FINANCY Archives - SB Magazine

MONEY MATTERS: Long-Term Healthcare Planning

SB Magazine — Mon, 12 Feb 2024 21:14:03 +0000

Now more than ever, it’s imperative to consider every aspect of financial planning to secure a comfortable retirement as our loved ones enter their golden years — and that includes planning for their long-term healthcare needs.

In fact, this could be the one thing your family hasn’t included in their long-term planning that could have a devastating impact on your family’s financial security despite any carefully employed saving and investment strategies that are already in place. If you keep up with the national news, you are probably aware that the United States population is aging, creating new economic and workforce challenges—and catching many families by surprise if they haven’t adequately prepared for the possibility of future healthcare issues.

It is imperative that people prepare for long-term care and what may become an extreme financial burden, as the cost of assisted living for the elderly can be very expensive—and, in some instances, financially crippling. It is an often overlooked or misunderstood part of the financial planning picture.

Several considerations can help ensure a stable financial future, particularly for those who may need long-term care (LTC). Long-term care insurance helps cover costs for nursing homes, hospice care, adult daycare, and assistance for those in their advanced years who live at home with activities of daily living (ADLs), such as bathing, dressing, and eating.

People often mistake health insurance or disability insurance for long-term care insurance; however, these types of insurance generally do not include long-term care coverage. With that said, some health insurance plans may offer an additional LTC benefit rider, which can be added to a standard policy for additional premium payments.

Unlike traditional health insurance, long-term care insurance is designed to cover long-term services and supports,

including personal and custodial care, in a variety of settings such as your home, an assisted living facility, or a nursing home. These costs can be more than you might think and will most likely continue to increase over time.

Housing arrangements require thoughtful deliberation. Whether aging in place with necessary home modifications, moving to senior living facilities, or considering living with family members, the costs of each option must be scrutinized to make the best choice for your or your loved one’s future needs. For instance, in my experience, round-the-clock care in a nursing home can cost up to and even over $100,000 per year, which is often not covered by health insurance policies or Medicare. Granted, a full-time assisted living facility or nursing home will be the more expensive of the long-term care options, but at-home care and other forms of care can still be expensive.

Here is the most recent information available about long-term care-related costs in Louisiana from the Genworth Cost of Care Survey from 2021. Note that the costs are expected to increase by at least 3% with each year that passes:

Medicaid will cover LTC but is only available to people with very limited finances, which means most people will not qualify for Medicaid coverage, and without proper coverage, the out-of-pocket costs of long-term care can deplete savings and retirement assets rapidly. This could potentially completely deplete your savings, leaving nothing left for your beneficiaries when you are gone. Some people are fortunate enough to have assets available to withstand such high costs for several years, but most Americans simply are not, and will need to rely on long-term care insurance to cover these costs.

To give you an idea for the increased need for LTC, someone turning 65 today has almost a 70% chance of needing some type of long-term care service and support. One-third of today’s 65-year-olds may never need long-term care, but 20% will need it for 5 years or more, and on average women need care longer (~3.7 years) than men (~2.2 years).

Properly preparing as to avoid falling into this stressful situation involves an open dialogue with your family and a qualified financial advisor about overall financial status, which includes savings,

income sources, investments, debts, and other financial obligations. Understanding the full financial picture, including the potential need for elderly care is crucial when assessing one’s long-term financial goals.

There is a wide range of LTC policy options and different price ranges. Much of the pricing depends on your age and health conditions and the amount of coverage desired. I advise consulting a financial professional, and getting multiple quotes from various insurance companies to see what plan will fit your needs and budget best.

Navigating financial planning for your elderly loved ones is a multifaceted and ongoing process. It requires a proactive and open approach,

frequent reassessment, and, often, professional advice. By strategically addressing each aspect of your family’s financial needs, you can significantly contribute to their peace of mind, and yours that this crucial element has been included in your overall financial plan to maximize your family’s quality of life in future retirement.

Denis Poljak is a Managing Director and a Wealth Manager with the Poljak Group Wealth Management at Steward Partners in Shreveport, Louisiana. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Steward Partners or its affiliates. Information contained herein has been obtained from sources considered to be reliable, but we do not guarantee their accuracy or completeness. Steward Partners Investment Solutions, LLC Member SIPC

The post MONEY MATTERS: Long-Term Healthcare Planning appeared first on SB Magazine.

MONEY MATTERS: End-of-Year Financial Planning Review

SB Magazine — Wed, 27 Dec 2023 14:11:03 +0000

The end of the year is upon us once again, and during this time of year, it can be very beneficial to review your financial situation. With the approaching new year and tax season, it is a particularly good time to assess your financial goals, if you are still on the right track, and how you might be able to position yourself for next year better. Here are a few of the more common end-of-year financial considerations.

1.Review or create your financial plan

If you work with a financial planner or advisor, schedule an end-of-year meeting to discuss your progress and adjust strategies if necessary. Look back on the past year’s expenses. Did you stay within budget? Identify areas where you overspent or saved. Also, consider any major life events that may have happened this year, such as births, deaths, marriage, divorce, career change, or retirement.

2.Evaluate Investment Portfolio

Rebalance your portfolio if necessary. Review risk tolerances and asset allocations and make any changes that might be needed. Ensure your asset allocation still aligns with both your short- and long-term goals.

3.Year-end tax review

Review tax loss harvesting opportunities. If any investments you own have lost money on the year, tax loss harvesting can help reduce your overall tax liability. You may also consider charitable giving; the end of the year is a great time to make charitable donations, which may also provide tax benefits. There are several strategies that can be used to assist with minimizing your tax liability, which you should consider reviewing with a financial professional if you have questions.

4.Retirement account planning

If you haven’t already, consider contributing the maximum amount allowed to your retirement accounts, such as a 401(k) or IRA. The 2023 maximum contribution for a 401(k) is $22,500 (plus an additional $7,500 for those 50 or older), and the 2023 maximum contribution for an IRA is $6,500 (plus an additional $1,000 for those 50 or older). If you are unable to max out your contributions, at least try to contribute what you can and continue to increase the amount you contribute each year incrementally. Making small increases each year to your contribution amount will help to grow your retirement account in a manageable way without overdoing it. Don’t forget also to review your asset allocations in your retirement accounts; you’ll want to make sure you have the proper equity to fixed income ratio suitable for your goals; consult your financial advisor if needed. Additionally, make sure all your retirement accounts have up-to-date beneficiaries.

5.Review your insurance policies

Review any existing policies you already have (including health, life, auto, and homeowners’ or renters’ insurance), and make sure the coverage is adequate for your current needs. This may include older policies that are no longer relevant or policies that are not sufficient in providing the needed coverage for your lifestyle; either way, you’ll want to be aware of what you are paying for and what it covers. Also, you will want to make sure your beneficiaries are updated on your policies.

6.Set Financial Goals for the Upcoming Year

What do you hope to achieve financially in the next year? Set clear, measurable goals.

7.Review or create a Will

It is something few like to think about or deal with setting up, but it is a very important measure that should be taken. By creating a Will, you can ensure your assets will be distributed according to your wishes.

By taking a proactive approach to planning for your financial future, you can save yourself a lot of unneeded stress later. Remember, while this checklist serves as a guide, everyone’s financial situation is unique. This is a summary of some of the more common end-of-year financial considerations; however, it is not all-encompassing, and it is best to consult a financial professional directly for any additional information. It is crucial to tailor your end-of-year financial activities to suit your personal and financial circumstances best.

Denis Poljak is a Managing Director and a Wealth Manager with the Poljak Group Wealth Management at Steward Partners in Shreveport, Louisiana. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks, and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Steward Partners or its affiliates. Information contained herein has been obtained from sources considered to be reliable, but we do not guarantee their accuracy or completeness.

Steward Partners Investment Solutions, LLC, Member SIPC

The post MONEY MATTERS: End-of-Year Financial Planning Review appeared first on SB Magazine.