The Why And How Of Long Term Care Revisited

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This show does not offer investment products or investment advice. Welcome to Finishing Well with Certified Financial Planner, Hans Scheil. Today's show, how fun the why and how of long term care. So as we get into the why, and if you get a chance to see the video that's done on the same subject here at their YouTube page, which you can find, of course, at CardinalGuide.

You know, they have two columns and the column on the left is the why and the column on the right is the how. I couldn't help but think about what a lot of people call the longest journey in the world is the 18 inch trip between your head and your heart. And, you know, for a lot of us, you know, we spent a lot of years there in our head and then someday, you know, through our faith, we came to the realization that the action in our life really comes out of our heart, not out of our head. Because I'm sure if you sat there and thought about it logically, you know, just use your head, not a lot of people would ever have a pet or for that matter, even more scary if a lot of people just put the pencil to it. And unfortunately, a lot of young couples are doing that these days. Well, we shouldn't have kids, you know, this is expensive and, you know, this, oh man, they're going to go off to college, it's going to be even more and just think of all the hassle and change in diapers and oh, you know, it just, it adds up and adds up. And so, you know, when we look at the how of things, you know, we end up there and when you really think about the scriptures themselves, like if you try to read the Bible with just your head, you know, you'll end up like, man, you could listen to some of those people on TV that look at a scientific approach to the book of Genesis.

Like, man, you know, that will just get you in the weeds in a hurry because these are things, this is where the real action is. We get Jesus in our heart, not in our head. So that 18 inch journey from our head to our heart is what we're talking about today at the beginning of why. Why long-term care, and this at first take does not seem like a logical decision, but Hans, it's a critical one that people consider, right? We in the industry, and me in my practice, Tom and I, we have a tendency to just jump right to the how. And we start just talking about, oh, are you concerned about long-term care? Well, yeah, kind of, you know, but I've looked at that and then we start plugging in numbers and showing people how they can pay for it and talking whether they're going to do a hybrid or they're going to do regular long-term care or short-term care and how much it costs, how much it pays, why you need it so bad, how you can afford it. And then people generally look at all that and it just doesn't sound like a very good deal, you know? I mean, it's just too expensive. It's kind of like having kids or having a pet, you know? It's just, what's in this for me?

And I don't know if I want to pay that much. And so that's kind of welcomed my world. That's what I've been doing for my whole career, trying to impress people of the need for this and just kind of going right to the technical and the how. So what we're going to do today and what we did in this video is we said, look, let's just put the how aside for a second and the premiums and the price and the benefits and all that kind of stuff. And we talk about, in the beginning, like why do you, why are we suggesting you do this? Why are you going to be better off when you get much older, you and your spouse? Why are you going to be better off if you have a plan for long-term care and you've prepared for this and you've prepared your family for it? This is why you purchase or you consider purchasing long-term care insurance, okay?

And I just made a list in the video and it's right there and we're going to go over that point by point. So the first reason why and the main reason is you don't buy long-term care insurance, you don't make a long-term care plan for you because, I mean I guess it's partly for you, but you're the person who's sick and you're the person that's in pain and you're being cared for. I mean sure, there's a bit of that for you, but the people who really suffer from a lack of planning is your spouse and your adult children. I mean if you're 85 years old, your kids are going to be 55 or 60 when this is going on and their spouse is about the same age and then if you're fortunate enough to have multiple children, you know, when you have a stroke when you're 85 or you begin to develop dementia, and somebody's got to watch over you and care for you, make sure you don't hurt yourself and as well just have you go about your day in a safe manner, this creates a family crisis for them. And it happens all of a sudden. You'd think that people prepare for this as a person gets older, but the family's in denial about it and the person that it happens to and it's usually some event that creates a crisis and then the crisis is going to be there and it's going to feel awful for everybody, whether you plan for this or not. As you're talking, I couldn't help but think of, you know, I have a man that helps me actually with the Jesus' labor of love and has for years and I hadn't heard from him in a while, so I sent him an email and he described that he was experiencing PTSD and the PTSD was because he was his wife's caregiver. And what he experienced was as she began to get dementia and he was her full-time caregiver, that he had to have a watch on her all the time that she wouldn't go do something to hurt herself. And it kept him in a constant trauma for a period of five years. So you can imagine, and he went on to describe to me, you know, you're laying in bed at night but you still have sort of this watchful eye that's got to be going on because if she gets up she might go hurt herself and so he said, for five years I was in this constant trauma. And then unfortunately she passed away right after all these years of care and the next thing he knows he's having these completely debilitating panic attacks because of, you know, the continual trauma he was under for five years where his life was, you know, just being on full alert all the time. And now his body is telling him, like, whoa dude, you know, you can't do that for five years. And so he's up, he's getting counseling and all that stuff and he was getting help and as he was going through this I couldn't help but just wonder, you know, A, God had provided him with ways to get through it.

But oh man, oh man, you know, we would like to think that we could take that on and be Superman but we can't. Yeah, most people don't have, he must have some real staying power because I was going to say that causes problems if it's for six months. But five years is a long time. Five years ago was the end of 2017.

That's a long time ago. And to think about every day for five years and that trauma. So the point is it's the people around you, the people who love you, who care about you, you put together this plan for long-term care for them. And, you know, I don't know how much detail we really need to get into over, like, how this is going to benefit them because you're still going to have a crisis if you had a stroke or maybe you've developed dementia but it's usually some event around the dementia that creates the crisis. In other words, you know, my mom had it for several years before it really became a serious problem and it was the event of my sister dying who was her primary caregiver that just threw her over the edge and threw the whole family into a crisis. And the real problem, first we needed to grieve my sister and her passing and how she's going to go on but then we needed to start, as soon as we leave town, who's going to look after my mom? And then we started discovering that she really wasn't being that well looked after.

She was still driving and she absolutely shouldn't have been. So enough with my personal story. The why with this whole thing is you put together a plan for what you're going to do, who's going to take care of you, how it's going to be paid for, what assets to use, what insurance is available, and then you give legal, you're giving the legal, you're filling out legal documents that allow your adult children and your spouse to sign for things and to actually go do business on your behalf when you're in a situation where you can't. And if that isn't enough why, I mean we can kind of move on to the next topic but, you know, a lot of people just say stop with the stories, I'm ready, sign me up. Sometimes I do go a little overboard but this is just, families go through this, there's some family going through this right now, I mean today, there's somebody that something happened in this past week, there's several families. And, you know, the brother or sister that's on the ground right where the parent lives or close by, they're there on the ground and then the other ones are deciding whether they're going to come in or not and they're probably fighting over a few things. I mean that's a natural thing that starts happening. And with your friend, I'm just thinking, do they have children or do you know that?

He didn't. Unfortunately it was just him and his wife and, you know, he took care of her and, you know, that's kind of how that goes but, you know, the other big thing is, you know, where? You know, not just, you know, where are you going to get this care if that's part of the deal too, right?

Oh absolutely. You know, we got to go to a break so we want to remind you all that, of course, this show is brought to you by cardinalguide.com and at cardinalguide.com you can find out how to get up with Hans. It's there at his website. You can email him there or you can look at the Seven Worries tab and watch the video on the same subject, the how and why of long-term care along with the show notes and all sorts of information. As well as always, you know, Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement, so when we come back, we got a whole lot more of the how and why of long-term care. We'll be right back.

That's cardinalguide.com. Welcome back to Finishing Well with Certified Financial Planner Hans Scheil and today's show is the why and how of long-term care. And so we're still on the why, that's for sure, Hans. As, you know, essentially our families, you know, we're not a logical necessarily choice but a heart choice to begin with and so, you know, now we got to use our hearts to make sure that we're protecting those people. Oh yeah, and one of the biggest objections that I get over the years of people just trying to shut this conversation down is they're going to say, oh, my kids are going to take care of me. I have good kids, they're going to take care of me and I'm like, I want to look at them, well, no kidding, they are.

Of course they are. And then we can walk through the practicalities of that. I mean, your kids are going to do that, your spouse is still living in a sound mind and sound health, is going to take care of you too because they love you. So we're not, you know, of course they're going to take care of you. What we want to know is that planning, planning this out in advance is going to make that burden bearable for them. Okay, is to have them have a roadmap of how you want to be dealt with and for you have had your say in things and then they can come in and just take over for everybody's well-being. So I want to move on to the next point of the why is that you can choose now where you're going to receive your care because everybody says, oh, man, I'm never going to one of those nursing homes or I'm never going to an assisted living, I just, no way.

And it's kind of like, well, that's basically everybody's point of view. Who wants to go to that place? I mean, actually there are a few people that actually enjoy going there because they have community and they have other people to be with when they've been living alone. But just by and large, when you're talking to people in their 50s and 60s about this subject, that's another way people dismiss it. Well, the reality is most people nowadays that are private pay people, they get their care at home.

Okay, and that's where I intend to get my care and I'm going to go down swinging when they're bringing me to the assisted living. Yeah, I'm with you too, like, wow. And I sure saw that with my dad. Like if I, I've said it many times, but maybe you hadn't heard me say it before that if I had it to do over again, you know, the rehab places and whatever, I realized he could have gotten all that care at home, he'd have been so much happier if he'd never gone to him.

Yeah. And when he was paying for it himself, he'd throw them out, even though he had tons of money to pay for it. He'd throw them out because he wasn't paying 25 bucks an hour. And if he had had a plan, even if he didn't have insurance, he would have been a lot better off just empowering you to hire the people to stay out of that dad. They're going to, this is, you're here at home and I'm going to be here a lot, but they're going to be here when they need to be here. So, so the second bullet on the board is where you, you have a say in where you receive the care and my insurance that I have and your insurance pays either way. I mean, so if I have something that I got to go to the facility, then the insurance pays for that, but if there's a way for me to stay home and get the care I need and my family doesn't get all broken up over this, my insurance pays either way. So, and I, that's my word, is I'm going to go down swing and go into the assisted living.

I want to be, I want to finish the whole deal at home. Okay, the third point. What, what a long-term care plan allows you to do and it creates for you, and it's something you create in your 50s and 60s and early 70s, maybe even your late 70s, is a plan is it allows, it gives you two things that are very significant. Number one is independence. If you talk to people that are, you know, and you survey people, which I do all the time, that are over 80, and they are independent, they want to be, and I think that was true with your dad, it was true with my mom, because they want to maintain their independence.

They want to be making decisions for themselves, they don't want to be a burden on anybody, if they want to go somewhere they want to go, if they want to visit the kids, if they want to shop at this pharmacy, use this doctor, I mean, being independent is something that people value as they age. Okay? The other word is dignity.

Is to be just stuck somewhere or to be at home not getting proper care or driving when you shouldn't be driving and then getting in an accident. All of those things are the opposite of dignity, is that if you have a good plan in place, it allows you to maintain your dignity, and I don't know if we need to say a lot more on that. I think that, and I think it's absolutely wonderful, what a great time to have that discussion, that the whole idea of a plan is, you know, since you have a family or, you know, if it is just you and your spouse, you know, interestingly last night Tammy and I were discussing cremation, like, you know, she was like, really, you want to talk about this? I said, well, if I die tonight, I want you to know. But the idea is to have those discussions that are awkward as they could be, but nonetheless, you know, part of the plan is not doing money, it's just communication between the family so that everybody's on the same page and everybody knows what happens, you know, when the ox goes in the ditch.

Well, yeah. And so the fourth bullet is protect your money. And I put that last, because now we start getting into the how. So what money? And how much is the money? And where's the money? And who are we protecting it for?

And what are we protecting it from? I mean, so now we're going to just launch over into the how, but just at its fundamental level is, if you have resources, if you have money and you saved it up, my guess is, is you really didn't plan to spend your money to pay for your own care. And frankly, this is hard to pull out of people, is spending your own money on care for yourself for millionaires. I mean, I've had that conversation. The more they have, the harder it is to get them to spend 25 bucks an hour. It just is. But those people, if they purchased insurance years ago, they're all for getting the care brought in there and getting some money back out of that insurance company. Of course. And they just are. Oh yeah, boy, yeah, let's get this thing going in.

And so, and it starts at home, care is going to start much earlier and probably should start for a lot of people. I mean, this guy's wife, he's telling you five years, five years he's been able to sleep with one eye open, but it's probably been going on for 10 years before she died. You know, there was probably an extra five years where he was kind of that way. And I'm guessing also that money had something to do with it, is that he just didn't have the resources, or he wasn't willing to part with them, or protecting your money is right in the why. It's also a matter of humility, I think, Hans, to say, which I wish I'd had that kind of humility with my dad to say, you know, I can't do this.

I thought I would lift him up the first time he fell on the floor. You know, and there's all sorts of things that, wow, you know, we got to put down our Superman cape and say, you know, as the caregiver, and say, you know, I can't handle all this on my own, but we don't want to think that of ourselves as well, and that's part of the discussion here. Well, sure it is. And, you know, if you've accumulated assets, and most people, you know, have, as they get up into their 70s and 80s, and sometimes we're talking about a widower or a widower here, where it's a person who's now single and alone, and they've accumulated assets, and they've got them there. And so they've got the money to pay for this, but it also, it just pains them to take that money and spend it on themselves for something that's very necessary. And so there's a way to buy long-term care insurance now, where the money stays on your balance sheet. I mean, we can take a chunk of your IRA and just move it from where it is now to an insurance company.

It's still in an IRA, and that pays a much larger amount for long-term care. And then if you don't use it for long-term care, then it's going to go to your beneficiaries as life insurance. So there's ways, because when you say protect your money, a lot of people say, the way I protect my money is I don't let anybody get anywhere near it. And certainly somebody like me that's going to create an insurance premium. So a lot of people think, well, that's how I protect my money. And I'm thinking the way you're going to protect your money is you're going to take some of it if you have sufficient resources, and you're going to put it into one of these hybrid long-term care policies. And you haven't spent the money. It's just moved from the bank or the investment house or the 401k to the insurance company, but it's still an asset on your balance sheet.

You're still worth that money. And then you put with that a plan for long-term care, and you get it all communicated. So when you have this crisis, your kids know, oh yeah, well, dad took care of that, or mom took care of that. They've got this fund and this insurance policy that's going to pay the bills for home health care and assisted living. So that's about as far as we're going to go with the how today on the show.

We'll talk about hybrid, and there's a bunch of other options too, but I want people to be focused on the why. Yeah, because, you know, again, it's what's going to really matter to your family. And again, when you get down to the fact that, okay, I need to plan this with my family. I need to plan this with somebody that has expertise in my situation. You know, there isn't a cookie cutter approach for the how necessarily, because everybody's situation is so different.

Well, it is. And I know from a lot of personal experience that regardless of your resources, Hans would love to help you with the plan. He has lots of experience in talking to your family.

He has lots of experience in looking at all the different options. And again, that's why we always remind you that the show is brought to you by Cardinal Guide, and you can get those resources at cardinalguide.com, as well as, you know, the Seven Worries tab. Today's show is long-term care, and then Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement.

But unfortunately, we're out of time again, so Hans, great show, and we will talk next week. All right. God bless you.

God bless you. Finishing well is a general discussion and education of the issues facing retirees. cardinalguide.com, Cardinal Advisors, and Hans Shile, CFP, sell insurance.

This show does not offer investment products or investment advice. We hope you enjoyed Finishing Well, brought to you by cardinalguide.com. Visit cardinalguide.com for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, 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.