​
When having the discussion on buying a LTC policy there are a few aspects to think about.

Cost of care:
This aspect is usually over looked during the process but is the most important part.
The average daily cost of a home health care is $228 for 12 hours at $19h about $6840 per month and $82,080 per year.

The starting cost of a private room in an assisted living community is $134 a day $4000 per month $48,000 per year, and can get up to about $10,000 per month and $120,000 per year.

Cost of Premium:
Most people tend to look at the premium and say it’s too high.
For example, a healthy 55-year-old man would pay nearly $6,870 per year for a LTC policy that pays $200 per day for five years and increases the benefits by 5 percent compounded each year. Providing up to $365,000 in coverage (in today’s dollars) when you multiply the daily benefit by the benefit period.

On the hand the same 55-year-old man would pay only $1,534 per year for a LTC policy that covers $150 a day for three years with a 3-percent compound inflation adjustment. Providing up to $164,250 in coverage (in today's dollars) when you multiply the daily benefit by the benefit period.

People tend to go with the lesser of the 2 options (listed) since the premium is much lower.
But what is the so-called “high premium” compared too? If you compare it to the yearly cost of care, it is pennies on the dollar. The only real question that needs to be asked is how long will I live, and will it be in place to cover all my expenses?

By reducing the inflation adjustment delivers the biggest savings. You need to have some inflation protection, especially if you buy coverage in your fifties or sixties and may not need care for 20 years or more.

Shortening the benefit period saves money but probably wouldn't provide enough coverage for a degenerative condition, such as Alzheimer's. Couples can hedge their bets by buying a shared-benefit policy. Instead of, say, a three-year benefit period each, they'd have a pool of six years to use between them.

Extending the waiting period can also lower the premium, although you'll have to pay the full cost of care before your insurance covers anything. Policies with a 90-day waiting period tend to offer a good balance, but look for a "calendar day" waiting period. That starts the clock ticking as soon as you qualify for care, either because you need help with two activities of daily living or have cognitive impairment. A "service day" waiting period has the same benefit trigger but counts only the days you receive care. Some insurers, charge about 15 percent extra for a policy with no waiting period for home care.

All policies can be tweaked to save hundreds of dollars in premiums, but is saving a few dollars now worth the reality of spending thousands of dollars out of pocket later? 

​Vasilios "Voss" Speros 602-531-5141
#LifeInsurance #RetirementStrategies #‎sperosfinancial
http://www.sperosfinancial.com/
https://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
vsperos@sperosfinancial.com
85254

Ruth Davis Konigsberg @ruthdkonigsberg
Jan. 14, 2015 

Parents often find themselves between a rock and a hard place when it comes to doing what's best for themselves and their children. One financial adviser offers a formula to make it easier.
 
It’s a uniquely Gen X personal finance dilemma: Should those of us with young children be socking away our savings in 401(k)s and IRAs to make up for Social Security’s predicted shortfall, or in 529s to meet our children’s inevitably gigantic college tuition bills? Ideally, of course, we’d contribute to both—but that would require considerable discretionary income. If you have to chose one over the other, which should you pick?

There are two distinct schools of thought on the answer. The first advocates saving for retirement over college because it’s more important to ensure your own financial health. This is sort of an extension of the put-on-your-own-oxygen-mask-first maxim, and it certainly makes some sense: Your kids can always borrow for college, but you can’t really borrow for retirement, with the exception of a reverse home mortgage, which most advisers think is a terrible idea.

The flip side of this, however, is that while you can choose when to retire and delay it if necessary, you can’t really delay when your kid goes to college. Moreover, the cost of tuition has been rising at a much faster rate than inflation, another argument for making college savings a priority. Finally, many parents don’t want to saddle their young with an enormous amount of debt when they graduate.

According to a recent survey by Sallie Mae and Ipsos, out-of-pocket parental contributions for college, whether from current income or savings, increased in 2014, while borrowing by students and parents actually dropped to the lowest level in five years, perhaps the result of an improved economy and a bull market for stocks. But clearly, parents often find themselves between a rock and a hard place when it comes to doing what’s best for themselves and their children: While 21% of families did not rely on any financial aid or borrowing at all, 7% percent withdrew money from retirement accounts.

If you’re struggling with this decision, one approach that may help is to let time guide your choices, since starting early can make such a huge difference thanks to the power of compound interest. Ideally, this would mean participating in a 401(k) starting at age 25 and contributing anywhere from 10% to 15%, as is currently recommended. Do that for a decade, and even if your income is quite low, the early saving will put you way ahead of the game and give you more leeway for the next phase, which commences when you have children (or, for the sake of my model, when you’re 35).

As soon as your first child is born, open a 529 or similar college savings account. Put in as much money as possible, reducing your retirement contributions if you have to in order to again take advantage of the early start. Meanwhile, your retirement account can continue to grow on its own from reinvested dividends and, hopefully, positive returns. Throw anything you can into the 529s—from the smallest birthday check from grandma to your annual bonus—in the first five or so years of a child’s life, because pretty soon you will have to switch back to saving for retirement again.

By the time you’re 45, you will have two decades of saving and investing under your belt and two portfolios as a result, either of which you can continue to fund depending on its size and your cost calculations for both retirement and college. You probably also now have a substantially larger income and hopefully might be able to contribute to both simultaneously moving forward, or make catch-up payments with one or the other if you see major shortfalls. At this point, however, retirement should once again be the central focus for the next decade—until your child heads off to college and you have start writing checks for living expenses, dorm fees, and textbooks. Don’t worry, you still have another 10 to 15 years to earn more money for retirement, although those contributions will have less long-term impact due to the shorter time horizon.

Of course, this strategy doesn’t guarantee that your kids won’t have to apply for scholarships or take out loans, or that you won’t have to put off retiring until 75. But at least you will know that you did everything in your power to try to plan in advance.

Vasilios "Voss" Speros 602-531-5141
#LifeInsurance #RetirementStrategies #‎sperosfinancial
http://www.sperosfinancial.com/
https://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
vsperos@sperosfinancial.com
85254

Saturday, October 11, 2014
Byron W. Ellis
I have found that the No. 1 concern of most retirees is potential healthcare costs. I also have experienced that most retirees tend to avoid making a decision on how to prepare for potential long-term care costs.

When you think about long-term care, what is the first thing that comes to mind? For many, it may be nursing homes or something associated with aging and increasing medical needs. In a broad sense, this is appropriate, but much has changed in the last decade or two in regard to long-term care options and how to fund them.

Boomers (and the next generation of retirees) need to plan for long-term care in a different way than their parents as they’re facing the unclear future of entitlement benefits and rapidly rising medical costs. And they’re living longer. When it comes to long-term care planning, many people have the “it won’t happen to me” attitude; however, approximately 70 percent of people over age 65 will need some sort of long-term care assistance during retirement.

Evolving long-term care options
The difficult question that weighs on many people is how do you plan for these unforeseen expenses so they don’t derail retirement? When planning for long-term care costs, you have options such as earmarking savings for medical expenses or relying on entitlement benefits or family.
 
Long-term care insurance is another option for people to consider. Over the past several years, insurance products have evolved with care options and trends. Today, nearly half of benefits paid by private insurers are for in-home care or assisted-living care. Whereas before long-term care was primarily used to pay for skilled nursing care.** Many current policies also pay the benefit to the insured or insureds, unlike many policies in the past that paid a nursing facility directly. To understand more about the evolution of long-term care, here’s a deeper look at long-term care planning past and present:
 
 Government programs: Those in the silent generation (those born during the Great Depression and World War II) were among the first to experience longer life spans, and the first to have access to official long-term nursing care facilities. However, the question of whether entitlements would be there was not a topic of conversation for this generation. As more boomers reach retirement age, the potential of a strain on government entitlement programs has become an increasing concern as current benefits may not cover most medical services a person with long-term care needs will face.

Long-term care insurance: With long-term care insurance being a relatively new idea, many parents of baby boomers likely didn’t consider the potential needs (and realistic costs associated) of formal long-term care. Since then, a number of options have been developed by insurers to meet boomer’s long-term care needs, and over time, long-term care insurance features have evolved. Some of them include:

Straight long-term care insurance policies: These are policies that pay a benefit up to the daily or monthly maximum. The amount can be paid to the insured person, who can then pay the care provider. The insured person also can choose to pay for the care provider to bill the insurance company directly.
Life insurance policies with a unique rider: Advanced benefit riders can be somewhat inexpensive additions to a life insurance policy, and they allow the death benefit (often up to 90 percent) to be paid in advance of death if the funds are needed for long-term care. Whatever amount is provided to the insured is simply deducted from the death benefit when that person passes away.

Policies that combine life insurance and long-term care insurance into one policy: Some insurance plan options may allow a lump sum premium to be paid for insurance that provides a combination of benefits such as a death benefit and the ability to advance most of that benefit for long-term care needs. These policies may even include a “right to rescind” the contract in which the policyholder may change his or her mind after a period of time and the full premium is refunded (if no benefit has been paid).

Family: Relying on family may seem like the simplest option, and it’s one that many people with long-term care needs choose, sometimes out of necessity. However, the emotional, physical and financial stress on family members caring for a dependent family member can be a very large undertaking. If you plan to rely on family members to support your long-term care needs, make sure to tell them well in advance so they can create a plan to address your needs and wishes.

An aging person who needs care may choose from many options to help provide or fund professional care including family, government resources, self-insurance (if there are enough assets) or private insurance. Each of these options has some merit, but in most cases, no single option on its own will cover everything. It’s difficult to predict what kind of long-term care needs you may need, which is why you may want to talk with a professional who can discuss the options for your unique situation.
Saturday, October 11, 2014
Byron W. Ellis, CFP, CLU, ChFC, CRPC, is a private wealth adviser and a Certified Financial Planner with Ellis & Ellis, a private wealth advisory practice of Ameriprise Financial Services.

Vasilios "Voss" Speros 602-531-5141
#LifeInsurance #RetirementStrategies #‎sperosfinancial
http://www.sperosfinancial.com/
https://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
vsperos@sperosfinancial.com
85254

​Q. Can you retire if you have $2 million in savings at age 65?
 
A: There are 2 options:
1.Depending on how long you live -- and how you live! Think about it this way: There has been a lot of work done showing that if you pull no more than 4% out of your retirement accounts a year, your money will last for 30 years.
 
On 2 million, that means you're starting by pulling out $80,000. Can you live on that?
 
Can you live on that plus Social Security when you begin taking that? The answer of course, depends on your lifestyle and whether you're planning the sort of retirement where you'll continue to earn money.
 
2.Another option would be to create a personal pension at retirement that will guarantee 8% yearly. Using only half of the $2 million you have in savings, you have created $80,000 a year guaranteed to last the rest of your life (30 years +). If you used the whole $2 million it would generate $160,000 a year guaranteed.
 
Plus your social security when you begin to take it.
 
The key to this plan is to diversify with permanent life insurance. Your Death benefit needs to match your total assets at retirement.
 
For more information contact:
Voss Speros 602.531.5141
Speros Financial
www.sperosfinancial.com

December 11, 2014 • Robert Laura
As I reflect on another year of retirement planning conversations, I’m reminded of how complex retirement has become. It requires an intricate balance among personal and financial needs, goals and desires. It’s seen as one of life’s goals, yet for the unsuspecting and unprepared, it can turn out to be anything but a cherished reward.

The following is my list of retirement musings, mined from the conversations I’ve had with individuals, families and groups this year, things advisors should consider as they lay out plans for both their clients and their practices next year:

1) Retirement success isn’t what you think. A successful retirement isn’t one without problems, but one in which clients learn to overcome them. Too often, retirement is portrayed as a utopian phase of life, void of pain, suffering and heartache. But crossing this magical line does not eliminate stress, remove relationship issues or motivate you to live healthier.

Advisors may know these things, but the ideas are often groundbreaking for clients. The conversation with those clients must first acknowledge that true independence and freedom come from managing life’s trials, not just one’s investments. 

2) Retirement isn’t just about money. One of the greatest tragedies about retirement is that too many people are concerned more with what they own than with who they are. A person may retire with all the financial resources needed to maintain a certain standard of living, but money won’t buy love, health, family or friends. 

A client’s attitude can shape both his perceptions and actions. By empowering clients to make the most of everyday life in retirement, advisors can better prepare them for a smooth transition as they seek to replace their career identity, make new friends outside of the workplace and stay fit and capable. For this, they need to develop a personal plan to replace the things work provided for them: self-worth, deadlines and relevancy.

3) Retirement is about managing feelings. Advisors often warn clients against the dangers of making “emotional” investment decisions, contending instead that successful investing is guided by good habits and self-control, not by whims and knee-jerk reactions. The same advice should come to bear when clients make certain requests -- to change beneficiaries, withdraw more money or support adult children. 

Feelings not only slow down and muddle the investment process, they also pollute a client’s retirement. Feelings by themselves aren’t always reliable and positive; they can betray and deceive clients who don’t understand underlying causes or what actions can be taken to change them. 

4) Retirement goals are not everything. The retirement savings crisis that America faces has created another problem. We have created a society that worships the dollar amount it takes to create the perfect retirement. Once again, money has an important role in retirement, but it’s essential to look beyond the numbers and consider what clients may be trading off for those precious dollars and cents.

At the end of the day -- or their lives -- very few people ask to be surrounded by their stuff as they breathe their last breath. Remember, it’s not what clients have that shapes their lives, it’s what they do consistently.

5) Retirement is a working paradox. Retirement’s great paradox is that the very thing people think they are leaving behind is required to propel them forward. Retirement takes work. Nothing about retirement is automatic. It takes, among other things, time, energy and practice. 

This seeming contradiction can get lost in the shuffle during traditional retirement planning. But it’s important to explain to clients that they may be busier in retirement than they were when employed, at least if they want to make sure that their money lasts and that they remain fulfilled and connected. This is actually a welcome aspect of retirement, however, for clients who have a hard time doing nothing. 

6) Retirement doesn’t take place on paper. On paper, a lot of things can look promising: a sports team’s starting lineup, a business idea or an upcoming event. But as the game starts, things don’t always work out as planned. Just as no couple can plan their entire marriage on their wedding day, a person can’t plan his or her entire retirement. It’s an ongoing process to which one must become acclimated and learn from over time. That’s not being negative, that’s being realistic.
Success in retirement is truly the result of good judgment. This often means learning from difficult experiences, the result of missed opportunities or bad decisions. Only by experiencing the difficulties of life and going through the transition that retirement presents each day can clients truly appreciate the freedom retirement offers.

As you approach another year of retirement planning, don’t build your practice on the shifting sands of numbers and returns but on relationships and service. Never surrender to what is deemed acceptable; seek out the ways that go against the grain and challenge the status quo. It’s essential to our industry that we get people to do what they resist doing so that, later on, they will become everything they want to be. What’s life’s ultimate treasure? It isn’t retirement; its wisdom applied to one’s everyday life. 

​Vasilios "Voss" Speros 602-531-5141
#LifeInsurance #RetirementStrategies #‎sperosfinancial
http://www.sperosfinancial.com/
https://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
vsperos@sperosfinancial.com
85254