Boats and Grandma

I like messing around in a boat as much as anybody. In fact, my parents always had a boat when I was growing up, and I have many fond memories of water-skiing and cruises. I followed suit and as a boat owner, and found great joy in boating with my own children. One season, after the kids had graduated and we were working through empty nesting, one of us asked, “How many times did we use the boat this year?” After some counting from memory, we still had some fingers left. Next, we figured up what the cost of ownership was. Even though the boat was paid for, we still came up with $3000 in annual costs, not including fuel – and that was 15 years ago. Now we rent for $500 an outing and haven’t hit $3000 for a season yet. The boat? Cash in the bank.

Long-term care insurance in Florida?

So, what does boating have to do with long-term care insurance, or grandma for that matter? You probably already figured this out, if not, here we go. First, you are now grandma, or grandpa – sorry.

We all have under-performing assets in our portfolio, and the reasons are many and varied. There’s that fat CD doing nothing, but it feels so good to have some cash stashed around. Boats, multiple cars, expensive jewelry – you know, the investments that are (or were) fun, but net a negative ROI. Have you looked at that life insurance policy you no longer need? Some of this is just out of habit, or we are maybe under-planning.

You’ve thought of what your life looks like post-retirement, but I bet you don’t see yourself using a walker, or in a nursing home. We don’t like to think about that, so we don’t. Guess what, once you reach age 65, there is a 70% chance you will need long-term care. You don’t ignore a Cat 5 with a 70% chance of making landfall in your area. After all, that could really do some damage, or change your life.

Monthly Long-Term Care Costs in Florida

Well, here’s your hurricane.

  • $1,410 – Adult Day Care
  • $3,810 – Home Health Aide
  • $3,100 – Assisted Living Facility
  • $7,910 – Semi-Private Room, Nursing Home
  • $8,880 – Private Room, Nursing Home
  • Source: US Department of Health and Human Services, Administration on Aging

Long-term care costs in Florida trend above the national average. A private room nursing facility will presently cost over $106,000 per year. This is more like a slow-motion hurricane – so what can we do?

Asset-Based Long-Term Care Insurance

By simply repositioning $100,000 of under-preforming assets into a long-term care contract, you can cover your long-term care costs tomorrow, or when you are 80. Here is a hypothetical example. Of course, you will need to contact Capital Retention for qualification, underwriting and plan options and riders, to find the right fit for your estate.

60-year-old, male, non-smoker, couples discount, 7-year benefit duration, with 5% simple interest inflation benefit option, one-time premium of $100,000:

If you ever need LTC Benefits:

  • Total LTC Benefits, Day 1 – $466,131
  • Total LTC Benefits, Age 80 – $871,462

If you never need LTC Benefits:

  • Return of premium (anytime) – $100,000
  • Or, Tax-free death proceeds to beneficiaries – $115,809

Even if you have enough money to fund your own long-term care insurance, why would you want to? Use an under-performing asset and take care of the hurricane that will hit 70% after age 65.

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