All At One Financial

Long Term Care Insurance

Life and health insurance policy concept idea. Finance and insurance.

Long Term Care Insurance Home Blog Long Term Care Insurance Long Term Care Insurance Look at the following statistics. If they don’t scare you into taking a long look at obtaining some kind of long-term care insurance (LTCI), nothing will. On average, 69% of people age 65 or older will need some form of long-term care (according to www.longtermcare.gov). The average daily cost of a private nursing home room in 2018 was $275 a day or $100,375 annually (private room).* The average daily cost of an assisted living care facility in 2018 was $132 a day or $48,180 annually (private room).* However, in some states the cost for nursing home care is much higher: Alaska ($907 per day), New York ($401 per day), CT ($452 per day), California ($323 per day), and Pennsylvania ($333 per day).* Americans who are 65 years old and older and have incomes greater than $20,000, only 16% have LTC insurance. “Failure to prepare for the cost of a nursing facility stay or other long-term care is the primary cause of impoverishment among the elderly.” (The American Health Care Association, 1997)   Do you have LTCI? Based on the statistics, we know for most the answer is NO. Should you have LTCI? Based on the statistics, we know the answer is YES! If the average cost of a nursing home stay is over $100,000 a year, how many years do you have to stay in that home before spending a good percentage, if not all, of your wealth? Why don’t people purchase LTCI? There are really two reasons people do not buy LTCI. 1) Cost. It can be expensive. 2) Need. Many people have the “it won’t happen to me” attitude when it comes to the need for LTC expenses. The sad truth is that the people who buy LTCI are people who have had a loved one or a friend who felt the devastating effects of LTC costs and didn’t have LTCI. What does LTCI cover? It depends on the policy purchased. Some cover only nursing home care while others cover in-home care as well as a number of other expenses. The coverage will have a limit (usually a daily or monthly limit). What triggers LTCI coverage to kick in? Typically, it’s when you can’t perform “2 of 6 ADLs.” ADL stands for activities of daily living: Bathing, Dressing, Toileting, Transferring, Continence, and Eating without help. LTCI options There are several different ways to obtain LTCI coverage. Depending on your situation, one may be better for you than another. Traditional LTCI—this is the best but also the most expensive type of LTCI. You pay an annual premium of $2,500-$10,000+ a year (depending on your age); and if you incur LTC expenses, the policy will pay up to its daily limit. Traditional LTCI is like term life insurance. If you don’t use it, you do not get the premiums back. Single-Premium Life Insurance policies that have LTC benefits—most people are not aware of the fact that they can purchase a life insurance policy that has an LTC benefit. Why would you purchase this type of policy? Because if you have LTC costs, the policy will pay and if you ever need the money you paid in premiums, it’s accessible. That’s right. If you paid a $200,000 one-time premium for a policy and needed the money in years two, three, or whenever, you could ask the insurance company for a refund of your entire premium. Additionally, some policies grow money in the policy similar to money market/certificate of deposits. This type of policy is a good fit for an older client who has money sitting in CDs and money market accounts because they think they may need the money someday and, therefore, do not want to allocate it to buying traditional LTCI. To view/listen to a video presentation on SPL policies, please click on the picture below. https://www.youtube.com/watch?v=XHOmBV4js_E Retirement Life™ (RL) as you can read by clicking here, growing wealth through the use of RL can be a terrific idea for many. A nice byproduct of using an RL policy is that the policy comes with a FREE chronic illness rider. Essentially, if you can’t perform 2 of 6 ADLs, the insurance company will give you 2% of your death benefit early (tax-free). This type of coverage is not as good as a traditional LTCI policy; but if you are buying a policy to build wealth, why not buy one with a FREE chronic illness benefit? Deducting the cost for LTCI Most people do not know how to write off traditional LTCI premiums. While not everyone can do so, some can. If you would like to learn how to obtain a 100% deduction for LTCI premiums, please click here. We hope that after reading this material you are sufficiently motivated to learn more about LTCI. Our firm specializes in helping clients find the right LTCI benefit at the lowest possible cost. If you would like help, please click here to email us or phone 812-774-5829. To sign up for a free consultation or to just get more information click here. Related Post Safe Money Tools Safe Money Tools Home Blog Safe Money Tools Safe Money… Read More Jonathan MorenoOctober 5, 2024 More Information on Cash Value Life Insurance More Information on Cash Value Life Insurance Home Blog More… Read More Jonathan MorenoOctober 5, 2024

412(e)3 Defined Benefit Plans

Insurance policy

412(e)3 Defined Benefit Plans Home Blog 412(e)3 Defined Benefit Plans 412(e)3 Defined Benefit Plans A New Twist On An Old Friend A 412(e)3 Plan is a special type of Defined Benefit Plan.  This plan works almost exactly the same way as the typical Defined Benefit Plan, except for one important twist.  The benefit in retirement is Guaranteed!  That’s right.  If you construct a 412(e)3 Plan to provide you with a monthly benefit of $10,000 per month in retirement, it is guaranteed to be at least that high. The 412(e)3 Plan purchases annuities from insurance companies that offer guarantees of 3%, 4%+ a year.  With a 3% return guaranteed, the IRS allows you to use the 3% return in your calculation of the future value of the plan.  With a regular Defined Benefit Plan, the amount of tax-deductible contributions the owner can make assumes a non-guaranteed return of 5%-7%. However, with a 412(e)3 Plan, the amount of tax-deductible contributions the owner can make uses a  much lower 3% return.  Because the interest rate is lower, in order to achieve the defined benefit, more contributions will be required, creating a higher tax deduction. In fact, the 412(e)3 Plans allow for significantly more in tax-deductible contributions annually.  For example, we mentioned what you, at 50 years old, could contribute with a regular Defined Benefit Plan in the section on Defined Benefit Plans.  In that situation, you could deduct $125,000.  With a 412(e)3 Plan you could make substantially larger tax-deductible contributions ($190,000 a year or more) into a 412(e)3 Plan annually. Note that your annuities most likely will make more than the 2-3% guaranteed return. But the amount of your contributions is based upon the guaranteed amount. These plans have pumped new life into Defined Benefit Plans, but you must be careful.  The IRS has already commented on abuses of 412(e)3 Plans, so you need only the most highly trained advisors to guide you through these, and other treacherous waters in retirement planning. Cash Balance Defined Benefit Plans If you think Defined Benefit Plans sound interesting, you need to learn about the even more powerful and flexible Cash Balance Plan. To learn more, please click here. Is a Defined Benefit Plan the appropriate choice for you and your business? If you feel the clock ticking, please click here to email us or phone 812-774-5829. To sign up for a free consultation or to just get more information click here. Related Post Long Term Care Insurance Long Term Care Insurance Home Blog Long Term Care Insurance… Read More Jonathan MorenoOctober 5, 2024 412(e)3 Defined Benefit Plans 412(e)3 Defined Benefit Plans Home Blog 412(e)3 Defined Benefit Plans… Read More Jonathan MorenoOctober 5, 2024 How Financial Health and Medicare Planning Work Hand in Hand How Financial Health and Medicare Planning Work Hand in Hand… Read More Jonathan MorenoOctober 1, 2024 Load More

How Financial Health and Medicare Planning Work Hand in Hand

Preventive medicine, handing a personalized health plan to a client

How Financial Health and Medicare Planning Work Hand in Hand Home Blog How Financial Health and Medicare Planning Work Hand in Hand How Financial Health and Medicare Planning Work Hand in Hand Retirement planning in the U.S. isn’t complete without a focus on both financial health and Medicare planning  With healthcare costs continually rising, ensuring that your retirement funds can support your medical needs is essential. This article highlights the important connection between financial health planning and Medicare planning, and how to integrate them for a financially stable retirement. Understanding Financial Health in Retirement Financial health refers to your ability to meet current and future financial obligations without undue stress. This includes managing debts, saving for emergencies, and planning for retirement. In retirement, healthcare costs become a significant factor in determining financial health, making Medicare planning a necessary part of the equation. Why Medicare Should Be a Focus in Financial Planning Medicare covers basic healthcare, but understanding its limits is key. According to Fidelity, the average 65-year-old couple will spend nearly $300,000 on healthcare during retirement, and this figure doesn’t include long-term care. Having a plan for Medicare costs, along with supplemental plans or savings to cover what Medicare doesn’t, is vital. Medicare Planning Options to Consider Medicare Advantage (Part C): Provides expanded coverage options but requires careful evaluation of network restrictions and coverage limits. Medicare Supplement (Medigap): Helps cover costs like copays, coinsurance, and deductibles. Long-Term Care Insurance: Though not part of Medicare, this can be crucial for those concerned about nursing home costs, as Medicare does not cover long-term care.   How to Align Medicare and Financial Planning Start Early: The earlier you begin Medicare planning, the more financially prepared you’ll be. Evaluate Different Coverage Options: Compare traditional Medicare with Medicare Advantage and Medigap to see which works best with your financial situation. Create an Emergency Fund: Set aside money for out-of-pocket expenses not covered by Medicare, such as long-term care or elective procedures. Conclusion Financial health and Medicare planning are inseparable when it comes to retirement. By carefully assessing your healthcare needs and costs, you can create a robust financial plan that protects your assets and ensures peace of mind in your later years. For more details on managing your healthcare in retirement, visit resources like AARP’s Medicare planning guide. Related Post Long Term Care Insurance Long Term Care Insurance Home Blog Long Term Care Insurance… Read More Jonathan MorenoOctober 5, 2024 412(e)3 Defined Benefit Plans 412(e)3 Defined Benefit Plans Home Blog 412(e)3 Defined Benefit Plans… Read More Jonathan MorenoOctober 5, 2024 How Financial Health and Medicare Planning Work Hand in Hand How Financial Health and Medicare Planning Work Hand in Hand… Read More Jonathan MorenoOctober 1, 2024 Load More

The Impact of Medicare Planning on Your Retirement Financial Health

stethoscope, glasses, alarm clock with the alphabet word medicare.

The Impact of Medicare Planning on Your Retirement Financial Health Home Blog The Impact of Medicare Planning on Your Retirement Financial Health The Impact of Medicare Planning on Your Retirement Financial Health Many Americans overlook the impact that healthcare costs can have on their retirement plans.  In fact, Medicare plays a crucial role in determining financial health for retirees. This article explores how proper Medicare planning can help mitigate the risks of rising healthcare costs and protect your financial stability in retirement. The Hidden Costs of Healthcare in Retirement  While Medicare provides basic healthcare coverage, it does not cover everything. The program’s coverage gaps, such as dental, vision, and hearing care, can lead to significant out-of-pocket expenses. A study by Fidelity found that the average retiree couple could spend over $300,000 on medical costs alone, underscoring the importance of Medicare planning. How Medicare Planning Protects Your Financial Health Coverage Gaps: Medicare doesn’t cover everything, and without a supplemental plan, you may face significant out-of-pocket expenses. Medicare planning can help you choose the right Medigap or Medicare Advantage plan to reduce these costs. Unexpected Costs: Even with Medicare, you can expect expenses like copayments, coinsurance, and deductibles. Having a plan in place helps ensure these costs don’t derail your retirement savings. Strategies for Effective Medicare Planning Medigap vs. Medicare Advantage: Compare these two options carefully, considering your medical history and likely future needs. Consider Prescription Drug Costs: Ensure you’re enrolled in the right Medicare Part D plan to cover your prescriptions, which can otherwise become a major financial burden. Conclusion Without proper Medicare planning, your retirement savings may not be enough to cover the high cost of healthcare. Taking the time to align your financial and healthcare strategies will help ensure that you can enjoy a financially healthy and stress-free retirement. For more resources on planning your Medicare coverage, visit www.medicareinteractive.org. Related Post Long Term Care Insurance Long Term Care Insurance Home Blog Long Term Care Insurance… Read More October 5, 2024 412(e)3 Defined Benefit Plans 412(e)3 Defined Benefit Plans Home Blog 412(e)3 Defined Benefit Plans… Read More October 5, 2024 How Financial Health and Medicare Planning Work Hand in Hand How Financial Health and Medicare Planning Work Hand in Hand… Read More October 1, 2024 Load More