Long-Term Care (LTC) Options as You Age

By Trilogy Financial
September 23, 2019
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People are living longer – that’s a fact. Unfortunately, all those additional years aren’t always spent in optimum health. With longevity comes the complicated question of how to pay for the necessary health care for those additional years. Costs for unexpected and long-term chronic care are rarely covered by Medicare. People are having to face these costs on their own. Thankfully, the right type of planning can make this task less daunting.

Long-term care can be an overwhelming topic. The statistics are sobering. 52% of people turning age 65 will need some type of long-term care services in their lifetimes, and 14% will need long-term care for longer than five years. With the median annual cost of adult day care averaging $18,200 and assisted living facilities at $45,000, the financial implications can be staggering. It can sound like a complicated topic, but the way to protect you really boils down to three options.

  • Self-insure: This is the option that many select by default because they don’t want to think about the possibility of illness creeping into their future. It’s a scary option, which they hope won’t happen to them. However, this option typically leaves them unprepared for the medical costs that eventually do occur.
  • Long-term Care Policy: This is a good form of financial protection as it covers your risk but won’t wreck your financial plan. However, the down side with such a policy is that if you don’t use it, you lose it.
  • Accelerated Benefit Riders (ABR’s): Lastly, you can invest in life insurance you don’t have to die to use. These riders in your insurance plan will allow you to receive your benefits prior to death due to terminal, chronic or critical illness. The ABR’s will cover your risk, and you’ll still receive the benefit if you don’t need to use it for long-term care purposes.

Now, there is no one-size-fits-all solution. It’s always best to meet with your trusted financial advisor to find the right option for you. Just know that when you do take the time to plan ahead and find the right option for your particular situation, you’re not only providing for your future but also your peace of mind as well.

[i] https://www.morningstar.com/articles/879494/75-must-know-statistics-about-long-term-care-2018-edition

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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By
David McDonough
May 31, 2019

It’s graduation season, and there’s an excitement in the air about starting a new chapter. Mixed in with this excitement is an element of stress to make the right decisions: decisions on how things should be done, when they should be done and where they should be done. All these decisions are common, but they often distract from the purpose of what comes after high school.

We need to remember that higher education has a purpose. It’s more than an experience. The purpose of a college degree is employment. It is an investment, and as with any other investment, you should be calculating the return on that investment.  Spending $100,000 for a degree that secures a job with an annual salary of $40,000 is not the best rate of return.

There are plenty of creative ways to get a great college education without breaking the bank. Parents can start a 529 plan, the earlier the better, to help cover costs. Students can begin their higher education at a community college or secure college credit via Advance Placement (AP) exams. Additionally, students need to be sure that the field they are spending their time and energy on is going to reciprocate by providing solid career opportunities.

Making the wrong decision is not simply an unwise financial move. It can have lasting implications. Recent figures show that outstanding student loan debt has reached $1.5 trillion[i]. Our younger generation is not only struggling under this debt, they are also pushing off other personal and financial milestones, such as purchasing a house[ii], getting married or starting a family[iii]. These decisions can have long-lasting and far-reaching consequences.

Lastly, let’s not forget the countless parents who put their path to financial independence on hold to financially assist their struggling children. While wanting to financially help your loved ones is admirable, it helps no one to offer assistance at the expense of your own security. Just like when traveling by airplane, you need to put your own oxygen mask on and secure your safety first before aiding others. There are no scholarships for retirement, and you won’t have a financial safety net for the future if you don’t work towards creating it now.

College is truly an exciting time. Our young adults are learning who they are, where they want to go and how they intend to get there. At the same time, we cannot forget that college is a fleeting moment, one that is meant to arm the student with the tools needed to create a brighter and more successful future. Be sure to chat with your students to ensure that this experience does just that, rather than straddle these students with debt and stress.

[i] https://www.marketwatch.com/story/student-debt-just-hit-15-trillion-2018-05-08

[ii] https://www.businessinsider.com/student-debt-preventing-the-us-from-having-normal-housing-market-2019-5

[iii] https://www.bankrate.com/loans/student-loans/student-loans-survey-february-2019/

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

Disclaimer:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Stock investing involves risk including loss of principal.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Investing in mutual funds involves risk, including possible loss of principal.

The principal value of a target fund is not guaranteed at any time, including at the target date. The target date is the approximate date when investors plan to start withdrawing their money.

No strategy assures success or protects against loss.

By
June Adams
January 31, 2022

Tax-related fraud and identity theft have continued to grow, with millions of people becoming targets. Scammers need little more than your Social Security number and other general information to file a fraudulent tax return and hijack your tax refund. Taxpayers typically don’t discover the fraud until they attempt to file their own returns, which is why it's essential to file taxes as soon as possible. At the same time, you may want to confirm the appropriate timing with your tax professional. Although 1099s are due by the end of January, custodians may correct 1099s throughout February. If drastic changes happen to a 1099 after you file your taxes, the change can severely impact the amount you owe.

 

Here are some helpful ways to prevent your SSN from being compromised:

  • If you have been a victim of identity theft, complete  IRS form 14039, identity theft affidavit.
  • Respond immediately to any IRS issued notice once you verify the authenticity of the notice. You can do so by calling the IRS directly at 800-908-4490 or setting up your  online account.
  • Get an Identity Protection PIN: a 6-digit number that prevents someone else from filing a tax return using your Social Security number or individual taxpayer identification number. Only you and the IRS know the IP PIN.

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