Coming Storm

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CardinalGuide.com, Cardinal Advisors, and Hahn-Shile CFP sell insurance. This show does not offer investment products or investment advice. Welcome to Finishing Well. Today's show, a little different. We're going to call it the coming storm. And because there's sort of a storm coming, you know, I'm not like usually I would start off with a Bible verse and kind of a biblical theme, but I think before we use the biblical theme, I'd kind of like to describe the storm. And so we've got our certified financial planner Hahn-Shile with us.

And Hahn, this particular storm is one that really has changed over time for you. And you're seeing things kind of in a new light. Well, I am, you know, I'm reading, which I do every month, the Journal for Financial Planning, July 2021.

And for most of you, yawn, yawn. I mean, this is not some, the most exciting reading in the world, but this is, you know, I read this in the probably 20 other periodicals every month. I'm reading this article and it's called The Databased Approach to Engaging Clients in a Discussion of Long-Term Care. And it's by Robert Pokorski. And anybody that really wants to read this article, it's in our professional journals. I'll certainly make it available to you.

You can just write to me at hahnse at cardinalguide.com or, you know, we can get this on the website. And so I'm reading this kind of thing and I thought this ought to be interesting. And I have stayed away from statistics about the risk of long-term care for all of our listeners. You haven't really heard me ever really going over, these are your chances of using a nursing home.

This is your chance of getting Alzheimer's. This is your chance of going broke, paying for, because I'm really, first of all, I'm, I don't like those kinds of statistics. They're designed to scare people. They're come up by the insurance industry, which I've been a part of.

And then furthermore, they don't work. I mean, if anything, people are quoting to me, prospective clients, people that are listening to me, people that are meeting with me, they're saying, well, I'm not going to need that. I don't want to buy that. I don't, you know, I'm going to die before I end up in a nursing home. So people are quoting statistics back to me as they see them in the future. So generally, I've stayed away from this kind of stuff, but I'm sitting there on the plane or read the whole article. And this thing grabbed me right in the beginning, because it just, you know, the guys saying that financial service companies that serve the older age market, they're quoting old statistics. And that statistic, which they say over and over and over is that seven in 10 people over the age of 65 will need long term care. And this article goes through and puts me behind all the statistics and the quote and where they got that from. But, you know, if that was really true, that if seven in 10 people actually use their long term care policy for what we're offering it for, for custodial care, and they use it just significantly, there is no way they could even offer these policies.

Because that would mean that seven in 10 people are collecting two to three to four to $500,000 out of these things. And that's why I've avoided this stuff. So and I really liked this guy that's giving us all these statistics. Right off the bat, he's saying this stuff that they're putting out there is inaccurate.

And then what I could add to that is it doesn't really work. Well, then he goes on in a very modern way, like people are receiving care now, and defines the risk. It just talks about, you know, as he says it, the why, the who, the where, the when, and what duration of long term care we're talking about. And we're not going to attempt on one radio show to go through the whole article. And what I wanted to get across today is I just realized to myself that I've just ignored the statistics on this. And I've really been able to ignore the statistics because this is a huge problem. For the people this does happen to, the consequences are devastating to them and their family. And, you know, I could just, and I have talked on this radio show, time and time again, and, you know, I've had this in my own family. You know, Robbie, you've had it in your own family, and are living that with your current, you know, with your family, and it's just the whole caregiver thing.

And the fact that when when somebody goes down, then it's expensive to hire care, even if you're bringing it into your home, and that the consequences of this are just devastating, and to the point where you need to prepare for this, and you need a plan. And I'm so convinced of that, I don't really need to read statistics. But being there, as I took the opportunity with this article to just go through the whole thing, and this is about as well-written of an article as I've seen if somebody was really like a lawyer gonna prove the case of, you need to have a plan for this, you need to prepare for this storm that's coming. Yeah, the things I really liked about the article myself as I read it and we begin to discuss it, it was that he took everything into account. Like, you know, I've heard a lot of people say we need long-term care for the skilled stuff, but the skilled stuff is actually covered by Medicare and what you see nowadays, and he actually went into it in the article, is the hospitals like got a time clock running the very minute you start using skilled care, they're trying to figure out a way to get you off that stuff, and sending you to skilled care facilities or whatever they can do. I mean, he outlined all that so that there wouldn't be information misinformation, right?

Well, he did. And, you know, back when I started offering long-term care insurance, we're in the 1980s now when the policies first came out, it was really the early 80s, many of those policies only covered skilled care. So that's the way the insurance companies, they knew what they were doing. They're selling a policy to people, giving them a false security, because it paid real well if you're needing skilled care for five years, or three years, or two years, or, you know, hundreds of thousands of dollars. But the problem is, is that people use skilled care for days and weeks, and then they get downgraded to intermediate care, and then they get further downgraded to custodial care, they get sent home for custodial care, because you don't need a skilled professional medical person to administer. We're talking about bathing, dressing, transferring, toileting, feeding you, preparing meals, taking care of your yard, just basically helping you function when you can't do these things for yourself. That's what, it's custodial care that covers a lot of people.

And so he really clearly pointed that out. And so many of the articles that are written about long-term care by people who, I guess reporters or whatever, they don't know what they're talking about, they focus on all that skilled care stuff. And that's not really what we're talking about. Right.

And he goes into great, what I thought was clearly practical information about, you know, these are the people who might possibly be able to provide that, and numbers. And one of the reasons why I used the title, or thought of the title, The Coming Storm, is that as the baby boomers are getting older and, you know, the number of caregivers is actually in a way getting smaller. And even a statistic I hadn't taken into account for at all was that since families are smaller, there's less children to take care of the parents than ever before, which leads to something I had never even heard before, but I really like the term, is orphaned elder. Or was it, did I get it backwards? You got it backwards, but that's right, elder orphans. Right. You know, they define that as, you know, a person is not, you know, as an elder orphan when they have no one within 10 miles that's very close to them, like a son or a daughter or brother or sister. And you just think about it. You just think in your own family and how spread out we are now.

I mean, we're real fortunate. Our youngest son, who just graduated from NC State, he lives at 10 miles, or he's right on the borderline of that, because he's living in Raleigh. Our older son, he's in Wellington, and you know, he's two and a half hours away. So, and for many people, they're, all their kids are 10 miles away.

I mean, there's just not that many people in the old farm, farmstead, you know? Yeah. And so as, as the baby boomers come on and the caregivers get less, and now we've got more of the orphaned elders, then the other interesting thing that I thought that he mentioned was the cost of this stuff, you know, when you got supply and demand is on the rise big time and going to rise a great deal more.

Well, yeah. And how about the cost to the caregiver, which you were mentioning, you know, a mutual friend of ours is, I'll talk about that a little bit. Yeah, that too was, you know, in fact, that was probably the thing that struck me about the article more than anything else, as, you know, they listed what the financial burden was on the families of people that are being cared for. So, you know, clearly, I immediately thought about, well, what did it cost me when my dad got sick? You know, what is it costing us now that we're taking care of my mother-in-law? And immediately you go, oh, well, immediately you go, oh, yeah, because they mentioned, you know, that people go from full-time to part-time, that their savings goes down because, you know, they have to take more time away from work.

And I have another employee here at Truth Broadcasting that recently was dealing, you know, with his mother-in-law and immediately, you know, it wasn't uncommon at all for him to be gone a day or two, almost every week. And you can see the strain on his family and the strain on, you know, it's clearly there is a cost that is associated with this, and it's part of what we get to plan for, you know, as family members. Tom Well, yeah, and so many people, I don't hear this as much as I used to, but I still hear it telling me, oh, my kids will take care of me, or people that I expect my kids to take care of me. Or, you know, you hear the kids saying, you know, kids, I'm talking about people that are 60, 65, that are coming in and doing financial planning with me. Oh, I'm going to take care of my mother, or, you know, my mother's, you know, and you just hear it and all. And a lot of that is just not based in reality.

Yeah, so, well, I hate that we're up on a break already. We got so much to talk about, including the Bible verse that we're going to get to. But, you know, this show is brought to you by Cardinal Guide and certified financial planner, Han Shyle, who's there at cardinalguide.com. His book, The Complete Cardinal Guide to Planning for and Living in Retirement, is easily available there at the website, cardinalguide.com.

And this chapter, which, you know, is long-term care, there's loads of information in the book for that, and you can download that, load that for free at the website as well. It's easier just to email Hans and say, I want the book, but, you know, I always mention that the PDF is there, available at cardinalguide.com, as well as podcasts, lots and lots and lots of podcasts that we have done on the subject of long-term care. You can go to cardinalguide.com and listen to any previous episode, and we'll be right back with so much more finishing well in just a minute. But, Hans and I would love to take our show on the road to your church, Sunday school, Christian, or civic group. Here's a chance for you to advance the kingdom through financial resources by leveraging Han's expertise in qualified charitable contributions, veterans aid and attendance, IRAs, Social Security, Medicare, and long-term care. Just go to cardinalguide.com and contact Hans to schedule a live recording of Finishing Well at your church, Sunday school, Christian, or civic group. Contact Hans at cardinalguide.com.

That's cardinalguide.com. Welcome back to Finishing Well today's show. The coming storm, and, you know, usually I don't go this way, but as I was thinking about this, I was convicted, and I didn't want you to, you know, get away with this, you know, without not getting a little conviction yourself. So here's the Bible verse that I know many of you are familiar with, but it certainly does apply, and I hadn't really thought about how this applies to me on this subject, but it's 1st Timothy 5-8. If anyone does not provide for his own, and especially for those of his own household, he has denied the faith and is worse than an unbeliever. Well, when I originally thought about this topic, you know, like while we're talking about my own care, so if I don't make arrangements for my own care, that's not the same thing as for my own family. Well, as I now realize all too well, having experienced this long-term care thing, if I don't have a plan for this for myself, then what happens is it puts the burden of how are we going to deal with this on my kids, that's the financial and emotional burden, but then it also, you know, clearly puts a relational burden on the whole deal that I can see, like I never have seen before, how necessary it is to really have these discussions with my kids, have these plans in place financially, and really see that it is a coming storm, because based on the statistics that, you know, we don't necessarily need to go into them, but Hans, it was pretty obvious that if you take a man and his wife, and I think there was like something small, like 6% of the people will not face this either for themselves or their wife, in other words, the couple, you are going to deal with this.

Oh sure, you absolutely are, and you know, families, this is a family issue, and the caregiving and the difficulty of this, so you're providing for your own by planning for this, because it's coming, and it's going to be a whole lot better if you have a plan in place, if your wishes are out there, if you've talked to your kids about it, your kids might themselves put together a plan in their own family, and then I see that people, most people don't plan for it, let's just get clear on that, and this creates all types of difficulties between siblings, you know, if there's two or three children, there's going to be one of them that's going to be much more involved than the other two, and there's probably going to be one of them that's an outlier, that lives a long distance away, the women end up doing more than the men do, in most cases, not always, but the women end up bearing the brunt of this, and then, you know, it just creates difficulties, and that's further stress on like you, if this is who you're talking about, where having a plan in place, like what am I going to do, how am I going to provide, not just financially, but emotionally, and who's going to provide this care, who's going to pay for the cost of that, and there's a certain amount of care that you can't hire a caregiver to do. I know when we, when my mom was put in an assisted living, I mean, first of all, she was much happier there. She had Alzheimer's, and she was much happier there in the end, the last couple three years, and I spent a great deal of time with her, and, but I wasn't actually giving her a bath, and I wasn't preparing her meals, and I wasn't staying up in the middle of the night dealing with her roaming around, and on and on and on. I was going over there and spending about an hour a day hanging out with her, and in and amongst the caregivers. So the whole purpose of today's show is to really just talk about the problem, to teach you that just going through the statistics and the probabilities of this happening has been good for me.

I'm not so sure it's necessary for you, the listeners, but I just want to give you the benefit of both my experience and my study of these. And there's the, you know, there's this other thing, you know, it's easier to see sometimes in somebody else's family than in your own, but, you know, based on this other person I know very well, that when all of a sudden it became time to put this person in into some type of assisted living or whatever, then all their relatives of their spouse came into town. And each of them, even though they weren't in town, and they weren't in charge of, they all had a very definite opinion how all this should be done. And since it hadn't been laid out in advance, the, you know, essentially bad will that was sold within the family was remarkable.

People have different ideas about how money ought to be invested, or whatever the stockbroker did or didn't do in investing the money. You know, they're digging into mom and dad stuff, which is full of secrets, you know, that they've never shared with anybody. And now somebody's digging in there. And, you know, it's pretty easy to see things that were done years ago, and maybe certain money was given to one of the kids to help them out.

And they said they were going to pay it back, and they never did. And I mean, it's just like all the family secrets are just displayed. And then, you know, you got the problem at hand, and you got to call up the home health care place, and one family member thinks this needs to be done at home. They're not going to be the one to go over there and hang out with them because they live 500 miles away. And they think the one that lives 10 miles down the road needs to come do that. And then that other one thinks that they need to go to the assisted living. And then the other one thinks they need to give all the money away and try to get on Medicaid. I mean, it's just, absolutely. It's just periods of strife. And so my suggestion is, let's go have all that conflict now.

While we're healthy enough to do something about it. And let's get a plan, while mom or dad is of sound mind, to say, this is what I want. And this is who I want to make the decision. And this is who I want to care for.

And this is how I want to pay for. And there's another part to this that I really would not have put together until it happened to me is in, you know, there's a patriarch of the family and your family right now, you know, whoever is the oldest male is the patriarch. And so, you know, I had another good, good friend that passed away, left his wife, his oldest son became the patriarch of this particular family. And he called me this week with all sorts of burdens that had to do with his mom's care and with his brother's care.

And I could hear just the anguish of the thing. And the thing that made it, you know, kind of stick in my mind was that his father was one of my best friends ever. And I knew his father had tremendous wisdom and was an awesome father.

But he didn't realize that when you pass away, that part of what happens is you have somebody now who is going to take over as the patriarch. And as these things happen, you know, it'd be really, really helpful to have trained them a little bit or given them some information of how the family worked and how to do these things because, you know, it'd be nice like anytime that somebody's leaving one position to, you know, kind of prepare you for what's ahead. So I had another little piece of this that is in here, you know, it's third or fourth page, and it talks about long term care is needed for conditions where recovery is not expected or recovery is delayed. And I just found this real interesting.

I've never seen a chart like this. So it's got three little boxes. And two of the boxes are conditions that often require long term care. And then those two boxes are divided up, recovery is not expected. And then they're divided up into recovery is delayed, but it's still expected. With the presumption being that if recovery is either not going to happen, or it's delayed, that that's what we're talking about long term care, you know, it lists Alzheimer's disease and other dementias, severe stroke, crippling arthritis, severe brain and spinal cord injuries, progressive degenerative neurologic conditions. And so those are under recovery is not expected. I mean, you don't get better from those things.

And they can go on for years. Then over under the recovery is delayed, but can be expected. It talks about serious automobile accidents, some brain and spinal cord injuries, moderate stroke, some fractures or surgical procedures, and conditions where recovery is delayed. So, you know, it's talking about those are things where, you know, you're going to need six months, a year, year and a half, two years of care, but you're actually going to walk out of needing care.

And that's distinguished from the things that you're not going to walk out of these any better. And then the third area is where long term care is not needed in normal course of disease. And these are a lot of things that people think of first with long term care, and they actually most of them don't need heart attack or heart failure. Most people that have a heart attack or they have heart surgery or that they don't ever need long term care. They're unskilled for a while and they get better and they take care of themselves, minor stroke. Most cancers, most cancer patients do not need somebody to care for them other than, you know, that period right after their surgery or through their chemotherapy, and even then they can, most of them can get around.

Most fractures and joint replacements and accidents and conditions were normal recovery at first. So I just found that interesting that they break all those things out and I thought it might be beneficial. I mean, who can really say that one of these things in the first two categories is not going to happen to them? Oh yeah. I mean, you know, it just seems like it covers all. And the thing of it is, is once that's happened, you're not in a position to plan anymore for the most part, right?

Right. And so we do all this Medicare planning and just, it seems like universally people want to do that. And that's going to cover the skilled care piece of long-term care and the intermediate care. And what we many times ignore and deny the need for is custodial care coverage, which is the thing that is not covered by Medicare. And if it happens to you, it's going to cover a lot of years and a lot of months and it's going to cost a whole lot of money.

And you just, you flat need to plan for it. So, you know, Jesus made it pretty clear at the end of the Sermon on the Mount that you can build your house. There's a storm coming, he said.

He did. And he said, you can build it on sand or you can build it on the rock. And clearly he is the rock. And so as you look into this and pray about it in your own family, could I just suggest you pray to that rock? Help him to build your plan on solid ground that you know that your family is well taken care of and you know that he's in it. And of course, nothing would be more important than actually having him in your life.

And that's the biggest stone of all, isn't it, Han? So we're so grateful that you listened today again. It is this show, Finishing Well, brought to you by CardinalGuide.com. Their website has all kinds of podcasts, previous episodes on this very topic of long-term care, as well as the videos that are helpful with these whiteboards where Hans kind of shows you what he's talking about. There'll be a video on up there on this subject as well. So as always, we run out of time before we run out of show, Hans, but thank you again.

It was so much fun today. Hans Scheil Thank you and God bless you. Announcer Finishing Well is a general discussion and education of the issues facing retirees. Investments and taxes, as well as Hans' best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement, and the workbook. Once again, for dozens of free resources, past shows, or to get Hans' book, go to CardinalGuide.com. If you have a question, comment, or suggestion for future shows, click on The Finishing Well radio show on the website and send us a word. Once again, that's CardinalGuide.com. CardinalGuide.com. This is the Truth Network.