Most Read IRIS Articles of the Week (February 6-10)
Here’s a look at the Top 11 Most Viewed Articles of the Week on IRIS.xyz, February 6-10, 2017
Click the headline to read the full article.
People always ask me how they can stand out from the crowd. Here are 10 critical steps to take ... — Roy Osing
If you’re anything like me, you cherish ‘aha’ moments, especially when that ‘aha’ is the realization that something you’ve been using for just one purpose can do so much more. — Salvatore Bruno
The big headline on Friday was Donald Trump has signed an Executive Order to review the Dodd-Frank regulations. He also changed rules relating to brokers, so that they can seek maximised profits rather than being forced to behave in the client’s best interests, as ordered under the Obama Administration. — Chris Skinner
It seems the more educated we are, the more we try to rely on rational argument and extrinsic motivation to convince people to change their attitudes and actions about such things as diversity, generational differences, client service and client acquisition, succession planning, and flexibility – just to name a few emotionally-charged issues in the workplace. — Phyllis Weiss Haserot
A continuation of the rally in equities globally and growing confidence in the forward-earnings power of more economically sensitive value stocks will likely depend on continued improvement in global economic growth and, consequently, improving prospects for profit margins and earnings. — Cindy L. Sweeting
A market without volatility would be unnatural, like an ocean without waves. The free market, like the open ocean, is constantly churning. For some investors, market-moving waves can be exciting, providing a buying opportunity for mispriced securities. For other investors, the waves might feel violent; but truthfully, for long-term investors, market volatility should be irrelevant. — Samantha Azzarello and Ainsley Woolridge
Entrepreneurs, business owners, and leaders all understand how life and business can surprise us. You have plans, and they work fine, until you get sucker punched by new competition, market upheavals, or high employee turnover. — LaRae Quy
The border tax will ban U.S. companies from deducting the cost of imports that go into products that they sell domestically. At the same time, businesses will be able to deduct revenue from exports while calculating their taxes. Since the U.S. imports more than it exports, the provision would raise revenue. — Dr. Sonu Varghese
We’ve all experienced it; we need to focus on an important, time sensitive task when suddenly we feel as if we had been tossed into a tornado. Fires needing our immediate attention start right and left. So, how can you keep your focus when all hell is breaking loose? — Elizabeth Stincelli
Harvard University’s endowment fund just decided to outsource most of its investment functions because it could no longer justify the 'organizational complexity and resources necessary'. If Harvard, along with many other major university endowments, has outsourced at least some of its investment needs despite the wealth of on-staff investment talent, shouldn’t you at least be considering it? — Palladiem
Your Challenge: How can you improve the meeting experience with your ideal clients? Unless you understand what they truly value from you, how will you ever know how to improve? — Grant Hicks
Are Your Clients Failing to Plan for the Costs of Long-Term Care?
Written by: Matthew Paine
It’s been a tough few years in my family. My mother has been battling cancer for what feels like forever, and while she’s been managing her health with diet and exercise for some time, a few months ago everything changed. Her cancer had become aggressive, and chemo, which she had dreaded, was suddenly the only real option. My mother is in her late 70s, so the already brutal side effects of chemo resulted in a prolonged hospital stay that is currently at four weeks and counting. The good news is that she’s mentally strong, and she’s battling like a lion.
My dad is another story. Suffering from early-onset dementia, his ability to understand what’s happening and why my mother isn’t at home shifts from day to day. Because he’s unable to drive or care for himself (at least predictably), my siblings and I have been juggling taking care of him ourselves. It’s not an easy task, especially with jobs, children, and lives of our own to manage as well.
Like many families, none of us—my mother, my father, my siblings or myself—saw our current dilemma coming our way. Clearly we should have. My mother hasn’t been in top health for years. My dad’s condition is sure to get worse. And even if both of them were in perfect health, their age alone should have driven us to communicate better, earlier, and smarter. Despite being in the financial services industry myself, I haven’t been involved in my parents’ finances. I know they saved well for retirement, but I don’t know where they stand financially today. I don’t know what or how much insurance coverage they have. I have no idea how they plan to pay for their long-term care—or if there even is a plan.
The situation is forcing our family to get personal—and fast. Despite being careful about nearly every other aspect of our family’s financial lives, this one slipped through the cracks. We failed to plan.
Just like cancer and dementia, this failure to plan is an epidemic. And it’s only getting worse. To help your clients battle this epidemic, it’s vital that planning for long-term care become an intrinsic part of your retirement planning process. Here’s why:
Retirement planning alone isn’t sufficient.
We’ve all seen it. A client has a great retirement plan in place, and suddenly life throws an unexpected curveball. The later in life your clients get, the more likely that curveball will be the need for long-term care. According to the National Center on Caregiving, the number of people needing long-term care will hit a shocking 27 million by 2050. And according to the AARP, one in four people age 45 and over are not prepared financially if they suddenly required long-term care for an indefinite period of time. That statistic alone tells us that our efforts at planning are failing.
Long-term care costs are escalating rapidly.
According to a 2016 survey from Genworth Financial, a private nursing home room costs just over $92,000—about $7,698 a month—which is 19% more than it cost for the same care in 2011. According to the AARP Public Policy Institute, lost income and benefits over a caregiver's lifetime is estimated to range from a total of $283,716 for men to $324,044 for women, or an average of $303,880—and less than 10% of that care is expected to be covered by private insurance.
Medicaid isn’t the answer.
Many people assume that public programs are the answer to long-term care, but in the case of Medicaid, a program designed to assist the poor, it is a last resort. First, while nearly everyone over age 65 has Medicare coverage, that program doesn’t cover long-term stays. That means that many people who need that coverage are forced to spend down their assets until they qualify for Medicaid. How poor must a patient be to receive benefits? In order to be eligible for Medicaid benefits, a nursing home resident may have no more than $2,000 in "countable" assets, and the patient’s spouse—called the "community spouse"—is limited to one half of the couple's joint assets up to $119,220 (in 2016) in "countable" assets. The result: even a couple who has spent a lifetime saving for a comfortable retirement can be forced to draw down nearly all of their assets before qualifying for Medicaid.
Once on Medicaid, long-term care patients lose the one thing many seniors care about most: choice. As a recipient of public assistance, patients rarely have a say in where they receive care. Whether that means being placed far from family, in a less-than-desirable facility, or even in a facility that lacks certain types of care (such as a dementia unit or other specialized care), the patient is at the whim of the state.
The good news is that even for those who feel there’s no light at the end of the tunnel, there are options that can help seniors who are struggling to pay for their post-retirement care to not only cover those rising expenses, but to do so in a way that gives them the freedom of choice. A Veteran myself, I know that VA Benefits are highly underutilized—including long-term care benefits. You can learn more about these benefits here. As well, the National Association of Insurance Commissioners (NAIC)’s July report Private Market Options for Financing Long-Term Care Services offers a variety of options for helping finance long-term care needs. Included in that list is the use of life insurance policies to help to fund long-term care expenses—an approach that is supported by GWG Life’s LifeCare Xchange Program.
In my own situation, I know there’s a high likelihood that my dad will eventually require skilled nursing care. I hope that as my siblings and I begin to dig into the details of my parents’ estate, we’ll find that they have indeed planned for long-term care. If that’s not the case, I’m comforted to know there are options available to help ensure Dad is not only in a facility that can meet his specialized needs, but that his new home is where our family chooses for him to be. Life may throw its curveballs, but at least Dad’s care will count as a home run.
Matthew Paine is Senior Vice President at GWG Holdings. Mr. Paine started his financial services career with AXA Advisors, developing marketing strategies for the North Central Region and building his personal practice. Since 2008, he has lead sales teams in raising capital in various assets classes ranging from the Life Insurance Secondary Market, Multi-Family Real Estate, Conservation Easements, and MBS Hedge Funds/Fund of Funds. Mr. Paine has a BA in Marketing/Management from the University of St. Thomas in St. Paul, MN and holds FINRA Series 7, 24 and Series 63 licenses through Emerson Equity, LLC. Member FINRA/SIPC.
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