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Navigating Long Term Care Needs · Money In Motion with Klaas Financial

0:00
Speaker 1: Talking this morning with our retirement plan professionals from Class
0:03
Speaker 1: Financial CJ. Closs and Malia Quavis. Don't forget. You can
0:06
Speaker 1: learn more about Class Financial their website, it's a fantastic
0:09
Speaker 1: one Class Financial dot com. That's coss k l Aasfinancial
0:13
Speaker 1: dot com. And their telephone number six oh eight four
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Speaker 1: four two five six three seven. No charge for that
0:19
Speaker 1: initial get to know your appointment tech Loss Financial. It
0:21
Speaker 1: will be complementary to you again their number six oh
0:24
Speaker 1: eight four four two five six three seven. And to
0:27
Speaker 1: get on the program this morning, all I got to
0:28
Speaker 1: do is call the station six oh eight three two
0:30
Speaker 1: one thirteen ten. That's six soh eight three two one
0:33
Speaker 1: thirteen ten. As mentioned, joining us this morning our CJ
0:35
Speaker 1: Closs and Malia Quavis. CJ. How you're doing this week?
0:39
Speaker 2: I am doing great. It's a beautiful day.
0:41
Speaker 1: It is a fantastic Dame Malia, how are you this week?
0:45
Speaker 3: Very good?
0:45
Speaker 1: Happy to be here, Great to have you. Long and
0:47
Speaker 1: we're going to talk about three important words long term care.
0:50
Speaker 1: And it's really an important part of UH planning when
0:54
Speaker 1: it comes to your retirement and having having an understanding
0:58
Speaker 1: of costs and other things involved with long term care
1:00
Speaker 1: and we're gonna get to that in just a moment
1:02
Speaker 1: with CJ and Malia and you as well. If you'd
1:04
Speaker 1: like to join the program, we'd love to hear you
1:06
Speaker 1: at six oh eight three two one thirteen ten. That's
1:08
Speaker 1: six oh eight three two one thirteen ten. Don't forget
1:11
Speaker 1: Coss Financial their office here in Madison, the telephone number
1:14
Speaker 1: six O eight four four two five six three seven.
1:17
Speaker 1: No charge for that initial get to know your appointment
1:19
Speaker 1: at Loss Financial. It will be complimentary to you again
1:21
Speaker 1: their number six oh eight four four two five six
1:24
Speaker 1: three seven. And the website Coss financial dot com. That's
1:27
Speaker 1: Coss k l a as financial dot com. A lot
1:31
Speaker 1: of great information from the from of course, Coss Financial
1:36
Speaker 1: on the website class financial dot com. Also great opportunity
1:39
Speaker 1: during the program. Each and every week do a class
1:41
Speaker 1: quiz question the week on the show. This week's no exception.
1:44
Speaker 1: We'll be doing the class quiz question week a little
1:46
Speaker 1: bit later on in the program. Your chance to win
1:48
Speaker 1: a twenty five dollars gift card to Kabela's Little Tip
1:51
Speaker 1: if you listen closely. Often times the question and answer
1:54
Speaker 1: to the class quiz question leak come up during the program,
1:58
Speaker 1: so it pays for a number of reasons to pay
2:00
Speaker 1: particularly close attention. We'll tell you I can win the
2:02
Speaker 1: twenty five dollars gift card from our friends at Class
2:04
Speaker 1: Financial tucbelas a little bit later on in the program.
2:07
Speaker 1: Before we get started on this week's conversation, let's actually
2:10
Speaker 1: take a look back at last week's show and get
2:12
Speaker 1: the question and answer there as well. Malia, all right,
2:15
Speaker 1: can you hear me?
2:15
Speaker 2: Okay?
2:17
Speaker 1: I sure can?
2:18
Speaker 3: Okay, great. So last week we had a great conversation
2:22
Speaker 3: about what types of fees to be aware of. So
2:25
Speaker 3: that's a really important conversation. You should understand how your
2:29
Speaker 3: portfolio or your four oh one K, or anything that
2:33
Speaker 3: you do with in the investing world, how fees are applied.
2:37
Speaker 3: So great conversation we had last week, So listen back
2:41
Speaker 3: to that if you missed it. The question of the
2:43
Speaker 3: week was true or false When discussing investment fees, the
2:47
Speaker 3: term load refers to a sales charge or commission charged
2:52
Speaker 3: to an investor when buying or redeeming shares in a
2:55
Speaker 3: mutual fund. So our first caller that had the correct
2:59
Speaker 3: answer last week was Warren of Lode. Congratulations to him.
3:03
Speaker 3: The answer was true, and he correctly answered that. So congratulations,
3:07
Speaker 3: listen carefully today's question.
3:09
Speaker 1: Nice nice work, Warren. I for you. You can be
3:11
Speaker 1: like Warren if you pay close attention, you have a
3:13
Speaker 1: chance to one a little bit later on in the program.
3:15
Speaker 1: Don't forget about the website for class financial costs financial
3:17
Speaker 1: dot com. That's coss Klaas Financial dot com and they're
3:21
Speaker 1: telephone number six. So eight four four two five six
3:24
Speaker 1: three seven no charge for the nacial gets no deployment
3:26
Speaker 1: at co loss Financial will be complementary to you. So
3:29
Speaker 1: of course, as we mentioned, aside for as folks know,
3:32
Speaker 1: aside from helping folks with their retirement investing, I know
3:34
Speaker 1: you guys work with in the capacity of financial planners
3:37
Speaker 1: and of course help folks explore areas things like long
3:41
Speaker 1: term care and how those costs could potentially affect retirement assets.
3:45
Speaker 1: Is that right, CJ.
3:47
Speaker 2: That is right. Yeah. So a large part of our
3:49
Speaker 2: job as financial planners is mitigating the financial risks of
3:53
Speaker 2: how long term care support and possible services could impact
3:57
Speaker 2: your retirement portfolio. Now a disclosure, as we start talking
4:01
Speaker 2: today about long term care costs and protecting your estate
4:06
Speaker 2: against care costs or skilled nursing care costs associated with
4:13
Speaker 2: your declining health in the long run. Before we talk
4:15
Speaker 2: about this, I do just want to mention so we
4:17
Speaker 2: actually do a number of us in the organization carry
4:19
Speaker 2: insurance licenses, so we do that partly so that we
4:22
Speaker 2: can speak to this topic with authority. However, we do
4:25
Speaker 2: not sell any insurance products or services currently inside of
4:31
Speaker 2: our organization. So while we do carry the licenses, we
4:34
Speaker 2: do not sell any of this insurance. So if you
4:37
Speaker 2: were to call us after the show, we could tell
4:39
Speaker 2: you a lot about how these products and services work,
4:42
Speaker 2: but we could not sell it to you, or we
4:44
Speaker 2: would not sell it to you. I should say. So,
4:48
Speaker 2: if there is a single unsolved problem in the retirement
4:51
Speaker 2: plan space for many we'll call it middle and upper
4:54
Speaker 2: middle income adults, it is really what to do about
4:58
Speaker 2: these long term care costs later in life. And when
5:01
Speaker 2: people hear the words long term care, everyone typically has
5:04
Speaker 2: their own mindset regarding its purpose and the relevance of
5:08
Speaker 2: it in their retirement plans. And truth be told, there
5:11
Speaker 2: are many misconceptions about who will pay for what and
5:15
Speaker 2: how much they will pay for how long how long
5:18
Speaker 2: a period of time. One misconception that we run and
5:21
Speaker 2: do quite often. Is that a lot of people think
5:24
Speaker 2: that Medicare or Medicaid will just pay for the long
5:27
Speaker 2: term care. So let's speak to that a little bit.
5:31
Speaker 2: So this is not generally accurate. Medicare does help to
5:35
Speaker 2: pay for your recovery in a skilled nursing care facility
5:39
Speaker 2: after a three day hospital stay, and they will cover
5:42
Speaker 2: the total cost of skilled nursing care for the first
5:46
Speaker 2: twenty days, but only for the first twenty days. Between
5:51
Speaker 2: days twenty one and one hundred, you will pay a
5:54
Speaker 2: co insurance amount each day that's currently set at two
5:58
Speaker 2: hundred and four dollars per day in twenty twenty four.
6:03
Speaker 2: You know, run some math, everybody. That's a lot of money,
6:06
Speaker 2: and that's days twenty one to one hundred. After that
6:11
Speaker 2: maximum of one hundred days, Medicare will no longer assist
6:15
Speaker 2: with these costs at all, and you will pay one
6:18
Speaker 2: hundred percent of the expenses going forward. So think of
6:21
Speaker 2: this again as skilled nursing care facilities costs. Now, it's
6:26
Speaker 2: slightly different when we're talking in home care. I'm not
6:28
Speaker 2: going to get into that right now, but the same
6:30
Speaker 2: general rule applies, which is Medicare will help to offset
6:34
Speaker 2: some of these costs in the early stages, because think
6:36
Speaker 2: I might need skilled nursing care after a surgery, even
6:39
Speaker 2: when I'm young, right, So the idea is Medicare will
6:42
Speaker 2: kick in and help with some of this, but if
6:44
Speaker 2: it is a long term skilled nursing care need, Medicare
6:49
Speaker 2: is not going to pick it up.
6:50
Speaker 1: Talk this morning with the retirement playing professional CJ. Closs
6:53
Speaker 1: and Malia Quavis. The website class financial dot com. That's
6:56
Speaker 1: Coss Klaasfinancial dot com. Great website resource learn more about
7:01
Speaker 1: colss Financial. They're telephone number six oh eight four four
7:03
Speaker 1: two five six three seven. No charge for that initial
7:06
Speaker 1: get to know you appointment dech loss Financially. It will
7:08
Speaker 1: be complimentary to you. Again, they're number six oh eight
7:11
Speaker 1: four four two five six three seven. Sorry about cutting
7:14
Speaker 1: you off there, CJ. I was going to ask you
7:15
Speaker 1: too about like, is there eight or anything assistance available
7:18
Speaker 1: to folks. You talk about that number two hundred and
7:21
Speaker 1: forty dollars two hundred four dollars per day, My art goes,
7:23
Speaker 1: oh my goodness.
7:25
Speaker 2: Right, yeah, no, it's a good question. So again for
7:27
Speaker 2: those who are just listening in, we're talking about, you know,
7:30
Speaker 2: retirement planning, and one of the risks and retirement planning
7:33
Speaker 2: being a skilled nursing care costs known as long term
7:37
Speaker 2: care costs. And what we're talking about here is there's
7:41
Speaker 2: this misconception that people think Medicare will just cover it,
7:44
Speaker 2: no big deal. I've got Medicare and I've had health
7:46
Speaker 2: issues in the past and Medicare has just covered everything,
7:49
Speaker 2: so it's not a big deal. Well, that's true when
7:52
Speaker 2: you go in for surgeries and you know single issue needs.
7:56
Speaker 2: Medicare is especially if you get the right supplement and
7:58
Speaker 2: prescription plan. Medicare is quite comprehensive. It's actually wonderful for
8:02
Speaker 2: seniors here in the United States. But when it comes
8:04
Speaker 2: to skilled nursing care over long periods of time, as
8:08
Speaker 2: basically I just set out in this last section, don't
8:11
Speaker 2: plan on Medicare covering it. Now. The next thing that
8:14
Speaker 2: we hear people say, and this is again a misconception,
8:17
Speaker 2: is but what about Medicaid. I've heard that Medicaid will
8:21
Speaker 2: cover it. And by the way, that's good. In some
8:24
Speaker 2: ways people are hinting at truths. What do they say?
8:28
Speaker 2: The best lie are the ones that are threaded with truth, right, So,
8:32
Speaker 2: and by the way, These are not lies. These are
8:34
Speaker 2: just misconceptions. But the idea of this is Medicare offers
8:38
Speaker 2: some help but not all, and then you eventually run
8:40
Speaker 2: out and you have a cost. And then same thing
8:42
Speaker 2: with Medicaid. Medicaid offers some help, but only when you qualify.
8:46
Speaker 2: So let's talk about medicaid. It is unlikely that you
8:50
Speaker 2: will qualify for assistance unless your assets have been depleted
8:54
Speaker 2: to a very very low level. Think of medicaid as
9:00
Speaker 2: taxpayer funded long term care assistance once you are destitute.
9:07
Speaker 2: Now that's not exactly the definition, because destitute would be
9:11
Speaker 2: defined if it's just you with no spouse. You would
9:14
Speaker 2: have to spend down your personal assets to two thousand
9:17
Speaker 2: dollars and have no other assets before medicaid would kick in.
9:21
Speaker 2: You don't want to do that. That's not ideal if
9:24
Speaker 2: you have a spouse. So let's say you're the one
9:26
Speaker 2: who has long term care needs, but you have a
9:28
Speaker 2: spouse living at home. You still have to spend down
9:33
Speaker 2: your estate too pretty low levels. So those levels are
9:36
Speaker 2: in the state of Illinois, as an example, you have
9:39
Speaker 2: to spend down your liquid assets to one hundred and
9:42
Speaker 2: twenty nine thousand if you're in Wisconsin, it's one hundred
9:45
Speaker 2: and fifty four thousand, and then you can keep one car,
9:49
Speaker 2: a primary residence, and a pre need funeral contract. You
9:54
Speaker 2: also can keep some cash flow in the form of
9:55
Speaker 2: soci security. I think it's two or three thousand dollars
9:57
Speaker 2: a month. But basically, you know, imagine, if you're the
10:00
Speaker 2: healthy spouse in this situation, you're spending down your personal
10:04
Speaker 2: assets to one hundred and twenty nine a vehicle, of
10:06
Speaker 2: primary residence, and a couple thousand dollars worth of income.
10:09
Speaker 2: That is not living high on the hog. That is
10:12
Speaker 2: just what the state considers you having sustenance. Once you
10:16
Speaker 2: got down to that level, if you had a spouse,
10:18
Speaker 2: then Medicaid would kick in for the unhealthy one. Now,
10:21
Speaker 2: for those who are wondering, this is known as the
10:23
Speaker 2: Community Spouse Resource Allowance CSRA, and it does vary state
10:29
Speaker 2: by state in terms of what those spend downs are.
10:31
Speaker 2: But here this whole topic of what we're talking about
10:34
Speaker 2: relative to Medicaid is known in the professional world as
10:38
Speaker 2: the Medicaid spend down requirements. A lot of people want
10:41
Speaker 2: to avoid the Medicaid spend down requirements, so there's a
10:44
Speaker 2: lot of financial planning topics surrounding this in terms of
10:47
Speaker 2: irrevocable trust and all kinds of stuff to try to
10:49
Speaker 2: get money out of your estate to qualify for Medicaid.
10:52
Speaker 2: What I want you all to know is qualifying for
10:55
Speaker 2: Medicaid is not something you should wear with a badge.
10:59
Speaker 2: Let me repeat that, qualifying for Medicaid is not something
11:02
Speaker 2: you should be proud of. It is actually meaning you
11:04
Speaker 2: have either given away everything and you don't have any
11:07
Speaker 2: money left, or you have spent down your personal assets
11:10
Speaker 2: and now you have become taxpayer dependent. So again two misconceptions. Hey,
11:15
Speaker 2: long term care will be covered by medicare, not so much.
11:19
Speaker 2: Misconception number two is Medicaid will pick it all up maybe,
11:23
Speaker 2: but only after you have become mostly financially Dustin CJ.
11:26
Speaker 1: You know, I like to say great information there, I
11:28
Speaker 1: don't know that. Well's call that information? Yeah, good point, useful, useful, important,
11:34
Speaker 1: but exactly talking this morning with our retirement planning professionals
11:38
Speaker 1: from Class Financial, CJ, Class and Malia Quavis. Of course,
11:41
Speaker 1: you can learn more about Malia CJ and the whole
11:43
Speaker 1: team at Class Financial Online, Colossfinancial dot com. That's css
11:46
Speaker 1: Klaas Financial dot com and their telephone number and no
11:50
Speaker 1: charge for you for the nation gets now appointment at
11:52
Speaker 1: Class Financial. It will be free to you. That is
11:54
Speaker 1: some great information. Six oh eight four four two five
11:57
Speaker 1: six three seven. Again the telephone number six so eight
12:00
Speaker 1: four four two five six three seven. We'll continue our
12:02
Speaker 1: conversation with cjn Malia. We'll do that next as Money
12:05
Speaker 1: in Motion with Class Financial continues right here on thirteen
12:08
Speaker 1: ten wiv A and the phone lines are open for
12:14
Speaker 1: you right now. If you've got questions for CJ. Closs
12:17
Speaker 1: and Malia Quavis, they are our retirement plan professionals from
12:19
Speaker 1: Class Financial. To get on the air, all you gotta
12:21
Speaker 1: do is dial in six oh eight three two one
12:23
Speaker 1: thirteen ten. That's three two one thirteen ten. You can
12:27
Speaker 1: learn more about COSS Financial. They've got a great website
12:30
Speaker 1: cossfinancial dot com. That's Closs k l a A S
12:33
Speaker 1: financial dot com. Great features on the website. The podcast
12:36
Speaker 1: is there. You can listen back to this previous shows.
12:38
Speaker 1: You can also sign up for the weekly Market Pulse newsletter.
12:42
Speaker 1: Again that available to you at clossfinancial dot com. That's
12:45
Speaker 1: colss k l AA S financial dot com. And the
12:48
Speaker 1: telephone number six oh eight, four, four, two, five, six,
12:51
Speaker 1: three seven. Talking with Malia and CJ this week about
12:54
Speaker 1: long term care and what factors play into it, and
12:58
Speaker 1: of course the importance of planning for these type of
13:00
Speaker 1: things when it comes to putting together your retirement and Malia,
13:04
Speaker 1: I've got to wonder about, like how expensive these these
13:07
Speaker 1: long term care costs have risen and kind of on
13:10
Speaker 1: the other side of things, how expensive are policies to
13:13
Speaker 1: help with these costs today.
13:15
Speaker 3: Yeah, we're going to look at some numbers, and I
13:17
Speaker 3: think it's important that everybody, you know, kind of really
13:20
Speaker 3: listen in because maybe you're thinking, well, this doesn't apply
13:25
Speaker 3: to me for whatever reason, but it does apply to
13:27
Speaker 3: my parents, And so I just want to start with
13:30
Speaker 3: that and put a note out there for people if
13:36
Speaker 3: in fact, you are looking at senior living accommodations, whether
13:41
Speaker 3: it be independent living, assisted living, you know, eventually supported living,
13:47
Speaker 3: skilled nursing, or something like that for an elderly parent,
13:51
Speaker 3: or you're planning ahead potentially for yourself. We actually are
13:56
Speaker 3: going to do a webinar next month with c in
14:00
Speaker 3: your network, who helps actually Vesta who helps in the
14:05
Speaker 3: Madison region help people find the right types of facilities
14:09
Speaker 3: that might work for them, so very important. I just
14:12
Speaker 3: want to put that out there. If you're interested, contact
14:14
Speaker 3: Class Financial. We can put you in touch with that
14:17
Speaker 3: webinar that we're going to be doing. And you know,
14:20
Speaker 3: this is real life stuff, so as we talk about
14:23
Speaker 3: expenses and planning, this is not the fun stuff, right,
14:27
Speaker 3: this is just the reality. And so personally, yesterday I
14:31
Speaker 3: spent five hours touring local facilities like this, and I'll
14:35
Speaker 3: tell you there's a lot of people living to be
14:38
Speaker 3: ninety to one hundred. I saw them, and they are
14:41
Speaker 3: active people. So for many of us say, well, I
14:44
Speaker 3: don't know how much longer I'll be here anyways, or
14:47
Speaker 3: I don't know that they really need to plan. Trust me,
14:50
Speaker 3: the number of people reaching a hundred or just shy
14:53
Speaker 3: of that is growing. So that's why as you really
14:58
Speaker 3: take heart to some of this, you go, well, well,
15:00
Speaker 3: you know, it could be me or it could be
15:01
Speaker 3: my parent, and I really do need to perhaps look
15:04
Speaker 3: at this carefully. So when we looked at jen Worth's
15:08
Speaker 3: cost of care study in twenty twenty three is the
15:11
Speaker 3: last one for last year, of course, they found that
15:14
Speaker 3: the nationwide median cost for long term care currently runs
15:18
Speaker 3: about eight thousand six hundred and sixty nine dollars per month,
15:23
Speaker 3: So that's across the country. Average is about two eighty
15:26
Speaker 3: eight per day for a semi private room to almost
15:30
Speaker 3: ten thousand dollars for a private room if you're needing
15:33
Speaker 3: that supported care at a nursing home. So obviously, cost
15:38
Speaker 3: of long term care varies depending on the level of
15:40
Speaker 3: care necessary. So CJ mentioned you know, we're not going
15:44
Speaker 3: to get deep into it, but you might just want
15:46
Speaker 3: to stay in your home. So cost for home care,
15:49
Speaker 3: assisted living, memory care, that can depend on the facility,
15:54
Speaker 3: the region, and again the level of care you need.
15:57
Speaker 3: And so what we're looking at today is the fact
15:59
Speaker 3: that many people simply don't have the resources to budget
16:02
Speaker 3: for those kinds of expenses. And again, nobody wants to
16:06
Speaker 3: think about these could become real for them. So our
16:10
Speaker 3: goal is not to scare people today. It's just to
16:12
Speaker 3: make you educated in that this could be you or
16:15
Speaker 3: your parent, and you want to plan as well as
16:17
Speaker 3: you can, so understanding those expenses, the cost per month,
16:23
Speaker 3: what those could possibly look at, as far as looking
16:26
Speaker 3: at the cost of long term care policies to help
16:29
Speaker 3: combat this risk. If you were to look at a
16:32
Speaker 3: policy you have to understand we're not trying to eradicate
16:36
Speaker 3: the entire expense. We're just trying to look at maybe
16:40
Speaker 3: it makes sense given your holistic financial situation, that you
16:45
Speaker 3: might want to have some insurance in place to help
16:48
Speaker 3: with some of those expenses. Each person's different, so we
16:51
Speaker 3: look at traditional long term care policies. According to the
16:55
Speaker 3: American Association for Long Term Care Insurance, average cost of
16:59
Speaker 3: long term care insurance premiums average twelve hundred dollars a
17:03
Speaker 3: year for a sixty year old man gives you about
17:06
Speaker 3: one hundred and sixty five thousand dollars a coverage, and
17:09
Speaker 3: again these are traditional policies. For a sixty year old woman,
17:12
Speaker 3: it's about nineteen hundred and sixty dollars for the same coverage.
17:16
Speaker 3: And you go, well, why would those prices be so different, Well,
17:20
Speaker 3: women live longer, and you know typically they are going
17:24
Speaker 3: to have to make sure that they can provide for
17:27
Speaker 3: a longer period of time. Married couples can buy more
17:31
Speaker 3: affordable joint policy. So you might see that a married
17:35
Speaker 3: couple at age sixty would pay twenty five hundred annually
17:39
Speaker 3: force a joint policy with one hundred and sixty five
17:42
Speaker 3: thousand dollars of coverage, and in our experience, you know,
17:46
Speaker 3: both CJ and I have have personally seen the long
17:50
Speaker 3: term care costs increase and that will continue as more
17:54
Speaker 3: and more people obviously go on go on claim. So
17:58
Speaker 3: future inflation costs are real and they could add actually
18:02
Speaker 3: one to five percent to the benefits each year. So
18:04
Speaker 3: sometimes those long term care policies will offer an inflation
18:09
Speaker 3: factor that you can throw in as a writer. Obviously,
18:12
Speaker 3: the more writers you throw into any insurance policy, the
18:15
Speaker 3: more expensive the premium, So keep that in mind. So
18:19
Speaker 3: many people actually wait till they're in their sixties to
18:22
Speaker 3: get policies. We've seen people wait till they're in their seventies.
18:25
Speaker 3: But we would just say, you know, if this is
18:27
Speaker 3: a consideration for your situation, you want to consider the
18:32
Speaker 3: fact that age and health considerations really do play into this,
18:37
Speaker 3: meaning that cognitive issues can creep up at any time. Obviously,
18:42
Speaker 3: you're never going to be as young as you are today,
18:46
Speaker 3: So if you have a feeling that this is something
18:48
Speaker 3: you might be interested in, we would suggest you at
18:50
Speaker 3: least look into it. And then the other side of
18:53
Speaker 3: the coin, aside from the long term, traditional long term
18:56
Speaker 3: care policies is certainly the hybrid life and long term care.
19:00
Speaker 3: We see a lot more people moving that direction. Point
19:03
Speaker 3: with this is if you never need to use the care,
19:06
Speaker 3: the benefit can come back to you or your state,
19:09
Speaker 3: either in the way of a refundable premium or eventually
19:12
Speaker 3: a death benefit to your beneficiary or your a state.
19:16
Speaker 3: Sometimes those policies can be easier to qualify for, but
19:19
Speaker 3: also sometimes more expensive for the premium. So again we
19:22
Speaker 3: would suggest speak to a long term care specialist, speak
19:27
Speaker 3: to your financial advisor and figure out what makes sense
19:31
Speaker 3: for your particular situation.
19:33
Speaker 1: Sounds great, as we talked this morning with Malia Quavis
19:35
Speaker 1: and CJ. Closs. They are our retirement planning professionals from
19:38
Speaker 1: Class Financially. You can learn more online the website class
19:41
Speaker 1: financial dot com. That's COSS k l aas Financial dot
19:44
Speaker 1: com and they're telephon number for the office right here
19:46
Speaker 1: in Madison six so eight four four two five, six
19:49
Speaker 1: three seven. What about if you're too young? Are you
19:51
Speaker 1: too young? Could you be too young to buy a policy?
19:53
Speaker 1: We've get the details on that. We'll do the Class
19:55
Speaker 1: quiz question the week as well as Money in Motion
19:57
Speaker 1: with COSS Financial continues next right here thirteen ten WIB
20:01
Speaker 1: eight talking with our retirement planning professionals c J Class
20:07
Speaker 1: and Malia Quavis. The website COSS Financial dot com. That's
20:10
Speaker 1: COSS k l A A S Financial dot com and
20:13
Speaker 1: their telephone number six oh eight four four two five
20:16
Speaker 1: six three seven. No charge for that initial gets to
20:18
Speaker 1: know your appoyment to at Costs Financial, it will be
20:20
Speaker 1: complimentary to you again their number six O eight four
20:23
Speaker 1: four two five six three seven. So if you're looking
20:27
Speaker 1: CJ at you know, long term and share care insurance
20:30
Speaker 1: that doesn't only cover nursing facilities or what do we
20:33
Speaker 1: need to know there? And what if you know I
20:36
Speaker 1: never need care? What if folks need to know their
20:38
Speaker 1: CJ Yeah, I think as.
20:40
Speaker 2: We begin talking about this part, it's kind of where
20:42
Speaker 2: the skepticism starts coming in. And the skepticism is is good.
20:47
Speaker 2: By the way, again, I hope everybody heard at the
20:50
Speaker 2: beginning of the show. So we do have some insurance
20:52
Speaker 2: licensed individuals, but we actually don't sell this insurance and
20:55
Speaker 2: so therefore really our objective is to educate and make
21:00
Speaker 2: sure that people consider it because we as retirement planners
21:04
Speaker 2: actually get to see this play out. This is not
21:07
Speaker 2: hypothetical for us, right, this is not a are you sure?
21:10
Speaker 2: Is it really a risk? Yes, it's a risk. Now
21:14
Speaker 2: we also see the flip side of it. Just because
21:16
Speaker 2: it's a risk, should you ensure against it? Maybe not?
21:21
Speaker 2: Maybe not. So as a matter of fact, just at
21:24
Speaker 2: a very high level, there is a real world in
21:26
Speaker 2: which we talk to some people and say, this is
21:29
Speaker 2: a risk to you. If you end up in a
21:31
Speaker 2: skilled nursing care or in home services, you could end
21:34
Speaker 2: up running out of money and going unto Medicaid. Right,
21:37
Speaker 2: so it's called the Medicaid spend down. So we will
21:38
Speaker 2: say that is a risk, but the insurance is so
21:42
Speaker 2: expensive that you may not be able to afford it,
21:44
Speaker 2: and so you may just have to carry that risk. Conversely,
21:49
Speaker 2: there's other people who we talk to and we go, yes,
21:51
Speaker 2: this is a risk to you in terms of the
21:53
Speaker 2: potential expensive near the end of life. However, you have
21:57
Speaker 2: enough money to actually pay for this out of your
21:59
Speaker 2: own estate and still not run into the quote unquote
22:01
Speaker 2: Medicaid spend down. We call that being self insured against
22:05
Speaker 2: the risk. Now again people misunderstand. They go, well, oh, okay,
22:09
Speaker 2: so if I'm self insured, I don't need the long
22:11
Speaker 2: term care insurance. Not necessarily. Just because you can afford
22:14
Speaker 2: it doesn't mean that that's the right decision. I run
22:17
Speaker 2: into people with twenty million dollars states who say, yeah,
22:20
Speaker 2: but I don't want to waste a million or two
22:21
Speaker 2: dollars at the end of life. I might as well
22:23
Speaker 2: just pay a premium for the insurance. So you get
22:26
Speaker 2: the idea here. This is actually much more complicated than
22:31
Speaker 2: people realize. We would highly suggest that the first thing
22:35
Speaker 2: you do is sit down with a financial advisor or
22:38
Speaker 2: somebody who you trust, of an accountant who can actually
22:41
Speaker 2: look at what is the risk if you go into
22:44
Speaker 2: a nursing home and say the state of Wisconsin and
22:46
Speaker 2: it's one hundred grand a year, what other sources of
22:49
Speaker 2: income are available to you? Do you have a spouse
22:51
Speaker 2: that's dependent upon you look at the whole math to
22:54
Speaker 2: figure out how big is the actual risk? Hey, and
22:58
Speaker 2: by the way, hint, the risk typically isn't thee hundred grand.
23:02
Speaker 2: It's the difference between the one hundred grand of the
23:04
Speaker 2: nursing home and what you already have coming in and
23:07
Speaker 2: guaranteed income you know, aka pensions and social security. So
23:11
Speaker 2: you want to look at what do I need to
23:13
Speaker 2: ensure against now. By the way, good insurance agents do
23:17
Speaker 2: a great job with this, but there's some who don't
23:20
Speaker 2: understand the space quite well enough and they're just looking
23:22
Speaker 2: to sell something, and so they're selling things that are
23:24
Speaker 2: way too expensive without the right coverage. Okay, with that
23:27
Speaker 2: kind of couching out of the way, your question was,
23:30
Speaker 2: what does this What do these policies even cover? So
23:33
Speaker 2: there are some, you know, some horror stories that we've
23:36
Speaker 2: heard of people getting into nursing or needing long term
23:40
Speaker 2: care services but getting those long term care services at
23:45
Speaker 2: their home, reaching out to their long term care insurance
23:48
Speaker 2: policy and the policy saying nope, we don't cover in
23:52
Speaker 2: home skilled nursing care. Well, this is good news bad news.
23:55
Speaker 2: Older policies were written that way, but anything more recently sold.
24:00
Speaker 2: About ninety nine percent of them generally cover home health care,
24:04
Speaker 2: hospitscre respite care, and traditional long term care facilities and
24:09
Speaker 2: even Alzheimer's care facilities. So in short, most of these
24:13
Speaker 2: newer long term care policies cover all of them. If
24:16
Speaker 2: you have one that you bought twenty thirty years ago,
24:18
Speaker 2: you might want to pause and just make sure that
24:20
Speaker 2: you are aware of what it does and does not cover.
24:24
Speaker 2: So of course then people say, well, what if I
24:26
Speaker 2: buy a long term care policy and I don't need it? Well,
24:30
Speaker 2: a couple of things. You should know that if you're
24:31
Speaker 2: over sixty five years old today, you have about a
24:34
Speaker 2: seventy percent chance of needing some kind of long term
24:37
Speaker 2: care services in your lifetime. So good news, bad news
24:40
Speaker 2: is you probably will have some need. But here's where
24:43
Speaker 2: it gets tricky. Women generally need care longer for an
24:47
Speaker 2: average of three point seven years, whereas men need it
24:49
Speaker 2: for two point two years, but about twenty percent will
24:53
Speaker 2: require it for more than five years. So once you're
24:57
Speaker 2: over sixty five and healthy, you probably will need some
25:01
Speaker 2: form of long term care. The question is for how long?
25:04
Speaker 2: And then, of course, if you die peacefully in your sleep,
25:07
Speaker 2: which I know we all hope that we will, someday
25:09
Speaker 2: people go, what do I do with my policy? I
25:11
Speaker 2: pay for this thing for all these years and then
25:13
Speaker 2: it's just gone. Well again, back to what Miliah mentioned previously,
25:17
Speaker 2: there are return of premium policies that people are buying. Now.
25:21
Speaker 2: There are policies that are life long term care where
25:25
Speaker 2: it's a guaranteed premium that can't go up in many
25:28
Speaker 2: circumstances with a defined amount of a benefit for either
25:32
Speaker 2: death or long term care. And as you can imagine,
25:35
Speaker 2: if you die peacefully with a life long term care policy,
25:39
Speaker 2: then your estate benefits from all those premiums that you
25:41
Speaker 2: paid due to the death benefit. And then a final
25:45
Speaker 2: question that we get is am I too young to
25:47
Speaker 2: buy a policy? And so we would say it's tricky.
25:51
Speaker 2: If you talk to an insurance agent, they will often
25:53
Speaker 2: tell you, well, we've seen people in their early fifties
25:56
Speaker 2: with long term care situations, Alzheimer's situation, something like that.
26:01
Speaker 2: But generally speaking, if you were to look at what
26:04
Speaker 2: we think professionally is the optimal time to be looking
26:08
Speaker 2: at buying long term care for the purpose of avoiding
26:12
Speaker 2: a Medicaid spend down, we think this is somewhere in
26:15
Speaker 2: your fifties and sixties. Now, I know that's a broad
26:18
Speaker 2: range everybody, somewhere in your fifties and sixties. I will
26:21
Speaker 2: mention to you it can be very hard to purchase
26:25
Speaker 2: long term care insurance prior to retirement. I'm not saying
26:29
Speaker 2: you shouldn't. I'm saying that it's very challenging to I
26:33
Speaker 2: don't want to get into the weeds of why. But
26:35
Speaker 2: often we have looked at it with people who they're
26:37
Speaker 2: in the risk range they want to ensure against it,
26:39
Speaker 2: and it's just very, very challenging to actually budget for
26:43
Speaker 2: it when you don't know what your budget will be
26:45
Speaker 2: in retirement. So fifties and sixties is probably the optimal
26:49
Speaker 2: time to be looking at this type of insurance. If
26:51
Speaker 2: you think you need it, please please please talk to
26:54
Speaker 2: your advisor, because you do not want to buy something
26:57
Speaker 2: more than what you need. If you're going to get
26:59
Speaker 2: this insurance, you need to make sure it covers the
27:01
Speaker 2: need and not the total risk.
27:03
Speaker 1: Great knowing about also thinking about making an informed decision
27:06
Speaker 1: in choice and kind of having that strategy and plan,
27:08
Speaker 1: and that's one of the great things when you're working
27:10
Speaker 1: with folks at COSS Financial of course, our retirement planning
27:12
Speaker 1: professionals from Class Financial. You can learn more online Cossfinancial
27:15
Speaker 1: dot com. That's Coss Klaasfinancial dot com and Malia, let's
27:19
Speaker 1: take it down the home stretch. Let's talk about the
27:21
Speaker 1: idea of maybe self funding your own long term care costs.
27:25
Speaker 3: Yeah, so CJ alluded to this, and again it depends
27:28
Speaker 3: in your situation, but current stats on how much is
27:31
Speaker 3: spent on long term care during one's lifetime. We find
27:34
Speaker 3: that almost sixty percent individuals out there who are over
27:37
Speaker 3: sixty five, they'll actually spend less than twenty five thousand
27:40
Speaker 3: on long term care during their lifetimes. However, over fifteen
27:44
Speaker 3: percent will spend more than two hundred and fifty thousand.
27:46
Speaker 3: So this is the magic question. None of us knows.
27:48
Speaker 3: So we do see many times, high income, high network
27:53
Speaker 3: people can plan to self fund, and when we sit
27:57
Speaker 3: down with those folks, we can make sure that they
27:59
Speaker 3: understand that well. And then again, as CJ said, it
28:02
Speaker 3: can be challenging sometimes for many people to figure out
28:07
Speaker 3: how can I actually survive in retirement which is my
28:09
Speaker 3: normal income? And then what do you mean budget for
28:12
Speaker 3: this long term care cost? So it can be tricky,
28:16
Speaker 3: but definitely sitting down with a professional will help you
28:18
Speaker 3: map that out. And then the next question is what
28:21
Speaker 3: are my choices if I want to help manage this
28:25
Speaker 3: risk to my portfolio. Let's see, I can't you know,
28:27
Speaker 3: I can't. I don't have enough funds to actually pay
28:31
Speaker 3: for such services. Well, generally you have three options, and
28:36
Speaker 3: so the first one we covered was self funding. We
28:39
Speaker 3: discuss long term care insurance. But the main one people
28:42
Speaker 3: fall back on is the option to depend on your family.
28:47
Speaker 3: And obviously we look at that today. Sixty five percent
28:51
Speaker 3: of adults needing long term care today do rely on
28:54
Speaker 3: friends and family to provide it. Nobody wants to go
28:58
Speaker 3: that direction. Oftentimes that is the reality. But you have
29:02
Speaker 3: to understand right now, for your for your own situation,
29:05
Speaker 3: which family members are likely to provide this care and
29:10
Speaker 3: you know are they are they living regionally that will
29:13
Speaker 3: help you, you know, accomplish that, do they have their
29:16
Speaker 3: own jobs? But what we find is we all live
29:20
Speaker 3: to be a little older. About a third of these
29:22
Speaker 3: caregivers are sixty five years or older. Yesterday I heard
29:27
Speaker 3: about a woman who's one hundred and three still living
29:31
Speaker 3: very well, and her daughter is eighty five. Now this
29:35
Speaker 3: is inconceivable, right, but okay, in eighty five year old's
29:39
Speaker 3: trying to take care of one hundred and three year old, right,
29:41
Speaker 3: So keep that in mind as you depend on others,
29:45
Speaker 3: how old are they going to be as as you
29:48
Speaker 3: need even more and more care, And you have to
29:51
Speaker 3: take into consideration maybe these children of yours are friends,
29:54
Speaker 3: they have jobs still, or families, So that's where this
29:58
Speaker 3: gets a little tricky, and you might I want to
30:00
Speaker 3: mitigate some of that risk as to do. I need
30:03
Speaker 3: to figure out how to pay for some assisted care
30:06
Speaker 3: outside of depending on family, so it can.
30:08
Speaker 2: Be very tricky.
30:10
Speaker 3: Ultimately, all we want are our listeners listeners to do
30:13
Speaker 3: is take this to heart, sit down for a serious
30:16
Speaker 3: conversation on what makes sense for you well.
30:19
Speaker 1: Stated Malia Quavis and CJ. Closs. They are our retirement
30:21
Speaker 1: planning professionals from Class Financial. Their website class financial dot com.
30:25
Speaker 1: That's Coss k l aas Financial dot com. I hope
30:28
Speaker 1: you've had a chance to check that out. If you
30:30
Speaker 1: haven't yet, head on over there now Cossfinancial dot Com.
30:33
Speaker 1: Tell for number six oh eight four four two five
30:35
Speaker 1: six three seven. No charge for that initial get to
30:38
Speaker 1: know you appointment tech Class Financial eight will be complimentary
30:40
Speaker 1: to you again their number six oh eight four four
30:43
Speaker 1: two five six three seven. You going to hold onto
30:45
Speaker 1: that number as well because it's time now for the
30:46
Speaker 1: class quiz question the week. It works like this, In
30:49
Speaker 1: just a moment, I'll ask you the class quiz question leak.
30:51
Speaker 1: You'll then have thirty minutes from the today's program to
30:53
Speaker 1: call the Class Financial office right here in Madison at
30:55
Speaker 1: six oh eight four four two five six three seven.
30:58
Speaker 1: If you are the first car correct answer, win this
31:00
Speaker 1: week's prize, which is a twenty five dollars gift card
31:03
Speaker 1: to Cabellas. This week's cost quiz question the week is
31:06
Speaker 1: this true or false? After one hundred days in a
31:10
Speaker 1: skilled nursing care facility, Medicare will no longer assist with costs,
31:15
Speaker 1: leaving you to pay one hundred percent of the expenses
31:19
Speaker 1: going forward. True or false? Telephone number six oh eight
31:22
Speaker 1: four four two five, six three seven. First call correct
31:25
Speaker 1: answer one that twenty five dollars gift card to Cabela's.
31:27
Speaker 2: Don't forget.
31:28
Speaker 1: That's Cost Financial's office right here in Madison. No charge
31:30
Speaker 1: that initial gets to no appointment at Cost Financial. It
31:33
Speaker 1: will be complementary to you. C. Jmalia, It's always great
31:36
Speaker 1: chatting with you guys. You enjoy this beautiful day. We
31:38
Speaker 1: will do it all again real soon.
31:39
Speaker 2: Thanks Chan Sewing.
31:40
Speaker 1: Doctor Marty Greer with check Out Veterinary joins us next
31:43
Speaker 1: year on thirteen ten WIBA. This is money in motion
31:46
Speaker 1: with Cost Financial Asset Advisors LLC, a registered investment advisor
31:51
Speaker 1: registered with the SEC. The contents of this show are
31:54
Speaker 1: for informational purposes only and should not be considered individual
31:57
Speaker 1: investment advice. COSS Financial does not offer tax or legal advice.
32:02
Speaker 1: Any opinion offered during the course of this show is
32:05
Speaker 1: the opinion of that particular investment advisor representative, and not
32:09
Speaker 1: necessarily the opinion of class Financial News comes your way
32:13
Speaker 1: next right here on thirteen ten, Wiba