Haven Financial Group Radio
Haven Financial Group Radio - 6/30/24
You're tuned to the Haven Financial Group Radio Show with your host, Larry Colvig and Kim Carrigan, your guide to weekly retirement confidence. If you're interested in protecting and growing what you have, let us be your financial safe haven. The phone lines are always open at 612-504-8400. Now, get your financial questions ready because the Haven Financial Group Radio Show starts now. Welcome listeners. Good morning. We're listening. My name is Larry Colvig, founder and CEO of the Haven Financial Group. We're going to discuss many things today on Medicare, long-term care. Kim, it's good to be with you. And we have a new person on today, Glenn Raimi, who handles all of our insurance, he's a retirement insurance specialist, long-term care, Medicare, life insurance reviews, all of those really exciting topics that are so important and, again, good to be with you. We've got a great show ahead of us. We certainly do, and it is great to have you with us, Glenn. I'm going to look forward to your expertise during the course of this show. I think this is one of those topics that a lot of retirees don't maybe factor in immediately when they start thinking about retirement and then realize how important this is as they continue to plan. It may not be, you know, the brightest lights and the most exciting, shiny things, but boy, as you said, Larry, this is important stuff. So let's talk about the ways that health care and long-term care factor into your retirement planning. Let me give you a sense of the show today. We're going to first start with an overview of covering medical expenses in retirement, then how Medicare works in retirement, then we're going to address long-term care needs, which is so very important. And finally, the six pitfalls to avoid when you're planning for long-term care. So we've got a great show ahead of us, folks, and very much looking forward to, again, Glenn Raimi being with us. He's a retirement insurance specialist, so it's terrific to have you with us. So Glenn, let's first just get started talking about an overview of covering medical expenses in retirement. Again, this is something that a lot of people have had covered in their work life by their employer, and then that time comes when you're ready to step away and you have to make some of your own arrangements. So let's start there with some of the costs and maybe, you know, an idea of at 65 years old, what this might cost you in a year to cover your own insurance. Sure. I don't disagree with you. A lot of my own presentations start out with the fact that I don't blame anyone for feeling confused and intimidated by this topic, having had insurance through employer their whole life, and then suddenly having to rely on themselves picking their insurance and understanding the impact of those decisions. Medicare can have a range of costs depending on exactly what you're doing in your financial situation. I always like to tell clients you have a base price of Medicare. That's the cost of the government, your cost of Part B of Medicare. Your Part A was prepaid with your taxes. And then you have the additional cost of your Medicare advantage or Medicare submit plan and drug plan premiums that would go along with those coverages. And that's often where people are mostly focused is on the budget. How much is this monthly cost going to be for me and it very much varies by region. I would say safe to say if you're a low income individual, you might not pay anything for that healthcare, being on medical assistance or Medicaid and Medicare at the same time, or you might be paying a very large fee because of higher income. So there's means testing to Medicare premium on top of just the base premiums that someone might pay in that situation. But the thing that people often forget to also look at on top of that is the out-of-pocket expense that's going to occur on that policy and the potential for that out-of-pocket expense to increase over time. Well, one of the things that you hit on right there, Glenn, that I think a lot of people don't realize is that your insurance costs are certainly income based. So when we start to look at social security, that certainly plays a part in how much you may have to pay, correct? Correct. Yeah, there's something called Irma, an income-related monthly adjusted amount in Medicare. It's basically a means testing that if your income as a single individual or a married couple on a two-year look back at income is over certain amounts that do get updated with inflation every year, you could be paying more than that standard rate for Medicare. That standard rate today is $174.70 per month, but I have clients paying over $560 a month for that Part B benefit because of that higher income that they have. It's a two-year look back. So does that adjust with time? Correct. It's something that's reviewed on an annual basis. You're not locked into that price. It's reviewed every year on a two-year look back to determine what income you had during the price of Medicare. It's also worn clients. You can have occasions where you might have an influx of income after you've started Medicare. Five, 10 years in, you get an inheritance because a parent passed away, you sell a property, you liquidate an after-tax asset, and suddenly you have an influx of income, and two years later, you get notified by Medicare, the impact of that to your healthcare premiums. Okay. So that's something very important for everyone to keep in mind. And certainly, when you're making your retirement plan, that's something you want to be looking out and considering, right? Correct. Yeah, you've got organizations like Moody's and Poor Expecting that outside of long-term care costs over the counter medications, you can experience up to $315,000 in healthcare cost in your lifetime. Okay. Let's talk about Medicare coverage. Now you mentioned it A and B, but let's walk through that because I think this is really confusing for anyone who's never been involved in this kind of coverage. Sure. So I'll put in the simplest terms I can for us here. A and the simplest terms are inpatient benefits of Medicare, covering hospitalizations, skilled nursing facilities, hospice care, and limited home healthcare. And we pre-pay for Medicare Part A with our taxes. That's that Medicare line on your paycheck as that Medicare tax is happening there. And then Part B is the one that you have a premium. And Part B in the simplest terms is your outpatient benefits, right? It's your doctor appointments, your diagnostic testing, your outpatient surgical procedures, and also include durable medical equipment like crutches, wheelchairs, walkers. All of that is covered by that Part B benefit as well. Okay. So which part am I paying for? You're paying for the Part B at the time you start Medicare and you're pre-paying for that Part A with your taxes your whole life. Okay. Let's remind everybody that they're listening to the Haven Financial Group radio show and joining us today is Glenn Rainey. He's a retirement insurance specialist with Haven Financial. Larry is with us as well. Larry, we're not leaving you out by any means, but I don't feel neglected at all. This is a very important topic. None of us are going to live forever, sorry to say the mortality rate in the state of Minnesota and throughout the country is a hundred percent, unfortunately. So we got to be realistic because he's Glenn's mentioning prices over a lifetime, over three hundred thousand dollars and planning for that is so important. And let's face it, these discussions are not fun. And it's a new season of life and it's why we teach so many different classes, Kim. I remind listeners that Glenn teaches a Medicare made simple, which isn't simple, and he'll talk later about changes that are coming down the pipeline. You don't have to do it alone. You can work with somebody. You don't pay anymore to help you navigate through this health care and then keep you abreast on when changes happen. So it's great to have them with because people need this information. Absolutely, they do. And if this is something that you need some help with, you are invited to sit down with some of the specialists there at Haven Financial. Let me give the telephone number, 612-504-8400, that's 612-504-8400, you can also check them out at havenfinancialgroup.com. Then let me go back, we've talked about A and B. Medicare doesn't cover long-term care. That's for sure. And I would say it has limited benefits connected to long-term care. It can cover up to 100 days of skilled nursing that's inpatient benefits in a nursing facility. If it's preceded by an inpatient hospital stay of three days or longer. But the statistical average actually paid by Medicare is 27 days, and that's because that's according to recovery. Medicare is covering you while you're in that facility while you're recovering from an acute health care event. And the moment that therapy will not improve you any further, that's where Medicare would stop that even before that 100 days is up. And then let's talk about my prescription drugs because how do I get those covered or at least get some aid with that? Yeah, so Medicare has what's referred to as a part of the prescription drug plan in Medicare, either integrated into Medicare Advantage plans or purchased separately with Medicare supplements. And I always remind clients that is probably the number one thing that you need to pay attention to. I don't care what side of the aisle you're on, always I say New York Times and Fox Business have also had this that the number one thing people should be doing is reviewing their plans at the end of the year based on their prescription drug coverage during the annual moment period with an average savings of $700 per month individuals that are exercising this right we have to review coverages and make sure that we have the most efficient and effective coverage we can have for ourselves. And Glenn, you mentioned something else while talking about that coverage and that you talked about supplements that that's also a very important part of this healthcare issue when you're in retirement. I would agree. People should know that they have two options available in healthcare and Medicare. You were either going to choose to do a Medicare Advantage plan also referred to by Medicare as Part C of Medicare or a Medicare supplement plan also referred to as a Medigap insurance policies and I remind people in my presentations all the time that this is such an important decision that you need to make sure you have both of these options understood that you understand what a Medicare Advantage plan is, how it works, what are the pros and cons of Medicare Advantage plan compared to what a Medicare supplement plan is, how that works, what are the pros and cons there and I say that's such an important conversation to have because often consumers don't know that they're only guaranteed the ability to buy both of those options based on their Part B starting date within six months of that date. They're allowed to buy any type of Medicare plan that they want to but that one supplement policy no longer is required to be offered to you after six months. You have to qualify based on your health to get it in the future and if someone came to me and said, Glenn, what's the plan in Medicare that just pays my medical bills the most and leaves me with the least out of pocket in those medical bills, it's going to be the Medicare supplement plan but again, we can't wait till we have those medical bills to buy that plan because that's the exact reason we'd be rejected for it at that time. Sure. Glenn Raimi is our guest today. He's a retirement insurance specialist with Haven Financial Group. The number is 612-504-8400. You can reach out to the team at Haven Financial. Talk to them about these issues. This is a lot of information that we're going to pump at you in an hour and I don't think anyone expects everyone to walk away from this fully informed but what we're just trying to do is enlighten you a bit about this long-term care as well as medical coverage during retirement and how important it is to have a plan. Gentlemen, when do we come back? Let's talk a little bit more about who's eligible at what time, what's the best time to start this kind of planning and a little bit more about how Medicare works right here on the Haven Financial Group Radio Show. Don't go too far. We're gathering more important insights and retirement wisdom. The Haven Financial Group Radio Show will be right back. Stick around. You've got questions? We've got answers. You're tuned to the Haven Financial Group Radio Show with your host, Larry Colvig and Kim Carrigan. No. Back to the show. Welcome back to the Haven Financial Group Radio Show. I'm Larry Colvig, on with Glenn Raimi, our Retirement Insurance Specialist. Great to have him with us talking about Medicare, health care and retirement, long-term care, Kim Carrigan, and notice you use the word enlighten. We want to enlighten, but we're not trying to depress our listeners with these topics, but they are so important because health care can be one of the most major expenses in retirement. So, if you have questions, give us a call, again, Haven Financial Group, 6125048400 or visit us online at havenfinancialgroup.com, lots of information, set up a time to come in and visit with Glenn. There is no cost for a consultation, and again, enlighten you, educate you. So when the time comes, you can make an educated decision. You know, Larry, I hope no one's depressed by hearing this. I hope what they are sort of fueled to get this taken care of. That way, you can sleep at night and you don't have to worry about these kinds of things and don't have to have questions. I think, you know, knowledge, and you've always said this to me, knowledge is really what everybody should be looking for, because if you're informed and if you have a plan, then these things can be, you know, done pretty easily, but you certainly need a plan. I want to ask Glenn, right there, starting with that subject, at what age do you think that people need to start to lay out this plan, and at what age are you eligible for Medicare? Sure. Well, the age we should start to plan is whenever you're comfortable, in my opinion. But in truth, right, maybe six months to a year before your 65 is a good time to start having that conversation about what you should expect to do and when you should expect to do it. To address the second part, we become eligible for Medicare for most of us based on the birth month that we turn 65 in. It'd be the first of that month, regardless of the day you're born, that your Medicare benefits can begin. With a few exceptions, if you're born on the first of the month, it'll let you start a month early. And if you're diagnosed with certain health conditions or are qualified for Social Security Disability, after two years of being on Social Security Disability, you become eligible for Medicare regardless of your age. Medicare is going to give you a seven month enrollment window connected to when you turn 65, both three months before and three months after that birth month, to get all of your Medicare in order without fear of being late at all. If you're collecting Social Security prior to turning 65, you'll get automatically enrolled. You'd get your card in the mail ready to go in the first of those seven months. If you're not collecting Social Security and want that to begin at that time, then you'd actively have to apply for those benefits, either through Social Security's website, ssa.gov, or by contacting a Social Security office. So Glenn, we talked at the very beginning of the program about the fact that this can be very confusing for people because they've been in private insurance plans for most of their working life, that those insurance plans that come through our employers. What if I am someone who works for a company and one of the benefits is that I can stay in that plan after retirement and through retirement? Is that something you suggest people do or what could be the benefits or the downfalls there? Yeah, I want to parse that out into two different categories for us. First would be still working. So not retired yet, but still working past 65. This is the one that has the most misunderstanding by consumers. I can't count how many times I'll have an appointment with someone the first time around coming in saying, "Hey, everybody's telling me I've got to sign up for Medicare. I'm going to face a bunch of penalties," but then they disclose also that there's going to still work and they're not retiring at 65 and that their healthcare is really inexpensive. They really like it. They have a younger spouse. Whatever the reason is, the question is always the same. Do I still need to start Medicare when I turn 65 if I'm still going to be working getting employer insurance? And the answer for most of us will be no, you don't have to start Medicare at that point. You can delay it as long as the employer benefits offered to you are deemed credible for Medicare, meaning as good or better than what Medicare would provide you for insurance. And if you have that insurance that's credible, now you're allowed to delay Medicare as long as you'd like to, with no age restriction on when you might join it, just based on when you separate from that employer coverage, now being the new enrollment date that you're targeting. For individuals that might have the blessing of having an employer that's going to offer them a retirement health plan, all my recommendation is to make sure to compare options. Make sure that you're looking at whether that is really an efficient policy that's well priced or whether there might be something more to your fitting in the private market. I just had a meeting today with a client who has offered a state worker, offered state benefits, and the state benefits in our state are actually much higher than the market would charge individuals for very similar coverage. So the importance of making sure to do comparisons, right, shopping things out is really important in that circumstance, regardless of whether or not there's a retiree health plan offered to you as well. And Glenn, you just said something really important in our state. And I think you mentioned this earlier, but you know, you can be sitting watching TV and so you start to get inundated with, you know, call and this supplement and that supplement, but states are different and eligibility is different in different states. Correct. The basics of Medicare are going to be the same in those states, but what plans are offered in the area. They say Medicare is a zip code based purchase, right? It's based on where you live. I mean, if you change locations, depending on what type of Medicare plan you have, you might have to change your plan because of that. So yeah, your location is very much going to be a dictator to what's available to you. And let's go back to what you do and say with clients who come in and they look at you and they say, I am so confused. Where do you start with them? Well, I start by spending an hour or more with them, just educating them in the foundations of Medicare, right? What is it? What are the rules that we have to play by and what are the options and what are I going to go back to? What are the pros and cons of these options that we have available because in life, there's nothing perfect, including health care, right? We've got two distinctly different types of insurance plans available. And that's where I come back to laying a good foundation for a consumer to make a good informed, educated decision about what they're going to do for health care. I don't want to be the person telling people what they want to sign up for. I want to empower them to have the information that they can make a good decision about who in which insurance company they're going to sign up with. And I'm in there to help guide that process. And to me, I think that's what a good agent, a good broker of health care, should be doing for you. Before they're presenting or pitching a plan or company to you, they should have spent some time with you helping you understand the differences and nuances between these options and to make comparisons, right? Not just one policy recommendation, but show me two or three plans side by side with each other. And let me understand the nuances and differences so I can make a good informed decision. And Glenn, I know that you said that this is, you know, this is income based, but what do people do if they sit down and they say we did not plan well for this? And we're very fearful of the expense. Sure. We got two approaches that you could take to that. One would be to go with a lower costing option for health care with the idea that the savings over time can make up those differences and what I would roll in responsibilities or by budgeting just a higher monthly premium to eliminate those medical bills, but there's also other things that you can look at to try to help cover cost of Medicare. A one example, those is health savings accounts, HSAs that people might have. I recommend to everyone that has an option for an HSA and where it makes sense to utilize them and try to fund them not just for the immediate medical bills you might have, but for our future retirement bills too. A lot of individuals don't know that HSAs, health savings accounts, can be used to pay certain Medicare premiums and stay tax free money in that regard. So money I put in tax free and comes out tax free as long as I use it for eligible expenses. And when we become Medicare eligible, that eligible expense now includes the Part B premium of Medicare. The cost of a drug plan or Medicare Advantage plan in Medicare can out come out of my HSA instead of my IRA and 401(k) and that can be a known tax free budgeted expense and retirement if we plan properly. And to enroll in an HSA, you'd want to do that a little earlier in your life, correct? Perferably, yes. I've seen people do it towards the end and that's okay too, but ideally they're plans best suited when we don't have a lot of medical bills and we've got a little bit of expendable income going on. Yeah, absolutely. All the more reason, if you are someone who thinks, wow, that might be a good idea for me, but you know, I'm only 48, well, that's okay. This is the time now. So let's give my even financial group a call, it's 612-504-8400, it will cost you nothing to go in. Have a free consultation with Glenn. Talk a little bit about what your concerns are, what you want to accomplish when it comes to your healthcare and retirement and how to go about that. It's never too soon to start to plan for those kinds of things in retirement. Again, at 612-504-8400, HavenFinancialGroup.com is their website and you can check out some of those informative and educational seminars that are coming up, some of which will deal with medical expense in retirement. All right, gentlemen, when we come back, let's address long-term care needs. This is something a little bit different and there's lots of different approaches to this. So let's talk about that with Glenn Rainey and of course with Larry Colvig right here on the Haven Financial Group Radio Show. Ready to find your financial safe haven? Your dream retirement is in reach. Don't go away. The Haven Financial Group Radio Show will be right back. Are you worried that your financial strategy might be missing something? Well, you're in the right place. Larry Colvig is back and ready to help you find your financial safe haven. Welcome back to the Haven Financial Group Radio Show. I'm Larry Colvig, along with Glenn Rainey. I'm founder and CEO and he's a retirement insurance specialist. Give us a call, 612-504-8400 or visit our website at HavenFinancialGroup.com. Give us a call and ask any questions related to the topics of today, estate planning, tax planning, any retirement questions, that is our wheelhouse. And that's where we'd like to educate and help people make educational decisions. I always say, and Kim said it before too, education is the potential for power. It's what you do with that matters and we like to see people make educated decisions. So as we continue with long-term care, again, this can be a very big expense and this really hits home just last week for I had one of our clients call. She's been taking care of her husband for seven years and just retired a year ago to take care of him even more and she was just in recently and she said, Larry, I can't do it anymore. And I told her, I said, you're wearing your own body out. And because of that, she has to put him in a home and we helped her with the spend-down process and doing things that she doesn't want to do, but planning for the long-term care. Let's address this issue and Glenn enlighten us a little bit. Absolutely. First off, Larry, can I just say, you said that Glenn would be great and would be able to answer all of our questions and so far, that certainly has been the case. So it's a delight to have Glenn Raimi with us today. I was reading a study, Glenn, that says 70% of seniors will eventually have to have some form of long-term care, which is a bit shocking, I think, to hear. And I think a lot of people believe that my wife, my husband, my kids will take care of me. And certainly, I think intentions would be to do so, but there are a lot of times when that can't be the case. So we have to have some kind of other plan. First before we start about, you know, those talk to us about what different kinds of plans when we're talking about long-term care, what we'd be talking about, I know Larry just mentioned a home, I'm thinking about in-home care, give us a sense of what we'd be covering here. Well, I want to add another statistic to your 70%, which is that 50% of us should expect to spend some time in a nursing facility before passing away, so half of us. And the average stay-in-a-long-term care facility is about three years right now, right? A little less for a man, a little more for a woman, as far as those statistics are concerned. Care is happening at home through home health care. It can be happening through adult daycare facilities, so for children that are still working, taking care of their elderly parents, they drop them off in the morning and pick them up in the afternoon, just like in a child daycare service. You have assisted living facilities, so a mixture of independent and assisted living, and then you have actual skilled nursing or nursing home facilities that are care is happening at, and a progression often starting at the first going to the fourth that might be more than a three-year transition. So will Medicare pay for any of this that you've just mentioned at all, any of this kind of care? As we talked about earlier, very limited. As I mentioned earlier, Medicare can cover up to 100 days of skilled nursing facility benefits and undefined skilled nursing equals nursing home here. If it's preceded by a three-day inpatient hospital stay-or-longer, but I mentioned that's the statistical average of 27 days paid by Medicare, that's again because it's about recovering. And the moment you have permanent needs that you won't recover from, that's when Medicare is going to cut off that care to you and no longer help pay it. The home health care is limited to a certain prescription of time. It's not indefinite home health care for us. Again, it's about during that recovery period, having some assistance happening at home covered by Medicare. But when it comes to the actual long-term part of that, that's where Medicare steps away and says, "No, that's your responsibility, not ours anymore." So let's talk about skilled nursing facilities first and how, because the expense there is pretty dramatic. Maybe you could give us an idea of what the expense might be on average in the state of Minnesota, and then what the options might be to pay for that. Yeah, I mentioned right now the average in Minnesota, the median costs about 10,000 per month. It's about 120,000 per year in a facility. I also want to mention, knock on what most people are hearing this, probably are not, tomorrow, away from long-term care. If you put a modest 3% inflation on that cost, we're talking doubling that cost in the next 20 years. So someone's 60 today, by the time they're 80, a long-term care facility might be 250,000 a year, right? Wow. Yeah, that's a lot of money. That's a lot of money. That's a lot of money for anyone to put away and to plan for. So what do you tell people? What's the suggestion? How do you prepare for the possibility of long-term care? Yeah, and I understand it's a difficult one to prepare for. As you mentioned earlier, it's a costly thing. And by the cost we just went over, yeah, we're asking an insurance company to pay a very hefty amount of us for care that might be for an extended period of time that we're very likely to actually use, statistically higher than most other insurance that we have. So I'd say right now there's outside of self-funding, which is always an option, we're going to use up all our own money, or for those that don't have assets or savings, the medical assistance or Medicaid program can help us with long-term care expenses if we gone through a Medicaid spend down, something that I already touched on earlier. But for those that want to be proactive and do something about this, I'd say it's about four different methods of insurance planning related to long-term care. You have the traditional style of long-term care insurance, I think one that most people have heard about, you have other options less heard about life insurance with riders connected to long-term care. You have what are called hybrid policies, which are the first two, a traditional, and a life insurance policy combined together to be a long-term care plan. And you have a newer form of long-term care planning called asset-based long-term care planning as well, where you're setting aside savings to leverage against the long-term care expense without actually giving up the savings to do so. So what do you recommend, or maybe you're going to say it's individualized? It is individualized, truthfully, it's a lot depending on a few factors. What we have saved for retirement, obviously, and what we can budget in retirement is always going to be a factor. And there could be recommendations made for someone that has a modest savings for retirement compared to someone that has a large savings for retirement. As certain components in this insurance, I'll talk about the traditional long-term care as an option first year that have something called partnership qualification protection, which is asset-based protection against medical assistance or Medicaid. So for someone who might end up turning to their state to help them pay for long-term care, and going through that Medicaid spend down might be able to preserve more of their resources if they plan for this with even a modest long-term care insurance policy. We don't have to have a Cadillac plan to include some of that protection in that policy. And that's a dollar-for-dollar protection. Every dollar paid out in benefits equals a dollar that the state can't make me spend, and I can still qualify for them to pay for my care. If I may add to that, traditional long-term care is what people think of. And just this past week, I had a couple in their mid-60s go, and when I asked the questions, have you looked at long-term care and she's 64, and she goes, well, Larry, we're way too old to get long-term care coverage. And so they were misinformed. So people are familiar with traditional, but many people are unfamiliar with asset-based long-term care or long-term care for annuities or the hybrids. And this is a very difficult discussion because nobody wants to plan for the nursing home, but I can tell you that same couple that was in, her parents who are 86 and 85 in Park Rapids, Minnesota, and she goes, Larry, they didn't plan. They don't communicate. They never have, and they're four hours away, and she goes, I'm actually mad at my parents. I love them. I'm mad at them for not communicating this, and you know, we joke that a lot of people's long-term care plan is the kids will take care of me, and the joke is the kids don't even come by now, I'm not so sure that plan is going to work. So again, this is a major expense. High percentages of us are going to need it. Get educated on the options that are out there because it's changed drastically over the last 20 years. And if I could piggyback on that, two things I would add there, when it comes to family members being caregivers. If it's your spouse that you're choosing to be a caregiver for you, understand that you're affecting their longevity, statistically, a caregiver is going to have a mortality rate two years earlier than the average, the stress, not just the physical, but that emotional stress and strain of being a caregiver is there. And if you're relying on your children, understand that you might be taking them out of the workforce at a time when they're at their top earning years, and I've seen statistics is over 250 to 500,000 in lost earnings and savings potential by having that family member step out of that role to care for you for a period of time. Glenn, let me ask you, Larry, just said that the couple came in. They were 64 years old, so we're too old to get this insurance. What is a good time to be considering this kind of thing? And is there a time when you are too old? So yes, there is a time when you're too old, depending on your state. I'd say in Minnesota, it's age 80. So at age 80, they won't write a long-term care policy for you anymore. But the real barrier is often health. This is a health underwritten insurance product, meaning they get to review your health history and they don't have to accept you, depending on what might be in your health. So those individuals that are waiting till they're in their 60s, late 60s, early 70s, it's not impossible for them to get long-term care, but their health might be the barrier. The industry would tell you around your mid-50s is a great time to start planning for long-term care. I think realistically, people in their 50s aren't thinking about long-term care yet. Unless they're having a family member already experiencing it, it's one of those out-of-sight out-of-mind things. So most of the people I'm helping get long-term care are between 60 and 70 years of age. Does your health benefit you in any way, meaning if you have a good health, could your premiums be lower? Absolutely. For those policies that have premiums associated with them, they are very much affected by health. There's preferred underwriting classes, standard underwriting classes, and substandard underwriting classes. So you could be charged less than someone else your age for the same coverage because you're in excellent health. You'd be paying the standard rate people with some health conditions, but not too severe. Or you could be paying more than the average individual because your health was not as well when you try to pursue that insurance product. And talk about the life insurance with the writer. Yeah, so I say this one I think is best utilized for clients that are already going to maintain life insurance through their retirement years. It's a provision that allows you to access not the cash value, but your death benefit for long-term care. It's similar to an accelerated death benefit related to terminal illness, where they call it a chronic illness writer. It uses the same provisions, long-term care does, two activities out of six out of the daily living activities, or cognitive impairment requiring supervision, and that allows you to take a percentage typically 2 to 4% of your total death benefit to use for long-term care expenses instead until 100% of your death benefit has been used up. Very interesting. All right. Lots of options. So either your beneficiary is going to get the money because you didn't need long-term care, or you're going to get the money because you did. Yeah, absolutely. So a lot of different options out there, all the more reason to sit down with experts and learn more about these long-term care options. And we just heard Glenn say, you know, in your mid-50s, I know that you're not thinking about long-term care, but that might be the most beneficial time to do so. Haven't financial group, let me tell you how you get hold of them. It's 612-504-8400. Go in, sit down, and talk about what you're concerned about, what you hope to accomplish in retirement both, you know, with your health care, and as well as your long-term care, or for that matter, just your retirement plan as a whole. And this can all be certainly discussed within that discussion. A free consultation is yours. If you give them a call, it's 612-504-8400, or you can go to HavenFinancialGroup.com. Coming up next, we're going to talk about the six pitfalls to avoid when planning for long-term care. You're listening to the Haven Financial Group Radio Show. Don't go too far. We're gathering more important insights in retirement wisdom. The Haven Financial Group Radio Show will be right back. Stick around. We've got questions, we've got answers. You're tuned to the Haven Financial Group Radio Show with your host, Larry Colvig, and Kim Carrigan. Now, back to the show. Welcome back to the Haven Financial Group Radio Show. I'm Larry Colvig, founder and CEO of the Haven Financial Group. Thanks for listening. Give us a call at 612-504-8400, or HavenFinancialGroup.com. Pit falls to avoid planning for long-term care, and people fall into these pitfalls, underestimating the emotional toll. Glenn mentioned that, "Kim, this is a touchy subject. We know this, but extremely important, and not talking about it doesn't mean it's just going to go away, but open communication for family members and loved ones is just so very important." Well, you know, Larry, Glenn said something just a moment ago that really hit home with me. You're in your mid to late '50s, and you're not thinking about long-term care. You know, you're maybe just getting your kids out of college, and you're starting to think about this wonderful life that maybe you and your spouse have put together, and you've been looking forward to, but a lot of people in their '50s and their early '60s are taking care of aging parents, and this may be the light bulb that goes off with that generation to recognize that maybe some steps need to be taken, and pit falls need to be avoided. So Glenn, let's walk through some of these. And the first one Larry mentioned just a moment ago, underestimating healthcare costs in retirement. That no doubt would be a major pitfall. Absolutely. Yeah. As we just mentioned, 120,000 per year today with inflation easily getting to 250,000, 20 years from now, it's going to be a big cost. I hear Larry all the time mentioned, do we want to make the nursing home the biggest beneficiary of our retirement portfolio, right, as it's very well could be without proper planning and that circumstance? So when you sit down with people, do you tell them those numbers, and you must see a state of shock on their faces? Oh, absolutely. And it's still kind of hard to grasp, right? It's hard to grasp having to come up with 10,000 per month of unexpected payments that you have to be making, right? I'm going to say a lot of individuals that want to approach this topic or hesitant to do things about it, tell you've seen it real-world. To have watched a friend or family member go through this event, it's hard to visualize it being myself. I think there's been plenty of organizations that do surveys and there's a bit of a disconnect. People say, yes, long-term care costs should be a concern for people who will live a long time and then it's, will you be of someone, that person that lives a long time, the answer is no, right? We always think it's going to be that other person, the person across the table, they'll have the long-term care problems, but I won't. And the reality is, no, it's going to be the majority of us. Almost three-fourths of us are going to experience some form of long-term care before passing away. One of the pitfalls is delaying your decisions about this issue, right? Yeah, as I mentioned, not only do you have the cost, it is an age-based product, the older we are, the more expensive it is, but you're also gambling that you could have a health condition occur that could impact that ability to get that. And the reason the industry says you should be considering in your 50s is most likely, you have not had that significant health occurrence at that time. But once we get into our 60s, now the likelihood of having a significant health occurrence that could impact our insurability is far more likely to be there. Another pitfall, and we're talking about the six pitfalls to avoid when planning for long-term care, another one is just simply not factoring this into retirement. And let me step back just a little bit here and say, I think that a major pitfall would be not to plan for your medical care at all in your retirement plan. You're just thinking about how I'm going to live day to day and travel and see the grand kids and do this and do that. And the fact of the matter is, this could be one of your biggest expenses. Yeah, highly likely to be one of your biggest expenses in retirement if it occurs. Absolutely, and a high likelihood it will occur to you. And I say my colleague Larry has the fun job of telling people how well they save for retirement and how wonderful their retirement years are going to be. And I've got to come in and remind them that, hey, there's some stuff that might happen towards the end of our life that's going to be expensive and not fun, and it's hard to grasp or deal with that. And we often forget that we don't have to fully fund long-term care through insurance. Not everybody should or needs a Cadillac long-term care plan, right? We don't need a 10,000 monthly benefit to cover that cost. All our income sources do not turn off the moment we become sick. So we're often talking more about bridging a gap we have. How much more do we need coming in or do we want coming in to bridge that gap of our cost? And that doesn't mean that the retirement portfolio is completely taken off the table for that. We have some skin in the game, but how much we want coming from insurance and how much we want coming from our IRA is an important decision that we have to make. After estimating the emotional toll, Larry talked about this. The emotional toll on you and your family is a great one. And you even, I mean, I was so impressed. You had statistics about being a long-term caregiver can take years off of your life. Yeah. Anybody, and I'll add to this one, Kim. Anybody that's had to take care of a loved one or been in this position and you're listening, you know exactly what we're talking about. The client last week that I mentioned, she's wore down. She's just wore down. And that's why the survivor, whoever's taking care of you, their life expectancy gets two years shorter through the statistics. So the other one I think, Kim, is people sometimes feel like they don't want to seek advice and not seeking guidance from a financial person or a retirement professional. This can result in missed opportunities for tailored advice, personalized assistance. You don't know what you don't know. And if you don't consult somebody and talk to somebody and look at all the options, all the options, not just one of the options or some of the options, all of the options. And that why we again come back to the education piece and that is really Haven Financial Group's focus in any of these retirement areas or retirement puzzle pieces, as I call them. It starts with the education process. Again, why are our classes so full? Why do people attend them? People need to learn and they want to learn at least most people. There are those that put the blinders on and think that everything's going to be rosy for the rest of their life. And I wish that was the case, but we know that's not reality. Right. Gentlemen, let's talk about some of the potential new legislation and changes that could be looming on the horizon when it comes to long-term care. Yeah. So specifically, I know there's a discussion and legislation regarding a long-term care payroll tax. Again, the government's very concerned that it's the payer when we don't have the resources to pay. And what the government's finding is that there are individuals that have the resources that could have planned for long-term care, but chose not to and are relying on the state to pick up that tab for them. So the idea there was, well, maybe we'll have a national tax, a long-term care tax to give a baseline of long-term care benefits to everyone, whether they need it or not now, and now everybody's paying into that system, similar to what Medicare would be like. Is that something that has moved along on Capitol Hill, or could that be in the long future? I would say I'm not aware of it moving that far along Capitol Hill right now. I think there's an election year coming up and a lot of discussion there in what's happening that. And I'm not aware that this has moved any further. Any other changes, Glenn, that people need to be aware of? Well, I'd say I want to go back to a Medicare topic, if I may, just briefly, because I know we're getting close to the end of the program here. For anyone already on Medicare, I want to emphasize some major changes happening on the Medicare side of things that already have happened. This legislation's already passed, signed into law by the president, and already started to take effect. And that's an out-of-pocket limit on prescription drug plans in Medicare. Prior to 2024, there was no limit on our exposure to medication costs, on how much we could owe in one year. Larry knows I had a client paying over $9,000 per year in medication costs on Medicare. And that's him paying his normal co-pays and responsibilities on that insurance policy. And his plan had no limit. Well, now legislation has passed, there is, starting in 2025, going to be a hard limit on the out-of-pocket on prescription drug plans in Medicare. And I want people to know that our already on Medicare pay very close attention to notices you're going to get at the end of the year about what's going to be changing about your plan for next year. As insurance companies, they're going to be required to pick up 60% of this cost. And we don't expect them to do that without pushing some of that cost back onto us. And either a reduction in benefits on some plans or an increase in premiums on others. Right. In fact, you just took the words out of my mouth. I'm wondering, you know, will this mean that more and more drugs will be turned away? They'll say, no, we won't cover that. I mean, definitely we're already seeing that with certain medications connected to diabetes. I think anyone that's watching the news is related to shortages on certain medications and insurance companies opting not to cover certain prescription drugs. Now, Medicare does have a requirement that for every therapeutic category that exists, they have to cover at least two prescription drugs that treat that condition. But obviously, some of the most costly are they're going to be the ones they try to eliminate first. Sure. This has been incredibly informative, both of you. I've really enjoyed this. I think, again, you know, Larry, you said this right off the top, but you know, it's a dry subject for some. It's a subject that maybe we don't really want to deal with a think about, but boy, is it important? I want to invite everyone to give Haven Financial Group a call. Again, this is not just about your health coverage or your long-term coverage. This is about putting together a retirement plan that includes these very important issues to make sure that you're comfortable in those golden years. It's 612-504-8400, that's 612-504-8400. You can go to HavenFinancialGroup.com. Take a look at some of those upcoming educational seminars. They are free, but you do need to sign up because, as Larry has said, people are very interested in getting into those, and they need a headcount to get an idea of how many people may be there. Glenn, it's been a delight to meet you on the radio, and I'm so glad that you could be a part of the show today. Thank you. It's a delight for me as well. Thank you. Larry, yeah. I was just going to say, Larry, good job bringing Glenn on. I enjoyed it. Well, Glenn is a valued asset like many of our staff in this area because he is so knowledgeable, and I have heard Glenn talk for years, Medicare, health care, and these topics still give me a headache, and that's why I'm so glad that he can talk about them, and he can talk about it in detail, and that's available to the listeners. If you're not getting that attention in these areas or in the wealth management or investments or estate planning or taxes, you should be getting the attention you deserve. These things change, and none of what we talked about on today's show was scare tactics. It was based on statistics, and those that have endured know exactly what we're talking about. So, again, Kim, great to be with you. Glenn, thanks for being on the show. Listeners, thank you for listening. Give us a call at 612-504-8400 or havenfinancialgroup.com. Look forward to next week, Kim. Thanks so much. Investment Advisory Service is offered through Guardian Wealth Strategies, LLC. Investment Financial Group and Guardian Wealth Strategies, LLC, are not affiliated companies. Investments involve risk, and unless otherwise stated, are not guaranteed. Please consult with the qualified financial advisor and/or tax professional before implementing any strategy discussed herein. And comments regarding safe and secure investments and guaranteed income streams only refer to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims painability of the