care…
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A chronic debilitating medical condition Is an illness or illnesses that can be managed, not cured.
They compromise your ability to get through the most basic daily functions
A cognitive impairment Is a marked deterioration in your intellect making it difficult
if not impossible for you to safely interact with your environment
Both conditions require custodial, not medical, care
A chronic debilitating medical condition Is an illness or illnesses that can be managed, not cured.
They compromise your ability to get through the most basic daily functions
A cognitive impairment Is a marked deterioration in your intellect making it difficult
if not impossible for you to safely interact with your environment
Both conditions require custodial, not medical, care
…and here’s what they do to
the emotional and physical
wellbeing of your family…
…and here’s what they do to
the emotional and physical
wellbeing of your family…
By definition, long-term care is a safety issue which means that providing care or supervising movement quickly becomes all consuming
This 24 hour responsibility has a direct impact on the caregiver’s emotional and physical wellbeing which inevitably…
Forces a child to step in causing her to re-orientate her life
By definition, long-term care is a safety issue which means that providing care or supervising movement quickly becomes all consuming
This 24 hour responsibility has a direct impact on the caregiver’s emotional and physical wellbeing which inevitably…
Forces a child to step in causing her to re-orientate her life
Put simply, if you ever need care over a period of years your life won’t end…
Put simply, if you ever need care over a period of years your life won’t end…
Someone else’s life will likely endSomeone else’s
life will likely end
A thought…A thought…
Did you notice there was no mention about nursing home care?
That’s because the real damage to the family begins not when a placement is made…
But when the decision is made to keep the person they love at home
Did you notice there was no mention about nursing home care?
That’s because the real damage to the family begins not when a placement is made…
But when the decision is made to keep the person they love at home
Does anyone know why families Does anyone know why families struggle, often against the odds, to struggle, often against the odds, to
keep someone at home?keep someone at home?
Does anyone know why families Does anyone know why families struggle, often against the odds, to struggle, often against the odds, to
keep someone at home?keep someone at home?
Because making a Because making a placement breaks your heartplacement breaks your heart
Because making a Because making a placement breaks your heartplacement breaks your heart
How a plan can
protect your family
How a plan can
protect your family
The plan has 2 objectivesThe plan has 2 objectives The first is to allow you to remain in the community
without risking the emotional and physical wellbeing of those who will provide your care
The second is to preserve your retirement plan so it can execute for the purposes you intended which generally include Generating income to support your lifestyle Minimizing taxes Insuring the financial viability of your surviving
spouse
The first is to allow you to remain in the community without risking the emotional and physical wellbeing of those who will provide your care
The second is to preserve your retirement plan so it can execute for the purposes you intended which generally include Generating income to support your lifestyle Minimizing taxes Insuring the financial viability of your surviving
spouse
Paying for your plan…Paying for your plan…
How paying for care can
impact your retirement portfolio
How paying for care can
impact your retirement portfolio
During working years…During working years… A portfolio is created and funded that will
accomplish two critical goals…
Help defray the cost of college
And assure lifestyle during retirement
During working years your ability to guarantee there will be enough income to fund the portfolio as well as meet normal expenses…
A portfolio is created and funded that will accomplish two critical goals…
Help defray the cost of college
And assure lifestyle during retirement
During working years your ability to guarantee there will be enough income to fund the portfolio as well as meet normal expenses…
Is guaranteed by Is guaranteed by
an insurance portfolioan insurance portfolio
Is guaranteed by Is guaranteed by
an insurance portfolioan insurance portfolio
Asset Portfolio & Income Protection PortfolioAsset Portfolio & Income Protection Portfolio
Automobile
Family
Wealth
House
Salary
Automobile
Family
Wealth
House
Salary
Auto insurance
Life & health insurance
More life insurance
Home owners insurance
Disability income
Auto insurance
Life & health insurance
More life insurance
Home owners insurance
Disability income
The question atThe question at
retirement becomes…retirement becomes…
The question atThe question at
retirement becomes…retirement becomes…
What is protecting your retirement portfolio which will
be generating income?
What is protecting your retirement portfolio which will
be generating income?
Alan & Camille are 43 years Alan & Camille are 43 years old. They have 2 children…old. They have 2 children…Alan & Camille are 43 years Alan & Camille are 43 years old. They have 2 children…old. They have 2 children…
Their combined income is $200,000 per year
The house is worth $850,000. It has a mortgage of $200,000
Their retirement portfolio is just under $500,000
One child is in private school, the other in college
In addition they belong to a club, have modest credit card debt and purchase a car every 5 years
Their combined income is $200,000 per year
The house is worth $850,000. It has a mortgage of $200,000
Their retirement portfolio is just under $500,000
One child is in private school, the other in college
In addition they belong to a club, have modest credit card debt and purchase a car every 5 years
Alan dies suddenly
of a heart attack
Alan dies suddenly
of a heart attack
What has been allocated from theWhat has been allocated from the
retirement portfolio and/or equity inretirement portfolio and/or equity in
the house to pay for the continuingthe house to pay for the continuing
obligations his wife will face?obligations his wife will face?
What has been allocated from theWhat has been allocated from the
retirement portfolio and/or equity inretirement portfolio and/or equity in
the house to pay for the continuingthe house to pay for the continuing
obligations his wife will face?obligations his wife will face?
Nothing…Nothing… Alan purchased life insurance
Alan didn’t think he would die during working years. In fact, statistically he was correct
He knew, however, that even though the risk might be low, the consequences would be catastrophic to his family
Alan purchased life insurance for the same reason everyone purchases life insurance…
Alan purchased life insurance
Alan didn’t think he would die during working years. In fact, statistically he was correct
He knew, however, that even though the risk might be low, the consequences would be catastrophic to his family
Alan purchased life insurance for the same reason everyone purchases life insurance…
He loved his familyHe loved his family
The couple make it to 78…The couple make it to 78…The couple make it to 78…The couple make it to 78…
Their house is paid off and worth $1,500,000. Their portfolio, worth $1,500,000, generates $75,000. When added to their social security they gross $100,000 per year
His passion is golf. Camille rides horses. Both love to travel and they have a house in Florida
They have a child who has not made the best decisions and are helping to pay for their grandchildren’s education
Their house is paid off and worth $1,500,000. Their portfolio, worth $1,500,000, generates $75,000. When added to their social security they gross $100,000 per year
His passion is golf. Camille rides horses. Both love to travel and they have a house in Florida
They have a child who has not made the best decisions and are helping to pay for their grandchildren’s education
Camille is diagnosedCamille is diagnosed
with Alzheimer’swith Alzheimer’s
Camille is diagnosedCamille is diagnosed
with Alzheimer’swith Alzheimer’s
What has been allocated fromWhat has been allocated from
the retirement portfolio and their the retirement portfolio and their income to pay for her care over the income to pay for her care over the
next 8 to 10 years?next 8 to 10 years?
What has been allocated fromWhat has been allocated from
the retirement portfolio and their the retirement portfolio and their income to pay for her care over the income to pay for her care over the
next 8 to 10 years?next 8 to 10 years?
All of it
Where else can the
funds come from?
All of it
Where else can the
funds come from?
Alan is now faced with how to
pay for his wife’s custodial care.
He looks into…
Alan is now faced with how to
pay for his wife’s custodial care.
He looks into…
Medicare, but finds it won't pay for custodial care
The VA, but again is told it’s not an option given his assets and income
Medicaid and this time he learns it will pay for custodial care, but almost exclusively in a nursing home. Alan promises himself it’s the last option but wants to know what would happen if he needed the program. He finds out…
Medicare, but finds it won't pay for custodial care
The VA, but again is told it’s not an option given his assets and income
Medicaid and this time he learns it will pay for custodial care, but almost exclusively in a nursing home. Alan promises himself it’s the last option but wants to know what would happen if he needed the program. He finds out…
That to qualify for benefits he would have to give his assets away
The problem is that they consist of low cost based investments and qualified funds the gifting of which would create substantial taxes. In other words…
Medicaid is not free
That to qualify for benefits he would have to give his assets away
The problem is that they consist of low cost based investments and qualified funds the gifting of which would create substantial taxes. In other words…
Medicaid is not free
In an effort to preserve his income and assets he provides the care himself creating an unintended consequence that will end up devastating his children…
His heath starts to fail to the point where a child has no choice but to step in and assist
What does that do to her health and the relationship with siblings who do not help out?
In an effort to preserve his income and assets he provides the care himself creating an unintended consequence that will end up devastating his children…
His heath starts to fail to the point where a child has no choice but to step in and assist
What does that do to her health and the relationship with siblings who do not help out?
Camille has Alzheimer’s…
Camille has Alzheimer’s…
Her husband and
children suffer from it
Her husband and
children suffer from it
Finding the right solution:Finding the right solution:
Looking at long-term care Looking at long-term care insurance as an essential tool insurance as an essential tool which protects your family and which protects your family and
retirement portfolioretirement portfolio
Looking at long-term care Looking at long-term care insurance as an essential tool insurance as an essential tool which protects your family and which protects your family and
retirement portfolioretirement portfolio
How many believe the product protects them if they need care over
a period of years?
How many believe the product protects them if they need care over
a period of years?
It doesn’tIt doesn’tIt doesn’tIt doesn’t
It protects your family…It protects your family… It allows your spouse to maintain her relationship
with you as a spouse who supervises rather than provides care
And by doing so…
It allows your children to maintain their lives which has the added benefit of…
Keeping them close by keeping them apart
It allows your spouse to maintain her relationship with you as a spouse who supervises rather than provides care
And by doing so…
It allows your children to maintain their lives which has the added benefit of…
Keeping them close by keeping them apart
……and it makes this possible notand it makes this possible not
by protecting assets, but ratherby protecting assets, but rather
by providing a stream of incomeby providing a stream of income
which pays for that carewhich pays for that care
……and it makes this possible notand it makes this possible not
by protecting assets, but ratherby protecting assets, but rather
by providing a stream of incomeby providing a stream of income
which pays for that carewhich pays for that care
And that creates…
The Cascade Effect
And that creates…
The Cascade Effect
By paying for care…
Your primary source of income generated by your retirement portfolio is guaranteed which means…
Your ability to support your lifestyle which
includes commitments to your family and community is guaranteed
By paying for care…
Your primary source of income generated by your retirement portfolio is guaranteed which means…
Your ability to support your lifestyle which
includes commitments to your family and community is guaranteed
Since care is covered it guarantees that investments which were not allocated to pay for care remain in place. This has two desired results…
It eliminates unnecessary taxes and…
Preserves your estate for your surviving spouse
and children who may depend on an inheritance
Since care is covered it guarantees that investments which were not allocated to pay for care remain in place. This has two desired results…
It eliminates unnecessary taxes and…
Preserves your estate for your surviving spouse
and children who may depend on an inheritance
“But I’ve been told I have
enough assets to pay for the
cost of long-term care”
“But I’ve been told I have
enough assets to pay for the
cost of long-term care”
From this point, I would like From this point, I would like you to consider that income,you to consider that income,
not assets pay for care not assets pay for care
From this point, I would like From this point, I would like you to consider that income,you to consider that income,
not assets pay for care not assets pay for care
$1,000,000 = $50,000
$1,500,000 = $75,000
$2,000,000 = $100,000
$2,500,000 = $125,000
$1,000,000 = $50,000
$1,500,000 = $75,000
$2,000,000 = $100,000
$2,500,000 = $125,000
And most if not all of that And most if not all of that income is committed to lifestyleincome is committed to lifestyle
And most if not all of that And most if not all of that income is committed to lifestyleincome is committed to lifestyle
Take a sheet of paper…Take a sheet of paper… Draw a line down the middle…
On the left write: “Estimated Income”
On the right: “Estimated Expenses”
Your income is $85,000
What do you think your expenses are?
Draw a line down the middle…
On the left write: “Estimated Income”
On the right: “Estimated Expenses”
Your income is $85,000
What do you think your expenses are?
Where is the income going to come from to pay for care?
Where is the income going to come from to pay for care?
One more thought about One more thought about using assets to pay for care…using assets to pay for care…
One more thought about One more thought about using assets to pay for care…using assets to pay for care…
Taxes on liquidating low cost based assets and qualified funds
What if the market is down when assets have to be sold?
How much of your portfolio is liquid
What happens to income if assets have to be used?
Taxes on liquidating low cost based assets and qualified funds
What if the market is down when assets have to be sold?
How much of your portfolio is liquid
What happens to income if assets have to be used?
““Maybe, but I’ve been told that if IMaybe, but I’ve been told that if I
need care I won’t have much of aneed care I won’t have much of a
lifestyle, so the money saved canlifestyle, so the money saved can
be used to pay for care”be used to pay for care”
““Maybe, but I’ve been told that if IMaybe, but I’ve been told that if I
need care I won’t have much of aneed care I won’t have much of a
lifestyle, so the money saved canlifestyle, so the money saved can
be used to pay for care”be used to pay for care”
It stopped being yourIt stopped being your
lifestyle, the day you got lifestyle, the day you got
married and had childrenmarried and had children
It stopped being yourIt stopped being your
lifestyle, the day you got lifestyle, the day you got
married and had childrenmarried and had children
Some final thoughts…Some final thoughts…
Successful people who love someone, purchase life insurance not because they think they are going to die during working years
They buy it because of the consequences to those they love if they ever did
Successful people who love someone purchase long-term care insurance not because they expect to need care…
Successful people who love someone, purchase life insurance not because they think they are going to die during working years
They buy it because of the consequences to those they love if they ever did
Successful people who love someone purchase long-term care insurance not because they expect to need care…
They buy it because of the They buy it because of the consequences to those they consequences to those they
love if they ever didlove if they ever did
They buy it because of the They buy it because of the consequences to those they consequences to those they
love if they ever didlove if they ever did
