Most retirees are concerned about long-term care costs. Yet, most people take no steps to mitigate the risk of high costs let alone develop a solid strategy to finance those costs. In this episode, BoomX guest Brian Ott of 525 Advisors explains the ins and outs of long-term care costs and solid tips on making the right choice. Brian Ott is a Retirement Income Certified Professional (RICP), i.e.a financial professional who specializes in retirement income planning. RICPs advise retirees and near-retirees as to the best way to use the assets they have accumulated for retirement to live comfortably within a realistic budget and not run out of money prematurely. You can learn more about Brian and his business by visiting www.525longtermcare.com.
This episode is sponsored by SC Financial Group, LLC, located at 1417 116th Ave NE Suite 202, Bellevue, WA 98004. You can reach SC Financial Group by calling (425) 451-2950 or visiting their website at https://scfinancialgroup.com. (Securities and Advisory Services offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member SC Financial Group LLC and Cadaret, Grant & Co., Inc. are separate entities.)
SC Financial Group, LLC, was founded by Shane Cloninger. Shane Cloninger has over 30 years of experience in financial services. He is a co-founder of SC Financial Group, LLC and a registered principal of Cadaret, Grant & Co., Inc. Mr. Cloninger graduated from Southern Connecticut State University in 1990 with a Bachelor of Science degree in Economics/Finance.
He is currently a co-host on the ‘Retirement Freedom’ radio show, a live call-in talk radio show developed to help the average investor gain clarity on a very complex financial world. ‘Retirement Freedom’ is in its 9th year on air and can be heard live Saturdays at 10am on 820 AM KGNW, simulcast on 1590 AM The Answer. The show has been on other stations in the past including KVI 570 AM and KKOL 1300 AM.
You can obtain a FREE retirement planning roadmap mentioned in this episode by clicking this link.
In this episode, you will learn that there are five levels of care. Home care, Assisted Living Facility Care, Memory Care, Group or Adult Family Home, Skilled Nursing. Parenthetically, each Assisted Living Facility offers services by their own "levels", usually one through nine levels or "ala carte". Ala carte refers to a menu of services a new resident can select, regardless of the level.
You can pay for long-term care in one of three ways: 1) private pay, i.e., your own funds, 2) government benefit programs such as Medicaid, state waiver programs, or veterans' benefits, or 3) insurance that pays for long-term care. Long-term care is defined as custodial care after 100 days. Medicare does not pay for long-term care. Medicare is a government-sponsored chronic insurance program for people over 65. Part A of Medicare will cover part of the first 100 days of skilled nursing care if certain conditions are met. Medicaid is the national benefits program for long-term care.
Long-term care is either premium-based or asset-based. Premium-based policies are analogous to car insurance policies in which the insured pays monthly premiums for a month of coverage. When the premiums are not paid, the coverage lapses. Policies vary in cost depending on the health and age of the insured and the levels of care desired.
Asset-based policies are structured as lump-sum deposits in which the initial premium is invested by the company and the return is used to grow the value of the deposit and also offer long-term care benefits if the insured becomes ill. Unlike premium-based policies, an asset-based plan can grow and when the policy terminates the insured can have his or her premium returned with interest. This assumes, of course, the insured did not become ill and did not draw on the policy to pay for care.
These policies can be structured in different ways. There is no guarantee of a return of premium or a positive return because circumstances and policies vary. It is possible to structure a plan with both types of policies.
You should contact Brian Ott or another long-term care professional to discuss your situation rather than roll the dice and hope for the best.
