Protecting your most important asset: Your family

1. Protecting your most important asset: Your family

2. The agenda… Why a plan for long-term care must be considered and what the consequences are if you don’t Developing a plan to protect your family and finances What will pay for that plan

3. My goals are to… Give you insight into the consequences your needing care over a period of years could have, not on you, but those you love Speak to the consequences an illness will have on your best thought out retirement plan Discuss the options for protecting both your family and finances should you need care over a period of time

4. Living a long life could well be in your future… Planning for it is now a necessity

5. I believe that reasonable people… Understand they could live a long life Believe that it’s possible they could become frail and need care if they age Are willing to consider taking action if they understand that needing care could have serious consequences to their family and retirement portfolio

6. That said, I’ve had clients tell me…

7. “That’s true but…” “What if I don’t live a long life? Very few in my family made it past their 70’s” Or… “Even if I do live a long life, what if I don’t need care? Everyone in my family was healthy until the day they died”

8. To which I have responded… You very well may be right… The risk of dying at an early age may be high and or… The risk of needing care may be low because of your family history

9. But have you thought about the consequences to those you love if you ever did live a long life and needed care over a period of years?

10. Not that it will happen to you, but here’s what causes the need for extended care…

11. A chronic debilitating medical condition Is an illness or illnesses that can be managed, not cured. They compromise your ability to get through the most basic daily functions A cognitive impairment Is a marked deterioration in your intellect making it difficult if not impossible for you to safely interact with your environment Both conditions require custodial, not medical, care 11

12. …and here’s what they do to the emotional and physical wellbeing of your family…

13. By definition, long-term care is a safety issue which means that providing care or supervising movement quickly becomes all consuming • This 24 hour responsibility has a direct impact on the caregiver’s emotional and physical wellbeing which inevitably… • Forces a child to step in causing her to re-orientate her life

14. Put simply, if you ever need care over a period of years your life won’t end…

15. Someone else’s life will likely end

16. A thought…

17. Did you notice there was no mention about nursing home care? • That’s because the real damage to the family begins not when a placement is made… • But when the decision is made to keep the person they love at home

18. Does anyone know why families struggle, often against the odds, to keep someone at home?

19. Because making a placement breaks your heart

20. How a plan can protect your family

21. The plan has 2 objectives The first is to allow you to remain in the community without risking the emotional and physical wellbeing of those who will provide your care The second is to preserve your retirement plan so it can execute for the purposes you intended which generally include Generating income to support your lifestyle Minimizing taxes Insuring the financial viability of your surviving spouse

22. Paying for your plan… How paying for care can impact your retirement portfolio

23. During working years… A portfolio is created and funded that will accomplish two critical goals… Help defray the cost of college And assure lifestyle during retirement During working years your ability to guarantee there will be enough income to fund the portfolio as well as meet normal expenses…

24. Is guaranteed by an insurance portfolio

25. Asset Portfolio & IncomeProtection Portfolio Automobile  Family  Wealth  House  Salary  Auto insurance Life & health insurance More life insurance Home owners insurance Disability income

26. The question at retirement becomes…

27. What is protecting your retirement portfolio which will be generating income?

28. Alan & Camille are 43 years old. They have 2 children…

29. Their combined income is $200,000 per year The house is worth $850,000. It has a mortgage of $200,000 Their retirement portfolio is just under $500,000 One child is in private school, the other in college In addition they belong to a club, have modest credit card debt and purchase a car every 5 years

30. Alan dies suddenly of a heart attack

31. What has been allocated from the retirement portfolio and/or equity in the house to pay for the continuing obligations his wife will face?

32. Nothing… Alan purchased life insurance Alan didn’t think he would die during working years. In fact, statistically he was correct He knew, however, that even though the risk might be low, the consequences would be catastrophic to his family Alan purchased life insurance for the same reason everyone purchases life insurance…

33. He loved his family

34. The couple make it to 78…

35. Their house is paid off and worth $1,500,000. Their portfolio, worth $1,500,000, generates $75,000. When added to their social security they gross $100,000 per year His passion is golf. Camille rides horses. Both love to travel and they have a house in Florida They have a child who has not made the best decisions and are helping to pay for their grandchildren’s education

36. Camille is diagnosed with Alzheimer’s

37. What has been allocated from the retirement portfolio and their income to pay for her care over the next 8 to 10 years?

38. All of it Where else can the funds come from?

39. Alan is now faced with how to pay for his wife’s custodial care. He looks into…

40. Medicare, but finds it won't pay for custodial care The VA, but again is told it’s not an option given his assets and income Medicaid and this time he learns it will pay for custodial care, but almost exclusively in a nursing home. Alan promises himself it’s the last option but wants to know what would happen if he needed the program. He finds out…

41. That to qualify for benefits he would have to give his assets away • The problem is that they consist of low cost based investments and qualified funds the gifting of which would create substantial taxes. In other words… • Medicaid is not free

42. In an effort to preserve his income and assets he provides the care himself creating an unintended consequence that will end up devastating his children… His heath starts to fail to the point where a child has no choice but to step in and assist What does that do to her health and the relationship with siblings who do not help out?

43. Camille has Alzheimer’s…

44. Her husband and children suffer from it

45. Finding the right solution: Looking at long-term care insurance as an essential tool which protects your family and retirement portfolio

46. How many believe the product protects them if they need care over a period of years?

47. It doesn’t

48. It protects your family… It allows your spouse to maintain her relationship with you as a spouse who supervises rather than provides care And by doing so… It allows your children to maintain their lives which has the added benefit of… Keeping them close by keeping them apart

49. …and it makes this possible not by protecting assets, but rather by providing a stream of income which pays for that care

50. And that creates…TheCascade Effect