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Seminar   pm - retirement challenges withaudio 41-53

Seminar pm - retirement challenges withaudio 41-53



Section 5 Five Challenges for Retirees

Section 5 Five Challenges for Retirees



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  • According to the U.S. Department of Health & Human Services [1] 60% of Americans who reach age 65 will need some form of Long Term Care. Hopefully you are one of the 40% of Americans who reach 65 who will not need Long Term Care during your life time; but we certainly consider the statistical odds when planning our clients retirement. [1] http://www.tdi.state.tx.us/consumer/hicap/hicapltc05.html (June 2006) http://www.cms.hhs.gov/ (June 2006)
  • Let’s take a look at the current cost of long term care. Read slide As you can see the cost of Long Term Care is not cheap. http://seniorjournal.com/NEWS/Eldercare/2008/8-04-30-Long-TermcareCosts.htm
  • When I’m talking with my clients about the need for Long Term Care coverage there are basically just 2 reasons to have coverage. The first reason is to protect their spouse from the cost and the second reason is to protect their estate from the cost.
  • There are a couple of ways to cover the cost of long term care. First of all, you don’t have to buy Long Term Care insurance. If you have a boat load of money and more monthly income than you can spend you might be able to be self insured. The question is how long could you afford to pay $6,000/month and what would that do to your estate? If Long Term Care insurance makes sense for a client, there a 2 ways to buy it. The traditional way is to pay monthly or annually for the insurance. The cost of this insurance will vary based on the benefit you are seeking and your age. If you need Long Term Care, the policy will begin to pay the long term care benefit. If you never need long term care what do you suppose happens to all the money you paid for the insurance all those years? The insurance company keeps it. The other way to purchase long term care insurance and the only way to be certain that someone will benefit from it is asset based long term care. Insurance has changed a lot over the years and now we have life insurance policies that have long term care included. If you need long term care the policy will pay the benefit and if you never need it your beneficiary will collect the tax free death benefit. The other feature of the asset based long term care policy is that if you ever change your mind and don’t want the coverage anymore you can cancel the policy and get back all the money you originally put in. http://seniorjournal.com/NEWS/Eldercare/2008/8-04-30-Long-TermcareCosts.htm
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  • Now since we’re n the topic of insurance, how many of you own life insurance policies? Life insurance policies are often one of the neglected things we own. They need to be checked on from time to time. One of the ways to check on a policy is by getting an in force illustration from the issuing company. This illustration will show you how your policy is performing and how long it will last. We expect them to last for the rest of your life. Sometimes they can expire worthless while your’e still alive, other times we find that the policy is very good and other times you may be able to improve on the policy that you have. These illustrations really help to diagnose any problems and it’s very easy for us because we do it all the time for our clients.
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  • A 1035 exchange is when we move money from an existing annuity or life insurance policy to another annuity or life insurance policy on a tax deferred basis. You have to be careful when considering a 1035 exchange, there may be penalties on moving an existing annuity and you are locking up the money for another term specific to the new annuity. On the life insurance side there are several factors to consider. The cash value vs the surrender value as well as the cost of the new policy and new surrender period.
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  • We evaluate policies for our clients all the time and don’t charge for that service.

Seminar   pm - retirement challenges withaudio 41-53 Seminar pm - retirement challenges withaudio 41-53 Presentation Transcript