Wealth Management Blog

Posts tagged Long-term Care

Statistics Don’t Tell the Real Story of Alzheimer’s Dementia

By JJ Burns

May 7, 2018

Recently, I watched a segment on 60 Minutes that moved me to tears. It was about a couple living with Alzheimer’s, and I’d like to share a few national statistics about this terrible disease:

  • Alzheimer’s is the 6th leading cause of death in the U.S.
  • An estimated 5.7 million Americans of all ages are living with Alzheimer's dementia in 2018
  • 16.1 million Americans provide unpaid care for people with Alzheimer’s or other dementias

While these statistics are powerful, they don’t tell the story of what it’s like to live with the devastating emotional, physical and financial effects of Alzheimer’s. But 60 Minutes did tell that story in heartbreaking detail. For 10 years, Dr. Jon LaPook has been checking in on and interviewing Carol Daly, a woman diagnosed with Alzheimer's, and her caregiver husband, Mike. As you step into their shoes and live the devastating impact the disease is having on each of them, you learn the real costs of Alzheimer’s.

I encourage you to take 12 minutes and watch this piece.

Our role as a trusted advisor to several hundred families is incredibly fulfilling. We’re able to help people clarify, plan for and achieve their most important life goals. Yet it is also filled with many heartbreaking moments, often centered around a change in their health. Of all the issues we help clients with—from unexpected changes in their job, to challenging family dynamics, to divorce—the one that I find to be the most devastating and insidious to a family is either a sudden loss or a diagnosis such as Alzheimer’s.

What most people don’t talk about is the potentially catastrophic financial effects of a life-sentence disease. While the emotional and physical stress is certainly overwhelming, it is the financial stress that often breaks the proverbial camel’s back. People are faced with a dizzying array of choices and decisions that they must make under emotional duress when it’s most difficult to clearly evaluate choices rationally. The costs of care from prescription drugs, to therapies, to care services, to care supplies, to travel and more add up at an alarming rate.

What I believe in my heart, and what most people fail to grasp, is that financial planning and wealth management is so much more than just investment management and how to grow and/or draw income from assets. It is about developing a sound yet flexible plan that addresses both the highs and the lows that life inevitably serves up. As a trusted advisor to my clients, it is incumbent upon me to raise awareness about these issues. And as a client of JJ Burns, you can expect our help in addressing the full range of your financial interests—even those that may not be fun to address.

Client needs are best served by developing a sound wealth management plan. A sound plan is one that lifts the hood and looks at and coordinates all areas of a client’s financial life from living wills, durable powers of attorney, types and rules of medical coverages, insurance policies, taxes and so much more. This is the stage I call “prepare for the worst and hope for the best while living fully.”

I am grateful for the opportunity to serve my clients. I know that in tough times, after immediate family members, we are the ones receiving the next call. As disheartening as it is to hear from a client, “I’ve been diagnosed with Alzheimer’s,” we take great pride in knowing we have been there doing the hard work.

As our client, you will know you are prepared for difficult moments AND you will also know that we are right beside you all the way. That is the power of planning, that is the security of a plan, that is the comfort in having a truly great team.

On behalf of our entire wealth management team at JJ Burns & Company,

James J. Burns, CFP®
CEO/President
JJ Burns & Company

Tips on Long-Term Care Insurance

By JJ Burns

March 21, 2012

The cost of an extended nursing home stay can be frightening. In some parts of the country, annual expenses may run to $100,000 or even more. At that rate, it doesn’t take long for a lifetime’s savings to be depleted. That’s why most long-term care ends up on the tab of Medicaid, the joint federal-state health plan for the poor. But your family will qualify for help only after you’ve exhausted most of your assets.

Advance planning can help you avoid dire financial consequences. For instance, you could purchase a long-term care insurance (LTCI) policy for yourself or a relative to defray some or all of the nursing home costs. That can help preserve family funds and put off panic sales of investments. Still, premiums for LTCI are based on several factors, including the health of the person who’s being insured, and can be pricey. And the older you are when you get this insurance, the more you’ll pay.

What do you know about long-term care insurance? This brief quiz can test your knowledge.

1) Benefits under an LTCI policy will begin to be paid:

  1. Once the insured becomes ill or disabled.
  2. Once the insured applies for benefits.
  3. When the policy’s lifetime amount is fully paid up.
  4. After a waiting period has been satisfied.

2) Which of the following does NOT affect premium cost?

  1. The age of the insured
  2. The value of the insured’s retirement assets 
  3. The length of the benefit period
  4. The amount of the daily benefit

3) To qualify to receive LTCI benefits:

  1. The insured must sell any primary residence.
  2. The insured must need assistance with basic daily activities.
  3. The family must elect to begin coverage.
  4. The family must obtain permission from a nursing home.  

4) What is the tax treatment of LTCI policies?

  1. Premiums are fully tax-deductible.
  2. Premiums are tax-deductible only by retirees.
  3. Premiums may be partly tax-deductible.
  4. Premiums are never tax-deductible.

5) The amount that can be used to defray nursing home costs:

  1. Depends on the daily benefit.
  2. Depends on the insured’s age.
  3. Depends on the retirement assets owned by the insured.
  4. Is limited by state law.

6) A policy that is “guaranteed renewable” for life means that:

  1. It can’t be voided if the insured’s health changes.
  2. It can’t be voided whether or not the premiums are paid.
  3. It will still pay benefits after the lifetime limit has been exceeded.
  4. Premiums can never increase.

7) LTCI policies are generally offered by:

  1. Banks.
  2. Estate planning attorneys.
  3. Medical practitioners.
  4. Financial services firms.

Answers: 1-d; 2-b; 3-b; 4-c; 5-a; 6-a; 7-d