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Incontinence: new hope with sacral nerve stimulation

Friday, February 17th, 2012

New Hope for People with Urinary and Bowel Incontinence

By Roxanne Jones, Freelance writer specializing in health and medicine

If you think that incontinence is a normal part of aging and something you just have to live with, think again. Even if conservative treatment measures like medication and behavior modification haven’t worked, there’s an innovative option called sacral nerve stimulation (SNS) therapy that could be just what the doctor ordered.

SNS therapy has been available since 1999 when the FDA approved it for treating the symptoms of overactive bladder including urinary urgency (when you just can’t hold it), urinary frequency (the need to urinate at least 8 times a day), and urge incontinence (leakage when you get the urge to go). It’s also used to treat a condition called non-obstructive urinary retention, in which you can’t completely empty your bladder. And just last year, the FDA approved it for treating bowel (fecal) incontinence.

SNS involves implanting a neurotransmitter device under the skin in the upper buttock area. The device transmits mild electrical impulses through a lead wire close to the sacral nerve, a nerve in the lower back that influences the bladder, bladder and anal sphincters, pelvic floor muscles and colon. These impulses help provide better bladder and/or bowel control.

A real plus of this treatment is that it’s done in two steps. The first is a test to see if the therapy will work for you. If it’s successful, the device is then implanted and the electrode is tunneled under the skin and attached to the battery. Both procedures are minimally invasive, same-day surgery done under light sedation and local anesthesia, and the treatment is covered by Medicare.

While not a complete cure, SNS therapy has been shown to greatly reduce or eliminate bladder and bowel control problems in the majority of patients – and greatly improve their quality of life.

Bottom line: don’t assume that incontinence is an inevitable part of getting older, and don’t be embarrassed about discussing it with your doctor. Effective treatment options do exist. And you deserve the freedom and confidence to lead as active a life as possible.

NOTE: SNS therapy is provided by specialists: a urogynecologist (for women with urinary incontinence), urologist (for men with urinary incontinence), or colon and rectal surgeon (for people with bowel incontinence).

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Turning Your Savings into Real Protection for Long Term Care

Monday, August 15th, 2011

by Kerry Peabody, Long Term Care Insurance specialist

You’re a saver. You’ve saved diligently (something more people should do) and now you’ve got some money tucked away “just in case.” It’s your rainy day fund. It’s money that you don’t plan to use for anything, and if you can pull it off, it would be nice to leave it to your grandchildren. But, you don’t have any protection against long term care. So, no matter how much you’ve saved, there is still a risk you might need to spend it all for long term care. What if you could keep control of that money, but still use it to protect yourself? “Asset-based” long term care plans will do just that.

Let’s say you’re 65 year old woman, and you have $100,000 in CDs, money market accounts, savings, etc. If you needed long term care, this is the first money you’d need to spend to pay for services. But, with nursing homes costing about $100,000 per year, that may not be enough. Using one of these plans, here’s what you can do.

You could move $75,000 of that money into an asset-based long term care plan. Then, the insurance company would agree to pay up to $158,000 in benefits if you needed long term care services, or if you passed away! So, you’ve  kept $25,000 in savings for emergencies, and you’ve turned your $75,000 into $158,000 – more than double your money. If you were to use $50,000 for long term care, and then pass away, the remaining $108,000 is still paid out as a death benefit. If the money is paid out to you as long term care benefits, there’s no tax. If the money is paid to your granddaughter, as a death benefit when you pass away, there’s no tax. No matter which one happens, you’re guaranteed to get more than double your money out of this insurance policy. But, that’s not the best part.

Something happens a few years down the road and you change your mind. Perhaps they find a definitive cure for Alzheimer’s disease, or a family member desperately needs cash, and you want to help. At any time, for any reason, you can go to the insurance company and get your $75,000 back. This product has  a built-in “return of premium” feature. So, you’re not giving up control of your money; you can still get to it if you need to. Of course, if you take the money back, your long term care protection goes away, so hopefully you won’t have to do that.

There are several of these products available today, so if traditional long term care insurance doesn’t appeal to you, perhaps this will. Let’s face it, you need to have some sort of plan for care, and that boils down to having the money to pay for it. If you’re writing the checks, you’re calling the shots.

Have a great week! Next time, we’ll talk about what long term care insurance plans can pay for.

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Senior Money: Deferred Annuities Part III, fixed annuities

Friday, July 15th, 2011

Kerry Peabody, Long Term Care Insurance Specialist at Clark Insurance

We’re talking about “deferred annuities” this week, in a three part series. Here’s Part III: Fixed, Deferred Annuities. You can also read Part II: Immediate Annuities, or Part I: Indexed Annuities.

We’ve talked about “immediate annuities,” or “income annuities.” These are used to create a lifetime stream of income. But what if you’re not ready for that? What if, instead, you have some money that you’d like to see grow, but you don’t want to leave it in the stock market. You could keep it in a CD, but CD rates are abysmally low right now, and what you do earn in a CD is taxable. A safe alternative to a CD is a fixed, deferred annuity.

This is a growth and savings tool. You agree to let the insurance company hold your money for a certain time period, usually 3-10 years. In return, they guarantee you a specific return on your money. And, while the money is in the annuity, it grows tax-deferred. This means that, not only will you get, in most cases, a better rate of return, but you’re not going to be taxed on it until you take the money out at some point in the future. So, your money grows faster due to the higher guaranteed returns and the tax deferral inside the contract.

Here’s an example. Jane is 72. She’ has $100,000 in CDs that she’s not using for income, and she’s making 2% in the CD she’s in. She can move that $100,000 to a fixed, deferred annuity with a 6 year annuity period, and get a guaranteed return of 3.15% (using interest rates offered today.) That’s a significant difference, one that will add up over time. After 6 years, the annuity is going to be worth roughly $11,000 more than the CD! At that point, she can keep her money in the annuity and let it continue to grow, she could convert it to income, using an immediate annuity, or she could move it to a new annuity. Or, she could simply take the money and run!

You may have heard horror stories about people being charged to take money out of their annuity. This is because of something called a “surrender charge.” Remember, the company promises to pay you a certain interest rate on your money. In return, you agreed to leave the money with them for the annuity period. If you break that agreement, then you pay a hefty penalty. This is all laid out in the contract. A typical surrender charge is calculated as a percentage of the annuity value, and it decreases over time. For instance, the 6 year annuity I’ve used in this example has a surrender schedule of:

Year 1, 8.5%; Year 2, 7.5%, Year 3, 7%; Year 4, 6%, Year 5, 5%, Year 6, 4.5%, and 0% thereafter.

So, if you take your money out earlier than you agreed to, you pay a penalty. So, you wouldn’t put money into a deferred annuity unless you were sure that you wouldn’t need it. But, also keep in mind, that most good annuities will let you take a portion of your money out –sometimes as much as 10% per year – with no penalty. Many will waive the surrender charges if you’re terminally ill and need your cash, or if you’re confined to a nursing home. Again, this is all laid out in the contract, so do your homework.

Just like any insurance product, you should only buy annuities from a financially stable carrier with a good reputation. Do your homework, and make sure your agent is comparing several companies for you. Not all annuities are created equally, and you don’t want to base your purchase just on the guaranteed rate of return. Look for the surrender schedules, waivers, etc. And don’t hesitate to call me if I can answer questions.

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Senior Money: Deferred Annuities Part II, Immediate Annuities

Wednesday, July 13th, 2011

Kerry Peabody, Long Term Care Insurance Specialist at Clark Insurance

We’re talking about “deferred annuities” this week, in a three part series. Here’s Part II: Immediate Annuities.

We’ve talked about “deferred annuities,” which are tax-advantaged savings & growth tools. Now let’s take a look at the other way annuities can be used – to create a guaranteed lifetime income. A pension is simply an annuity. If you don’t happen to have a pension from an employer (and we know that far fewer of us have these than used to) you can actually “buy” one, using an immediate (income) annuity.

An immediate annuity takes a lump sum and converts it to a guaranteed stream of income. The amount of income created is based upon the amount of the lump sum and the age of the annuitants, and how long you want the annuity to pay.

For instance, let’s say that Ted is 70. He’s collecting social security of about $1,600 per month, and he takes $1,000 per month of income from his IRAs. Combined, his monthly income is $2,600. He has $150,000 in CDs. He’d like to have a little bit more money to spend every month, but he’s hesitant to start drawing from his savings accounts, because he’s afraid he’ll spend them all down.

Ted decides to purchase an income annuity with $75,000 of his CD money. At age 70, this would result in $535 per month, every month, for the rest of his life, no matter how long he lives. If Ted lives to 110, that check will still be coming, every month, guaranteed. He’s giving himself some extra income, he’s still got $75,000 in savings for emergencies, and he’s guaranteed that this check will never stop coming, no matter what.

The downside to a “life only” annuity is that Ted might step in front of a bus before the entire $75,000 is paid back to him. If that’s a concern for Ted, we can fix that by adding a “period certain” to the annuity. For instance, we could say that we want Ted’s annuity to pay for the rest of his life, no matter how long he lives, or for at least 15 years. In that scenario, Ted’s monthly check would be $464 per month. If he passes away before the 15 year period certain ends, the check would go to his beneficiary every month. So, he’s guaranteed to get at least $83,520 out of the annuity – no matter what.

Also, when the money’s being paid from the annuity, only a portion of it will be taxable. For instance, in the Life Only version above, a portion of the monthly check is Ted’s money, and a portion is the growth within the annuity. In this scenario, only $145 of the $535 per month is considered taxable income.

So, once again, annuities offer guarantees, tax-advantages, and the flexibility to make your money do what you need it to do. If you have money that’s sitting idle in savings, CDs, or money market accounts, or in retirement accounts that you don’t want to leave at risk of market losses, then you can use annuities to create guaranteed savings and income for life. By combining the benefits of both deferred and immediate annuities, you can build a guaranteed, bulletproof income stream that you and your spouse cannot outlive.

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Senior Money: Part 1 Indexed Annuities

Monday, July 11th, 2011

Kerry Peabody, Long Term Care Insurance Specialist at Clark Insurance

Let’s talk a little bit more about “deferred annuities” this week, in a three part series. Here’s Part I: Indexed Annuities.

A deferred annuity is a tax-advantaged savings & growth tool. As we said before, you agree to leave a portion of your money with an insurance company, for a pre-determined period of time. In return, the company promises to pay you a minimum return. While the money grows inside the annuity, you’re not taxed on any of that growth each year, as you would be in a CD. Over time, this means that you benefit from faster growth.

Deferred annuities typically pay a higher return than CDs will. While the difference may not be huge, when you add in that your money grows tax-deferred, it can make a significant difference over time.

Usually, the longer the annuity period – the amount of time you agree to leave your money with the company – the higher your guaranteed return will be. For instance, today, 5 year annuities will guarantee anywhere from 2.15% to 3.25%, depending on the company you choose and the amount you deposit. A 10 year annuity would pay anywhere from 3.05% to 4.25% per year.

There are also annuities that give you the opportunity to make even more, by “indexing” your returns to the stock market. These are called fixed, indexed annuities. It’s important to understand that your money is not in the stock market, and it’s not subject to market risk. The carrier is taking the market risk with an indexed annuity, not you.

Here’s how a fixed, indexed annuity works: You put your money with the insurance company, but instead of a guaranteed, flat rate, you choose an “index,” such as the S&P 500. If the S&P 500 goes up, your money goes up. If the S&P 500 goes down, you’re guaranteed not to lose any of your money. So, you go up when the market goes up, but you don’t go down when the market goes down! This is the best of both worlds. “But,” you say, “this sounds too good to be true. How does the insurance company do this?” It’s actually quite simple.

An indexed annuity also has a “cap.” The cap is the maximum you can earn if the market goes up. For instance, today, you could purchase a 7 year indexed annuity with a 6.5% cap. If your index goes up this year, you’d go with it all the way to 6.5%. If it goes up more than that, you still get “just” 6.5% return. The carrier keeps anything above that. If it goes up less than 6.5% – let’s say it goes up by 4% – you’d get the full 4%. If it goes down, you don’t lose anything.

So, by “indexing” the returns, you now have the potential to make more, but you’re still protected against the dips in the market. Not a bad deal.

Most indexed annuities also offer you a fixed option, and you can usually change your allocations every year. For instance, if you feel that the upcoming year is going to be a bad year for the market, you could change to the fixed, guaranteed option, and know that you’d make a minimum return. If the next year looks better, you could switch to the index option, to take advantage of the market’s ups, without any risk of downs.

As always, you should only put money into a deferred annuity if you’re fairly confident you can leave it alone for the entire annuity period. You will be penalized if you pull it all out early, because you agreed to leave it there. Keep in mind, though, that many annuities will let you pull some money out early – often as much as 10% per year – without penalties, as part of the contract.

Next time, we’ll look a bit more closely at “immediate annuities,” and ways to use both deferred and immediate annuities to strengthen your retirement security.

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Maine Money Planning: My Family Will Take Care of Me

Monday, June 27th, 2011

“My family will take care of me.” How often have we heard that during the long term care discussion? This is a common sentiment, and it’s nice and warm and fuzzy, but in most cases is just not realistic.

First, let’s accept one very basic fact. Your family – your children, your spouse, your siblings -  will be involved when you need long term care. What do you want that involvement to be? Do you want them to be forced to actually physically provide you with care, or do you want them to be able to pick up the phone and call the professionals? For most of us, the latter is the best option.

There are several reasons why “My family will take care of me” isn’t realistic. The first is simply that they have lives of their own. Is your daughter sitting at home today, waiting by the phone for you to call and ask for help? Not likely. Our children have careers. They have children of their own. They have mortgages, car payments, and other financial responsibilities to meet. They have social lives, they have school plays, and college expenses. How realistic is it for one of your children to put all of that aside to provide care for you?

Second, if you’re 85 or 90, your “kids” aren’t kids any more. There’s a pretty good chance that your “kids” are in their 50s or 60s, or even their 70s! How physically capable are they of doing the hard work of providing care? How is their health? I heard a story yesterday about an 87 year old woman who is taking care of her 63 year old, recently-disabled daughter. How well do you think that’s going to work out for either of them over time?

When you’re 85, your spouse is probably pretty close to that. Do you really think that playing the role of caregiver is going to be good for her? Or for him? Caregiving is emotionally and physically exhausting, and it takes a terrible toll on your family. One of the hard, cold facts about family caregivers is that spousal caregivers have a higher death rate than non-caregivers of the same age. And the older the family caregiver, the more severe the impact is. Is this what you want?

Finally, what do you want your family’s memories to be? Do you want your son or daughter to spend their last several months or years with you in the role of caregiver? As distasteful as it may be, can you picture your daughter bathing you? Keeping you clean? Close your eyes for a few moments and try to envision what that would be like. Yes, there are wonderful, heart-warming stories about family caregivers, but I’d suggest those stories would be even more touching if the physical act of providing care had been delegated to a paid professional, not done by the family member. The “care” is the hard part, being together is the part we want our loved ones to remember.

Your family will take care of you. The decision you need to make today is what you want their job to be. So, what’s your plan?

Kerry Peabody, Long Term Care Insurance Specialist

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Caring is at the Heart of Assisted Living

Wednesday, June 1st, 2011

By Neal R. Davis, Senior Executive Director, Bay Square at Yarmouth, Benchmark Assisted Living

Caring in assisted living communities takes many forms and is provided by many people. The need for care and the need to be cared about are two of the main reasons elders choose assisted living as a lifestyle. People who need help with one or more of activities of daily living (ADL), or are looking for opportunities to socialize in a comfortable setting, find an assisted living community is one of the best solutions for meeting these needs.

How is this care and caring delivered to those who call an assisted living community home? For answers, just look at this list of caring providers:

  • Volunteers who give their time through visiting, sharing a laugh, or just by reminiscing about the life one has lived.
  • Resident Care Assistants who interact with residents, eliciting smiles, sighs of contentment, laughs, or a thank you.
  • The Resident Care Director who responds to concerned residents with reassurances about their health, makes compassionate assessments of the situation, calls a doctor and creates an updated care plan.
  • The Activities Director who makes sure everyone who wants to be included in available programs and shows concern about residents’ social needs, their comfort, and their happiness in all interactions.
  • The Food Service Director who puts together special meals for residents and their families celebrating holidays, prepares a surprise cookout marking the first day of spring, or cooks up something unique for a family birthday gathering.
  • The Business Office Manager who is open to hearing concerns about a bill, offers help and reassurance that things can be worked out.
  • The Dining Room Manager who understands about the importance of compatible dining room seating, greets residents by name and has a smile for everyone at the beginning of each meal.
  • The Maintenance Director who quickly responds to a repair request with a grin and a joke.
  • The Housekeeper whose attention to detail with the vacuum cleaner and delivery of the newspaper in the morning is accompanied by a comment about the weather.
  • Fellow Residents who inquire about health, family, and the newest grandchild.
  • The Hairdresser who squeezes in a resident without an appointment, so she can look her best for an unexpected visit from an old friend, reassuring that “it’s not a problem!”
  • The Director of Community Relations who follows up on the smoothness of the move-in and answers residents’ questions concerning comfort and services.
  • The Executive Director who actively listens to concerns of families and residents, guiding, informing, and supporting all who want and need to be heard.

At the end of the day, when all is said and done, it’s the people, both residents and staff, who make an assisted living community a home, a place of caring and comfort.

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Maine Money Planning: Outliving Your Money

Sunday, April 24th, 2011

Kerry Peabody, Long Term Care Insurance Specialist, Clark Insurance

Let’s take a break from long term care, and talk about an issue that my clients are becoming more concerned with. There’s another risk that comes with a long life, and that’s outliving your money. Most of us retire with some money tucked away in savings. For some of us, it’s a little. For others, it’s a lot. For most, it’s somewhere in the middle. The concern for those of us in the middle is “What if my money runs out before I do?”

Well, there are some very good financial tools that you can use to solve that problem – annuities. Annuities are perhaps the most misunderstood and maligned financial services product on the market, but as with any tool, when they’re used properly, and for the right reason, they’re an excellent choice. Imagine this – what if, when the market crashed in 2008, your money had continued to grow? Wouldn’t that have been a nice feeling? That’s what annuities can do.

There are two primary kinds of annuities – deferred annuities, and immediate annuities. The two products are designed to do very different things.

Deferred annuities are savings tools. You agree to leave your money with an insurance company for a certain period – usually from 3-7 years – and in return, the insurance company agrees to pay you a fixed return. For instance, you might purchase a 6 year annuity, and the company promises to pay you 3.4% on that money, every year, guaranteed. It doesn’t matter what the stock market does; there’s no tie to your money and the market. Unlike a CD or a money market account, your money will grow tax-free while it’s in the annuity. So, you make more because you’re not taxed until you take the money out.

In return, you’ve promised to leave the money with the company for 6 years. If you take it out early, you pay a penalty. This is known as a surrender charge. Many good annuities will actually let you take a portion of your money out each year without a surrender charge, but you need to make sure you know how your annuity works before you buy it.

So, a deferred annuity is a tax-advantaged savings tool that guarantees you a specific return on your money, and defers taxes while the money grows. That’s not all the complicated, is it?

The second type is an immediate annuity. These are sometimes called “income annuities,” because that’s what they do – they create a stream of income that’s guaranteed not to run out. In effect, an immediate annuity lets you buy your own pension.

Let’s say you’re a 70 year old man, and you’ve got some money in CDs. You’d like to boost your monthly income a bit, but you don’t want to start drawing money from the CD, because you’re afraid it will run out. What if, instead, you put $75,000 into a life annuity? You’d be guaranteed a check for roughly $535, every month, for the rest of your life – no matter how long you lived. (This uses current rates with an A rated carrier.) If you lived to the ripe old age of 130, the money would still be coming, every month.

Conversely, if you passed away next week, the money’s gone. That’s the downside to an immediate annuity, but that’s how carriers can pay the other guy until 130! But, if you’re worried about this happening, there’s a way to fix it.

You could choose a life annuity with a period certain. This means the annuity would pay for the rest of your life, no matter how long you lived, or for at least “X” number of years. For instance, that 70 year old could purchase “life with a 10 year period certain.” He’d begin getting a check for $500 ever month for as long as he lived. BUT… if he died the week after buying the annuity, the payments would continue for the full 10 year period certain. They would simply pay to his beneficiary.

So, annuities are an excellent tool, and the type of annuity you choose depends on what you’re trying to accomplish. As with any insurance product, there are some ground rules.

1)    NEVER buy anything you don’t understand.

2)    NEVER buy from a carrier that’s not rated “A” or better with the major ratings agencies – Standard & Poors, Moody’s, and A.M. Best. The products are guaranteed by the insurance company, so you need to work with solid, credible carriers.

3)    NEVER let yourself be pressured into buying anything you’re not ready to buy.

And finally, be sure to work with an insurance professional who represents several companies. As with any product, the best answer isn’t always a single company. An independent agent will be able to help you “shop around,” and find the best plan. 

Next time, we’ll talk a bit further about annuity options, and how they can help you secure your retirement income.  Thanks!

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Long Term Care: Paying for LTC Insurance

Friday, April 15th, 2011

Kerry Peabody, LTC Insurance Specialist

So, we’ve talked about how expensive long term care can be. It’s not cheap. How do people pay for it? Basically, there are three ways to do this: Your money, government money, or an insurance company’s money.

The first and most common approach is using your own money, or “self-insuring.” If you consciously choose to “self-insure,” or if you simply don’t do anything and just wait and see what happens, you’re accepting the risk that your money will be enough. This is a perfectly acceptable strategy, assuming, of course, that you understand what you’re signing on for. As we’ve seen, long term care can be hugely expensive, and if your financial resources aren’t significant, you’re risking your ability to survive, financially.

Remember Dr. Spock? He sold 50 million books in his lifetime, but at the end of his life, his family was discussing whether or not to put him in a nursing home, because his home care was too expensive. His publisher actually offered to help pay the bills. Dr. Spock was pummeled by long term care costs. Do you have several hundred thousand dollars to set aside just as your long term care fund? If not, self-insuring may not be the best option.

The next option is government money, in the form of Medicare & Medicaid. I could write for pages and pages about each of these programs, and still not cover them adequately. Let me summarize each of them briefly:

Medicare – this is health insurance. As you’ve worked over the past decades, you’ve been paying into the Medicare insurance program to cover some of this. There are two main parts to Medicare – Part A & Part B.

Part A is your hospital insurance, and you’ve already paid for it. It covers hospital stays, etc. Medicare Part A will pay for a very limited amount of care in a Skilled Nursing Facility (SNF), but only under very strict conditions. These are:

1)    You must have a qualifying, 3-night hospital stay.

2)    You must be transferred to the skilled nursing facility within 30 days of this hospital stay for the same condition.

3)    You must need skilled care – rehab care, in most cases.

If you meet all of these triggers, Medicare will pay all costs in a skilled nursing facility for the first 20 days. From day 21-100, you would be responsible for the skilled nursing facility deductible, which is roughly $140 per day. After 100 days, Medicare pays nothing. But, here’s the tricky part – if you stop needing skilled care, Medicare stops paying. On average, Medicare-eligible skilled nursing facility stays last just 26-28 days. Unfortunately, this is often when the family member gets the phone call that goes “Oh, by the way, Alice, Medicare stops paying today. Will you be taking your mom home, or will someone else be paying us?”

Medicare Part B is your out-patient health insurance coverage, and doesn’t offer any long term care coverage.

So now, Medicaid. Medicaid (MaineCare here in Maine) is a welfare program. It’s an excellent program, assuming that you don’t have any real assets. If you do have assets, you’re going to need to spend them down to meet the financial eligibility guidelines – roughly $10,000 for a single, or $110,000 for a couple. And in most cases, once you’ve managed to impoverish yourself, your only real care option is a nursing home. So, what have you really accomplished?

The final option is sharing the risk with an insurance company. An affordable, well-designed insurance “safety net” can make all the difference in the world. By finding an insurance plan that will supplement your money, you can stay in control far longer.  Don’t kid yourself – if you’re writing the checks to pay for your care, then you’re calling the shots. If someone else is paying the bills, they’re in charge.

Because the long term care insurance industry is evolving so rapidly, there are now several ways to share the risk, including insurance policies which will pay you a benefit even if you never need long term care. If you have assets, and a stable income, you need to explore what these options are. Because there’s so much flexibility in these products, plans can be tailored to meet most family’s needs and budgets.

Once again, you need to have a plan. Your plan might be to self-insure. It might be “the kids will take care of me.” (We’ll talk about that next week.) It might be “I’ll sell the camp and that will be my LTC money.” That may work, assuming that the camp sells when you want it to, for how much you need, and assuming your kids don’t want it. For many, insurance offers a good solution.

So, here’s the question: “What’s your plan?

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Your Retirement Safety Net: LTC Insurance

Monday, March 28th, 2011

by Kerry Peabody, CLTC

Congratulations, you’ve made it! Retirement is right around the corner, and you’re ready to breathe a big sigh of relief. You’ve saved wisely and made good investments… but now there’s one more thing to take care of. You have to make sure that your family and your retirement plan are protected against the need for long term care.

You’re going to spend a long time in retirement, and your money needs to be there for you. Imagine if a few years from now, you suddenly need to start writing checks for $5,000, $6,000, even $10,000 a month to pay for long term care services? Where will that money come from? What will it mean to your spouse? Your family? What will it mean to you if you recover? Most of us would be financially devastated by an unexpected long term care need, and the majority of us will use long term care services at some point in our lives. You may know someone this has happened to, perhaps a family member. If so, then you understand that you need to be ready. If not, then talk to friends, neighbors, and co-workers who have experienced it, and see how it affected their families. Ask your family attorney about the risks. You’ll quickly realize that you need a safety net.

The secret to removing the physical, financial, and emotional burden from your loved ones is having the resources to pay for your care. Today, there are good quality home health care agencies springing up all around the area. Assisted living facilities are booming, and adult day care is now available. These are all excellent sources of quality care, but they all depend on your ability to pay.  Medicare covers only very limited long term care, usually less than a month. Medicaid, or MaineCare, will only help after you’ve spent down your own assets, and then you may not be able to choose where you receive care.

Today, just about anyone over the age of 50 is familiar with long term care insurance. These policies cover home care, adult day care, assisted living facilities, and nursing homes. They are flexible and affordable, with discounts for good health, couples, and domestic partners. New claims data from the industry has given us insight into sensible plan designs and coverage options. This coverage offers a good solution for many families, but it can be a difficult decision to make. You need to consider several things before you choose a plan:

  • Have you compared several companies? One company isn’t always the right answer, so be sure that your agent helps you consider plans and prices from a few quality carriers.
  • What kinds of care does the plan cover, and where?
  • How does your Elimination Period, or deductible, work?
  • Does your plan have Inflation Protection? Without it, you may not have adequate benefits when you need them.
  • Is the company you’re considering financially strong?
  • Is the company experienced in long term care, or new to the industry?

These are a few of the things to keep in mind when choosing a plan, but you also must consider your age and health. If you’re fifty or older, then the best time to do this is now. You will not save money by waiting until you’re older to put this in place; in fact, you’ll pay far more over the long run by putting it off. And remember, you will need to be medically underwritten to get a policy. This means that the company will review your health history, so apply while you’re young and healthy. It’s not uncommon for people in their 40s to purchase long term care insurance.

Right now you’re self-insured for long term care. That means that the first place you’ll turn to pay for care is your own money. Can your retirement plan support a cost like this? If not, then explore your options. Talk to your elder law or estate planning attorney and CPA, find a long term care insurance specialist, and explore your options. Don’t walk the retirement tightrope without a safety net.

Kerry Peabody, CSA, CLTC

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