With the new year upon us, now is the time to appreciate all the good stuff and think forward about the future. Avoid being nearsighted in planning for longevity. Spoiler Alert – It’s not about you.
Rather than thinking about statistics or longevity, weren’t we all just 29 anyway? Instead, let’s reframe the conversation to thinking about the consequences, of not having a plan will do to those you love.
In reality, long term care, is something that happens to your family. Caregiving results in difficult decisions and economic consequences. No one wants to be a nurse or a purse.
Karp Loshak LTC Insurance works with individuals and families who want to protect those they love from the emotional, physical and financial devastation created by a family member needing care over an extended period of time.
There are three kinds of consequences; emotional, physical and financial.
The good bad and the ugly, except it’s mostly ugly.
Picture this – 3 or 4 siblings who have busy lives of their own; marriages, businesses, children, mortgages, 401Ks, 529s, Moreover, these siblings have unlimited discretionary time, money and always agree on the big stuff. Wait, don’t they?
Three adult kids, who fall back into their respective roles, do not usually share the burden or the responsibilities equally or equitably.
It takes time, energy and resources to traverse the medical system, social services and manage caregiver demands. They will still need to deal with those issues but will not have to worry about care choice when a LTC Insurance plan is in place.
Long term care burdens the well spouse and children and challenges blended families. Are we feeling joyful or resentful? Especially if all siblings are not in the same financial situation? It’s emotional. Just keeping it real.
Providing care becomes all consuming. The family member who is providing care, will experience a decline in their qualify of life. If no insurance is in place, regardless of “how much money “ may be resourced, the healthy spouse will ultimately wind up acting as caregiver. Providing care to chronically is people makes healthy caregivers chronically ill.
Caregivers are compromised, exhausted and less vibrant. The joie de vivre, has evaporated, vanished and faded. It’s not a walk in the park.
Lets get practical- you are the numbers people, after all. Care giving and chronic care is expensive and is not covered under your health care insurance or medical supplements. It is either out of pocket or you’re on government assistance. Let us know what the tax laws say in 20 and 30 years, and we will let you know what Medicaid (government assistance) looks like. Fair?
Present value dollars are after tax dollars with opportunity costs and are tax inefficient. Future value dollars will demand significantly more from your portfolio given the rising costs of health care and inflation. The “grey tsunami” is here. It’s really hard to get help, and expensive to get good help. Hard stop.
Long term care is the largest unfunded risk to your portfolio, your family’s well being and threatens to disrupt assets and income and creates wealth transfer conflicts and pressures multi-generational families and competing financial needs.
What’s your plan?
Where is the income going to come from? Perhaps consider this is you’re presently “self funding “, which is to say you have not spent the time to get educated. How are you going to pay for an extended care need?
Invasion of retirement portfolio?
Compromised income stream for well spouse?
Disruption to your asset allocation?
Oh, yes, your discretionary money! Wait, nothing is discretionary?
Your lifestyle, your club, your second home – you do not want to give up anything. Frankly, who can blame you? No one wants to compromise lifestyle. You have worked too hard for too long.
Without a plan the financial impact could be devastating to the family and any continuing financial obligations.
Rather than look at long term care at happening to you, think about it as something that is happening to your family. LTC is not a “him or her “ problem, it’s a “them” problem.
Super Hero CPA or just plain CPA?
Many people are unaware of the problems they can experience without proper planning. How would you feel if you could help your client plan for longevity? And, more specifically, encourage them to get educated? on appropriate and suitable options ( age and health are the metrics)
If your clients are women near or over the age of 50 and are experiencing life transitions- empty nests, semi or full retirement, divorce, loss of spouse, etc. In each transition, their financial well-being is a defining issue.
If your clients have blended families with adult children where everyone and “no one “ is in charge.
If your clients have families they love and care about who are thinking about the consequences, planning for independence will have a profound influence on their future.
You are in the position to be a superhero CPA or plain Jane CPA; which do you prefer?
Gifts from the Government, yes, really.
Consumers are encouraged to take action with a multiple of tax incentives:
- NY State Tax Credit of 20% on total LTC premiums
- Federal deductions for business owners or those who itemize medical expenses
- HSA accounts can be used to pay standalone LTC premiums
- 1035 exchange using cash in life insurance to purchase LTC tax free
The landscape of planning options includes Life and LTC linked benefits, asset based and hybrid solutions. Traditional long-term care insurance can be designed with shared care plans for married or domestic partners. Plans can be designed for maximum flexibility – allowing informal care and paying cash benefits.
Financial experts and superhero CPAs agree that without long term care planning, your family’s financial and personal lifestyle goals are incomplete. We look forward to helping you extend your superhero reach.
Natalie Karp, MBA, CLTC and Rona Loshak, MBA, CLTC are independent brokers who affiliate with all the leading LTC Insurance carriers. The duo is trusted source of information on Long Term Care Insurance for individuals, business owners, and employer groups. Exclusively focused, their expertise includes traditional (stand alone) Long Term Care Insurance policies, Hybrid Life/LTC plans, Life with LTC riders, financing LTC Insurance, and providing LTC Insurance with tax and estate advantages. Award winning specialists with recognition from Congress and State Senate, Goldman Sachs 10,000 Small Business and Long Island Achievers’ Honorees.