CHALLENGE: Secure income that lasts a lifetime
FIVE KEY RISKS: 1) Longevity, 2) Inflation, 3) Asset Allocation, 4) Withdrawal, 5) Health Care
Concern: Long Term Care costs in the future and having enough money to live on during retirement. This is part of your total financial plan.
In the future if you are unable to perform two of the six activities of daily living (ADL) then you will need money to pay for that care whether received in your home or in a facility. Medicare does not pay for "custodial care."
There are several solutions:
Average cost of $150 per day for full care is equal to $4,500 per month which is $54,000 per year. Given inflation of the cost of care your money may be used up too quickly. Quality of care is a major concern at the time of need. You want the best care, not the least cost plus quality of life for you and your family. You want professional care and not solely rely on your family for care.
You pick the daily benefit dollar amount and the length of benefit period. For example: $150 per day for up to 5 years = $270,000 total benefit pool of money available.
Asset Care uses existing assets and leverages into a much greater amount for Long Term Care benefit. If Long Term Care is not needed, you still have the assets to use of pass to heirs.
What “assets” can I, or should I, use for Asset Care?
Make more efficient use of existing assets by simply moving it from one “bucket” to another. Leverage the asset into possible tax free benefit.
A. Reallocate some existing money that will provide:
You control the beneficiary. This will protect your money/assets in event you are sick or hurt and need long term care. This will allow current money that is earning little interest now to be reallocated to take care of several needs plus the money is still there if needed in the future for possible interest.
Each person can be insured or Long Term care benefit can be "shared" by both spouses combined.
B. Guaranteed level premium for long term care benefit/life insurance benefit for lifetime coverage.
A review of current life insurance is beneficial. You may be able to do a tax free exchange into a new policy that covers both needs. Sometimes the new policy does not require any more premiums.