Four Reasons Why So Many People Hate Long Term Care Insurance

So this week I had take twenty four hours of continuing education to renew my California Insurance License.  Included in that continuing education were eight hours on training on Long Term Care Insurance training.  Here’s something I learned:

• 47% of people over 85 have Alzheimer’s which is not covered by health insurance.
• On average they live another eight years with the disease
• The average cost for care in a non-private room is over $72,000 per year

We try REALLY hard to accumulate and protect assets during our lives so that we can live off of them during our later years and then leave them to loved ones or charities.  $72,000 a year for eight years is over $500,000 in today’s dollars…..if this happens in 20-30 years it could cost you 2-3 million dollars. That’s a problem. 

So, why does everybody hate Long Term Care so much?  Here’s why:

1. It’s expensive (hard to pay for monthly or annually)
2. It’s spooky (who wants to talk about not being able to perform the activities of daily living by yourself anyway?)
3. It’s confusing
4. You may not need to use it and would have wasted all that money.

Well, I agree.  But here’s the deal: you probably will be sick for at least a little while before you actually die.  Paying for that out of your accumulated assets could wipe out all the money you have in life.  We probably should protect your assets in all honestly.  And, if you have an inheritance coming you may want to provide LTC for your folks and protect that inheritance and make sure there twilight years are as comfortable as possible. 

So here’s my offer: I can’t take the spooky part away but, if you care more about protecting your assets than that uncomfortable feeling, I can probably show you:

1.      How to afford the premiums

2.      How to understand what you have

3.      How to make sure that if you don’t use the Long Term Care benefits your family will get back every dime of premium you put into the plan. 

There are so many cool options now between Long Term Care Policies, Annuities with Long Term Care Riders, Hybrid Products, Insurance Policies with Long Term Care Riders etc. so it is possible for each one of us to protect our assets and our families. 

If you have every wondered about LTC, or just want to talk, send me an email or give me a call at 619-929-4000.

God bless,

Charlie Jewett

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Tags: Estate Planning, Insurance Planning, Long Term Care, Retirement Planning

Take a look at this illustration of the full history of the S&P 500 which is a measurement of our economy and most variable investments. 

As the baby boomers have affected every industry that matched with their age you will see that the S&P 500 has gone up and up.  If you look closely at the last ten years you will see the market has had trouble continuing higher.  Now, in less than 3,000 days, two thirds of our country are going to be 62 years old or older and will start to sell off their stocks, bonds and mutual funds as they take income and move into safer investments.  What do you think is going to happen as the two thirds of our country who have the most wealth try to sell all those variable investments to the one third who don’t have much wealth (the youngest one third of people in our country)? 

Now, what if I could guarantee that your money would grow AS IF the S&P 500 went up like this:

What’s the higher probability that the market actually goes there as most of our country sells off their variable investments or that the guaranteed product beats out the actual market performance? 

If you like the idea of transferring all risk of losses and all risk of running out of money to someone else just give me a call. 

God bless.

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Tags: annuities, Estate Planning, Investments, Retirement Planning, Stocks

Over the years as I have talked with people about their finances a common response is “well, I already have a guy”.  They are referring to their Stock Broker, Money Manager etc. I say to them “well, do you have a Plan or do you just have a ‘guy’?  Who is deciding what that guy needs to do for you?  Who is holding that guy accountable for creating the results you’ve hired him to create?  Who has designed the plan (Blueprints) that tell that guy (Subcontractor/Technician) what he needs to accomplish to make your dreams come true?”  The answer…..no one in many cases.

Consider a different approach: in our working together we create a set of blueprints designed to accomplish your dream life.  As part of those blueprints we have decided that 40% of your assets are going to just go into the most conservative strategy possible which is a guaranteed actual 7% annual return with a guaranteed lifetime income stream when you retire.  We also decide that you want 20% of your money in our most aggressive strategy where it’s traded every single night for four hours attempting to “increase your wealth little by little to make it grow” and compound it daily to target 20%-30% a year.  With the remaining 40% we decide to use a traditional money management approach and target 8% a year. 

Now is when we need a “guy”.  But, you are the one (with my help of course) telling that guy what we want from him. 

“Mr. _________ we want 40% of this money growing at an actual rate of 8% per year.  How confident are you that you are the best choice for the job?  Ok, we are going to review this every quarter to decide how we like your performance and if we are ever unhappy we will be moving the money to another manager or another strategy, do you still want the job?”. 

That is how you get results: you have a plan that says what you want the experts to do AND you have someone holding them accountable to actually accomplishing those results. 

Now, with a plan, clear instructions, and my help keeping them (and every other member of your team) accountable you have a much higher chance of reaching your retirement goals and honestly will probably either retire ten years sooner or retire with much more income to enjoy your golden years. 

So ask yourself “do I have a plan or do I just have a ‘guy’”

If you just have a ‘guy’ give me a call and we’ll hold them accountable together J

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Tags: Estate Planning, Investements, Retirement Planning, Tax Planning

…..then fix it.  The heart of MERIT Planning (Blending your Mortgage Planning, Estate Planning, Retirement Planning, Investment Planning and Tax Planning) is really the following:

1. Every part of your financial plan is perfect and working in perfect harmony with all the other parts….or
2. They are not.

If not then at some point you will suffer in some way and regret it. 

Here’s what I suggest: let’s take a more careful, thorough and conservative approach.  Let’s do this:

1. Let’s review each part of your plan individually and also evaluate how harmoniously they work together with the other parts.
2. If I find they are perfectly optimized I will pat you on the back and say “great job” and you can have peace knowing you are ready for anything.
3. If I find that all parts are not perfect I’ll explain what I find and fix it for you. 

Keep this in mind: in working together you have nothing to lose except the money you are already losing!

If you want my help just let me know,  

God bless

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Tags: Estate Planning, insurance strategies, Investments, Retirement Planning

I am always looking for new strategies and new ways to help my clients and loved ones to accumulate, protect and grow their wealth and recently I found a really good one. 

Basic Idea: Every time you lose a dollar you not only lose that dollar but all the compound interest you could ever have earned on that dollar for the rest of your life.  I knew this part and have covered it in the Wealth Transfer video on the video section of my website (http://meritplanning.com/videos/)

What I did not know, or was not grasping fully, is that for most American’s the amount of money that they lose to wealth transfers, if recaptured and redirected to investments, would actually accumulate to MORE than they will actually have from their planned retirement savings strategies.  So most of us are not only completely wiping out all benefit of our savings plans with the inefficiencies in our plans but losing more money than we will accumulate!

In other words for someone who plans to have let’s say 1.5 million in savings by the time they are 67 when we look at their wealth transfers, and redirect them to earn compound interest, often that money WOULD HAVE accumulated 2 million, 3 million etc.  Just addressing the money they are losing unknowingly and unnecessarily creates more assets than all of their focused planning!!  This made me think that wealth transfers are the most important thing to address and then we can address how to protect and grow the accumulated assets created from savings plans. 

Guess what?  I wanted to see if I had any wealth transfers as I focus on this stuff all day long.  I did J  There are twenty one standard places we are taught to look and I found wealth transfers in my Taxes, Car Insurance, Home Insurance, Life Insurance etc.  Its amazing how hard it is to see where we are transferring our hard-earned dollars (and all the interest we could have earned on them) to other people in this busy life.   

Here’s my message: Don’t transfer any of your hard earned money to anyone else unless you know about it and want to be doing it for something you get in return!

I’d like to help you look and see if you have any of these Wealth Transfers in your life so let’s get on a call or webinar in the near future.   Just shoot me an email or phone call if you’d like my help finding this lost money and redirecting back towards your goals. 

God Bless,

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Tags: Financial Planning, Investements, Retirement Planning

Everyone (including Financial Advisors) needs to decide “where do I start” when trying to optimize our financial plans and strategies.  I think it’s possible that we have been starting in the wrong place.  Let me tell you what I mean.

The three types of assets each of us has in our lives are:

1. Lifestyle Assets: The money you spend on your home, food, school, cars etc.  What it costs to live the way you want to live.  This is not a real exciting place to go find money to invest more for retirement.
2. Accumulated Assets: The chunks of money you have saved up over the years in IRAs, 401ks, CDs, Insurance Contracts, Annuities etc.  This is where most Advisors and clients start and the goal is usually “how do I make a higher rate of return so I don’t have to work until I am 90?
3. Transferred Assets: This is the money that you are unnecessarily and unknowingly transferring away to others through overpaid taxes, inefficient mortgage structures, credit card interest, misuse of qualified plan contributions, car loans etc. 

My thoughts are that we may have been starting in the wrong place for all these years.  To make higher interest in our accumulated assets we generally need to take more risk which means if things don’t go as planned we end up even further behind than when we started.  For example: to make an extra $6,000 in an $100,000 account we need to earn another 6% each year on top of whatever we currently earn.  To do that involves taking a lot more risk in most cases. 

Now, if we start by eliminating all of the transfers or wealth in our lives first it’s a very different story.  To make an extra $6,000 a year for retirement (most of us are way behind on saving for retirement in the States) we only need to find $500 a month of transferred assets like overpaid taxes, interest on car loans and credit cards, inefficient mortgage planning etc.   I can tell you after five years of looking at financial plans from people all over the country that $500 a month is on the low end of what we find and can easily fix. 

My point here is that if there is no risk at all in finding money you are currently losing and investing that for retirement then maybe we should start there first and then after that look to your accumulated assets and ask “should we keep them where they are or move them elsewhere for more safety/higher returns/better tax treatment etc.?”

No matter what order you go in make sure that you have a good Wealth Transfer Specialist on your team in addition to your Stock Broker, Money Manager or Investment Advisor who focusses solely on accumulated assets. 

God Bless you with much success,

Charlie Jewett

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Tags: annuities, equity management, Estate Planning, Financial Planning, insurance strategies, legacy planning, missed fortune, Mortgage Planning, Retirement Planning, Tax Free income, Tax Planning