Holistic Retirement Planning

Do you know all of your options?

What are your retirement weak spots?

There are some all too common retirement weak spots that could greatly impact your overall retirement plan – and they aren’t all investment based. Some of these weak spots include misjudging the costs of medical expenses in retirement, including not fully understanding the complexities of Medicare, Medicaid and Medicare supplemental insurance. It also includes the consideration of long-term care, life insurance, and how you may want to handle your estate.

In addition, Social Security plays a large roll for most retirees. One of the biggest retirement questions we all have is, “When do I claim my benefits?” This question is different for everyone, and how your Social Security claiming strategy plays out may depend on the other factors involved in your holistic retirement plan.

Make no mistake, a holistic retirement plan sharpens your focus. It can refine dreams into goals and express a strategy to pursue them. It will integrate all of the important factors of your retirement, including those weak spots we may not think are truly important.

Areas of Holistic Retirement Planning

For many, Social Security could replace a significant portion of pre-retirement income. With this in mind, it could pay to maximize when you elect to receive benefits. If you’re married, you’ll also want to partner with your spouse on the timing of benefits, and how to get the most, depending on your lifestyle. Any discussion about your options for applying for Social Security should include your financial advisor. And you’ll want to iron out any potential tax implications with your accountant.

Medicare planning is integral to your retirement planning. Should you try original Medicare for a while? Should you enroll in a Part C HMO with the goal of keeping your overall out-of-pocket health care expenses lower? There is also the matter of eldercare and the potential need for interim coverage (which will not be cheap) if you retire prior to 65. These are all important matters to discuss when it comes to holistic retirement planning.

You have an estate. It doesn’t matter how limited (or unlimited) your means may be, and it doesn’t matter if you own a mansion or a motor home. 

If you don’t leave behind an estate plan, your family could face major legal issues and (possibly) bitter disputes; making the plan may leave you with the comfort of knowing that your wishes will be carried out, when the time comes. Your estate plan could include wills and trusts, life insurance, disability insurance, a living will, a pre- or post-nuptial agreement, long-term care insurance, power of attorney, and more.

We can help you organize the financial aspects of your estate plan and work with your attorney and CPA or tax professional to make sure you have everything in order.

What happens in retirement and you lose a spouse?  There can be a significant loss of income for the surviving spouse when this takes place.  There can be lost or reduced pensions, lost Social Security, and reduced annuity payments to name a few.

We guide people though a “Lost Income” workflow that can help calculate the lost income for each spouse in a scenario of losing a spouse.  This planning process helps prepare the surviving spouse for a way to replace as much of the lost income as possible.

Don’t leave your loved one burdened with a massive income shortage.  With proper planning your spouse can be prepared.

Long-term care insurance pays for services when you need help taking care of yourself because of a chronic medical condition, disability, or disorder such as Alzheimer’s disease.

A policy can help pay for assistance with routine activities, such as bathing or dressing. Most policies will reimburse for care given in a variety of places, such as at home, in a nursing home, assisted living facility, or adult day-care center.

Why buy long-term care insurance:                                                                                                                                                                           
Chances are you’ll need long-term care at some point in your life. Among 65-year-olds, 70% will use some form of long-term care, according to the U.S. Department of Health and Human Services.

Regular health insurance doesn’t cover long-term care. And don’t think that Medicare will come to the rescue; it covers only short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab. It does not pay for custodial care, which includes supervision and help with day-to-day tasks.

If you don’t have insurance to cover long-term care, you’ll have to pay for it yourself. You can get help through Medicaid, the federal and state health insurance program for low-income people, but only after you’ve exhausted most of your savings.

People buy long-term care insurance for two reasons:

1. To protect their savings.  Long-term care costs can deplete a retirement nest egg quickly. The median cost of care in a semiprivate nursing home room now tops $80,000 a year, according to Genworth’s 2015 Cost of Care Survey.

2. To give more choices for care. The more money you can spend, the better quality of care you can get. If you have to rely on Medicaid, your choices will be limited to the nursing homes that accept payments from the government program. Medicaid does not pay for assisted living in many states.

Buying long-term care insurance might not be affordable if you have a low income and little savings. The National Association of Insurance Commissioners says some experts recommend spending no more than 5% of your income on a long-term care policy.

How long-term care insurance works:
Long-term care insurance helps pay for care up to the policy’s limits. The policies usually cap the amount paid out per day and the amount paid during your lifetime.

Under most long-term care policies, you’re eligible for benefits when you can’t do at least two out of six “activities of daily living,” called ADLs, on your own or you suffer from dementia or other cognitive impairment.

The activities of daily living are:

  • Bathing
  • Caring for incontinence
  • Dressing
  • Eating
  • Toileting (getting on or off the toilet)
  • Transferring (getting in or out of a bed or a chair)

The insurance company will review medical documents from your doctor and may send a nurse to do an evaluation. Before approving a claim, the insurer will need to approve your “plan of care.”

Most long-term care policies impose a waiting period before payment begins, called an “elimination period,” such as 30, 60, or 90 days. The policy starts paying out after you’re eligible for benefits and usually after you receive paid care for that period. Most policies pay up to a daily limit for care until you reach the lifetime maximum.

Some companies offer a “shared care” option for couples when both spouses buy policies. This lets you share the total amount of coverage, so you can draw from your spouse’s pool of benefits if you reach the limit on your policy.

Contact us if you would like to learn more about long-term care insurance.