Time goes by quickly.  When you think back on the past, it seems like yesterday.  This comes to my (Mark) mind because coming up soon I will be attending my 30-year high school reunion.  I am looking forward to reconnecting with old friends and reminiscing about what it was like back in the good old days.  It will be a happy time, but in the back of our minds, we realize there are many who are no longer with us.  As time marches on, you realize that circumstances can change quickly and you never know what tomorrow will bring.  Most of us have not changed mentally, but physically is another story.  For many, being 50 pounds heavier than you were in high school is a reality.

As we get older, we feel more mortal and health becomes a bigger and bigger concern.  Many fear a health crisis that will require the need for long-term care.  This is the type of care needed where you are not necessarily getting better but need help with daily activities such as bathing, dressing, transferring, etc.  This kind of care can be provided at home if a quality plan of care is formulated, but many times a nursing home may be necessary.  Our family was recently faced with a situation where my father fell and ended up in the hospital unable to care for himself.  Mom could not care for Dad, so a decision had to be made about how and where Dad would get the care he needed.  This is a tough situation many families face that causes much stress and heartache.  Our family had also experienced this in the past with Uncle Don (Dad’s brother).  He experienced three strokes and a heart attack within a year and ended up needing nursing home care.  He lived another six years in a nursing home and died at the young age of 58.  This was tough emotionally and financially.  Much of the life savings Uncle Don had accumulated was wiped out.

Along with the fear of losing independence, one of the biggest fears many have is, “How will we pay for this?”  Costs can be has high as $7,000 to $8,000 per month.  Many run out of money in a few years or even a few months.  For married folks this can be scary situation if one spouse is using up a lot of financial resources.  What will happen with the spouse who is still healthy and lives at home?  Will there be enough money to continue their current lifestyle?

Typically, there are two types of scenarios when planning for long-term care.  The first is when there is no current crisis and the goal is to plan ahead.  We call this preplanning or precrisis planning.  More and more people are taking steps to engage in this pre-planning process.  This typically consists of a financial analysis of assets and income to help determine what resources are available to help pay for care if needed.  It also consists of implementing strategies that will create more dollars to help pay the bill.  A common strategy considered is long-term care insurance.  In the past, the public has viewed this as too expensive, but the government has come out with some incentives to make this option more attractive.

The government is encouraging long-term care insurance, so that Medicaid will not have to foot as much of the bill.  One of the incentives is the Long Term Care Partnership Program.  If insurance that meets certain requirements pays for your care, the government will allow you to keep assets of an equal amount.  There are also insurance policies that will return the premiums if you do not use the coverage.

The second scenario is crisis planning and occurs when a family member is already receiving care and assets are being spent down.  Many think that since the laws changed and there is now a 5 year look back, nothing can be done.   This is usually not the case.  The planning is tricky, but many times up to forty percent to seventy percent of the assets can be preserved.  The key is checking into it right away.  Consult with and elder care attorney or attend a workshop going on in your area.  There may be things you can do that you didn’t know about.

For more information about The Retirement Guys, tune in every Sunday at 11 a.m. on 1370 WSPD or visit www.retirementguysradio.com.  Securities are offered through NEXT Financial Group Inc., Member FINRA / SIPC.  The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537.

This entry was posted on Friday, October 16th, 2009 at 12:00 am and is filed under Retirement Guys, Toledo Business Link.
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