In this episode, Alex and Wade discuss options for funding long-term care expenses. They start by clarifying that Medicare is not a long-term care funding option, as it is for health-related issues. The four main funding options they cover are self-funding, Medicaid, traditional long-term care insurance, and hybrid policies. They focus on self-funding in this episode and discuss factors to consider when choosing a funding strategy, such as age, health, family health history, wealth levels, legacy objectives, risk tolerance, and the costs and benefits of different insurance policies. They also emphasize the importance of involving family members in the long-term care plan and considering the fungibility of assets. The episode concludes with a discussion on the impact of long-term care expenditures on one’s standard of living and potential beneficiaries. This conversation explores the concept of self-funding for long-term care and the various factors to consider when making this decision. The chapters cover topics such as volatility and spending flexibility, the impact on inheritance and flexibility, insurance for long-term care, estimating reserves for self-funding, the probability of long-term care events, the ideal persona for self-funding, target date funds for long-term care, using QLAC as a planning tool, self-funding with annuities, spending guilt and behavior change, unpaid informal caregivers, and self-funding with annuities. Listen now to learn more!

Takeaways

• Medicare is not a long-term care funding option; it is for health-related issues.
• The four main funding options for long-term care expenses are self-funding, Medicaid, traditional long-term care insurance, and hybrid policies.
• Factors to consider when choosing a funding strategy include age, health, family health history, wealth levels, legacy objectives, risk tolerance, and the costs and benefits of different insurance policies.
• Involving family members in the long-term care plan is important to avoid misunderstandings and ensure support.
• Money is fungible, and assets can be used to fund long-term care expenses, including the house, investment portfolio, and life insurance cash value.
• Consider the impact of long-term care expenditures on your standard of living and potential beneficiaries.

Chapters

00:00 Introduction and Overview

02:58 Medicare and Long-Term Care

06:57 Costs and Considerations

09:59 Choosing a Funding Strategy

16:12 Involving Family Members

21:54 Funding Sources for Self-Funding

23:05 Impact on Standard of Living and Beneficiaries

23:19 Volatility and Spending Flexibility

24:15 Impact on Inheritance and Flexibility

25:45 Insurance for Long-Term Care

26:33 Estimating Reserves for Self-Funding

27:05 Probability of Long-Term Care Events

27:36 Ideal Persona for Self-Funding

28:33 Target Date Fund for Long-Term Care

29:23 QLAC as a Planning Tool

30:12 Self-Funding with Annuities

32:09 Spending Guilt and Behavior Change

36:18 Unpaid Informal Caregivers

41:02 Self-Funding with Annuities

Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ 

This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips