John, very good to see you a really important topic today, four ways to address the cost of long term care and medical expenses in retirement. According to Fidelity, the average 65 year old couple will need their nearly $315,000 for health care in retirement. That's not even including long term care. Long Term Care. Meanwhile, seven out of 10 people will need at some point, and that is not covered by Medicare, so your first option would be traditional long term care insurance. What are the pros and cons?

Yeah. So before we get into options, Erin, I really want to encourage the viewers, you have to have a talk. Yes, and this is the hardest thing to plan for in my experience, my my clients don't want to talk about this. Why? It's probably got the psychological belief of, you know, we're getting older, we're getting more fragile, and no one wants to think about their life in a retirement facility. I always think about that Happy Gilmore, you know where the grandma has to go into the retirement facility? No one wants to think about that. No one wants to think about giving up their independence. However, you're doing yourself a great disservice by not having a plan at any of the things that we're talking about in this video, just burying your head in the sand and saying this isn't going to happen to me. Statistically, we know that's not a likelihood, but you're setting yourself up for failure. So the alternative is sitting down and creating a plan with either yourself, your spouse, and it definitely an advisor to understand how you are going to fund this event, because. worst case scenario, you plan for it. It happens. You know how you're going to address it, best case scenario. You plan for it. You're healthy, you never need long term care, and you have other assets to address it or to leave to your heirs. 

Either way, have a plan with that being said, you mentioned traditional long term care insurance, right? Having a long term care plan is just not about insurance. Let me start that right there, but this is your most robust coverage. When it comes to planning, having a long term care plan, it's pretty simple, how much of that risk do you want on your shoulders? Or how much of that risk do you want on the insurance company shoulders? So this first topic is the most robust coverage your you're going to get. However, most people really don't like this option. And there's two reasons why, Erin, give me one of them. Give me the biggest reason why people don't like this insurance use it or lose it. Use it or lose it, right? They don't. They didn't want to spend 10s of 1000s of dollars, and they never use it, right? So for for a lot of people, that's a big issue. The second issue is, in the past, a lot of these companies, insurance companies did not know how to properly adjust the risk factors of long term care and the cost so you had these huge premium spikes. I'm not going to say that those premium spikes still aren't happening, but on the newer policies that and the companies that I've used for the few clients that have really wanted this robust coverage, we have seen little to no premium increases, not saying it can't happen, but I believe the pricing in these premiums is better, so this is your most robust coverage. But yes, if you don't use it, you lose it. And you know that's really had a shift in the insurance company to come up with other options, all right? And one of those other options here is asset backed insurance. What is this?

Yeah, so this is, again, you're using an insurance company for part of that risk, but you're buying a rider in either a permanent life insurance policy and, and I actually have that I have a life insurance permanent policy, and it's got a long term care rider attached to it. Why is this great? Because people say, Hey, I bought life insurance, and if I don't use it, well, then the death benefit goes to my heirs. If I do need it, then I have some Long Term Care coverage. And the way they're doing do that is they're going to accelerate the death benefit. So if you're pulling from the long term care, your death benefit is going to be reduced. The other The one thing I would caution people when it comes to life insurance is that you know, if you're trying to get as a couple, if you're trying to get that 500 to a million dollars worth of coverage and really have that robust coverage, you're going to have to buy a lot in life insurance, in death benefit, and that's going to spike your premium. So another alternative on the asset bank backed scenario is having policies that are more specific to long term care, either through whole insurance or through annuities. And for a lot of people, these are gaining popularity with my clients, because they're able to put maybe two or $300,000 premium, and depending on their health, they're able to have the insurance company then double or triple their premium benefit that they put in. So they're going to self pay with perhaps $300,000 but now they're going to leverage the remaining in this case, if the couple had a Tripler, they're going to get up to 900,000 plus dollars in Long Term Care coverage for the book. So that's going to protect them from a catastrophic Long Term Care event. Again, they're self paying with their $300,000 they understand that, but they're really using that money to leverage a bigger Long Term Care bomb, as if one or both of the spouses need it. The other thing that people like this is, you know, perhaps, and I always talk about, you know, in 15 years, what if we have Star Trek type of medical technology where, you know, we can heal our ailments? Well, if you're out of the surrender period, you can just take your cash accumulation or surrender value out of that annuity, and you still have access to that money. Or if you die, the money goes to your beneficiary, and then your next option would be to self insure. But this is difficult and risky and very expensive.

Yeah, so I mentioned your self insuring with, you know, the the long term care annuity, because the first money that's going to come out is yours, but this is self. All the risk is on your shoulders. So you have to give this money a job, a specific job, and you're going to have to, you know, budget out for a couple, I mean, I would say, at a bare minimum, $600,000 then the tricky part comes is, how are we going to invest this money? Because we don't know what tomorrow brings. Right, long term care is not always. You grew, grew old, and you fell, you know, and you were like a Life Alert commercial, and now you're in a long term care facility. It may be, you know, a person in their 40s who gets in a really bad car accident and needs to go to skilled nursing and assisted living for a year or two to recover from that catastrophic injury. So you have to understand how you're going to invest that money. You have to understand that you don't have access that if you are truly self insuring you need to park a portion of that money for long term care. And you have to understand that again, you know if, if you need this money, and you know, as you're getting older, you certainly can't take on crypto in these accounts, because the likelihood with every day is you're getting closer to that long term care event. So you have to be very careful when self insuring and investing that money,

Right? And then your last option would mean becoming a dependent, which is the reality of what will happen if you don't have a plan.

Yeah? And you know, what's the first thing that comes to your mind when you're a dependent? Is it you lose independence your kids? Yeah, right. There's another dependent you can become a dependent of, and that's a state. Yeah? And I don't know about you. Erin, yeah, I don't know about my definitely not my clients. Don't want this. I don't know about any of the viewers. How many of you want to lose your independence and have to put that burden on your children? Yes, we took care of it. You know, I have kids. You have kids. Erin, we took care of our children. If something happened to our parents, we would take care of them. But you know, your kids still have to work, and they have to provide for their families, and Long Term Care is a 24 hour a day, seven day a week, 365, day a year commitment in some cases. So you're really, you're really putting a lot of onus on your kids to forego work, events, traveling, you know, vacations, it's a big burden on them. And then, of course, there's the Medicaid or Medi Cal spend down, where you've now self insured, but you didn't have the funds, and now you're out of money. And you know, we're not going to go into all the details of what puts you on Medicaid or Medi Cal, but now you're in, you know, a state facility. Now you're being in a state run insurance program, and it's not the place you want to be. So, you know, have a plan so you avoid these last two dependent topics.

Well, John, what's clear is that proactive planning is key. By long term care plans is before you need them, right? So have this conversation with a professional with your family now so that you can avoid, you know, avoid it when it's in crisis. John, if somebody wants to have that conversation with you, to discuss these options. What's the best way to get a hold of you?

Yeah, and you said it. Have the discussion. Look at the pros and cons. There is no silver bullet to any of these topics. They're just options. And sit down and really calculate and talk through these options with you, your spouse, your kids, and come up with the best option. So if you want to learn more about long term care, and we covered with Tom, and I had a great podcast talking about skilled nursing. And, you know, I believe Tom called the state plan, you know, four walls and a bed, go to our website, www.gosecurus.com we have plenty of videos on all topics retirement, including Long Term Care podcasts. And while you're on our website, if you have any questions, you can visit the contact us tab and you can click on a 20 minute phone call where we will answer any general questions for you, or if you want our help, you can go ahead and schedule a complimentary one hour, vision, and clarity consultation.

 John, thank you. Thank you Erin.