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Financial Planning for the Special Needs Family

Posted by Larry Jones on Sep 22, 2016 9:30:00 AM

No Greater Love

Jesus said, "There is no greater love than this, that a man lay down his life for his friends."

If you are the parent of a special needs child that statement has YOU all over it.

Every parent agonizes over the health and well-being of their children. The smallest scratch, or illness, is a matter of prayer and attention for us. We know, however, that one day our precious child will grow to be self-sufficient, and our role will change.

The parent of a special needs child may have no such expectations. It may be that care will need to be provided for a lifetime, and maybe even beyond the lifetime of the parent.

Is that legally and financially possible? Yes!

Read More

Topics: special needs

7 Good Reasons to see a Financial Planner

Posted by Larry Jones on Sep 20, 2016 9:30:00 AM

The Rugged Individualist

Americans are known for being able to stand on their own two feet. When I was a boy, my hero was John Wayne. He was the epitomy of the rugged individualist. He always knew the right thing to do, and had the courage to do it. America loved "the Duke" and by and large we wanted to be self-sufficient as well. 

There's nothing wrong with that idea, as long as it's not carried to the nonsensical level. For example, just because Albert Einstein knew how the basic parts of the universe behaved, he probably would still take his car (if he had one?)  to a qualified mechanic. Al knew that there were some things that were outside of his area of expertise. Not only was he great on that E = MC squared thing but he was smart enough to know that he didn't know everything.

When it comes to your financial picture, do you think that you have all of the expertise you need? Do you understand your risk tolerance, and can you make your portfolio meet that tolerance? Many would say "yes." Here's a more difficult question: Are you taking the minimum amount of risk that you need to take to reach your goals? Do you know how to calculate that? Are you familiar with all of the financial solutions that are available to you, and how they work? Do you understand the tax code, and the implications on your nest-egg, as well as your legacy?

In other words, do you know what you don't know?

Read More

Topics: Financial Planning

Are Medicare Supplements a Good Deal?

Posted by Larry Jones on Sep 15, 2016 9:30:00 AM

Are you approaching age 65?

If you are then you are probably discovering a new popularity that would make Tom Cruise jealous! 

The calls and mailings will begin about six months before your 65th birthday. By three months beforehand the interest in you will have reached an all-time high. Every day brings a new mailing, phone call, or even a personal visit from an insurance agent knocking on your door. Everyone wants to congratulate you on reaching this new milestone in your life, and "by the way, can I help you understand your insurance options?"

What's the deal here?

Well, it just so happens that there's a very good reason for why everyone is so interested in you right now: you are about to enter (what may be) a one-time open enrollment period where you cannot be turned down by an insurer for supplemental insurance coverage, to go along with your new Medicare coverage. If you are unhealthy, you'll likely find this attention beneficial, but if you are like most consumers, it will be annoying.

Take heart, as soon as you turn 65 you'll become anonymous again. The marketers will then turn on the next round of new Medicare enrollees.

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Topics: Medicare

Tax Strategies: The Kiddie Tax

Posted by Larry Jones on Sep 13, 2016 9:30:00 AM

A Tax on Kids?!

"Wait a minute, Larry. I just put one child in college, braces on another one, and these happy meals are killing me. Now you're telling me there's a tax on my children?"

Well, not directly, but Uncle Sam may have his eye on them. Why?

One of the more popular tax planning ideas is the shifting of income to a taxpayer who is in a lower tax bracket. Parents generally have a higher income than their kids, and so investment assets are often transferred to young children, through the use of trusts or custodial accounts, thus taking advantage of lower rates.

Is this a good idea? Does this lower the amount of taxes you'll have to pay?

Well..... no.

There's not much that the average taxpayer hasn't thought of that the IRS hasn't also considered. Families are today prevented from shifting large amounts of unearned income to children in order to shield the funds from taxation. The provision that limits this income shifting is known as the kiddie tax.

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Retirement Income vs. Portfolio Growth

Posted by Larry Jones on Sep 8, 2016 9:30:00 AM

Greed can be the enemy of security!

One of the greatest things about helping retirees is resting in the knowledge that I have helped them protect their standard of living. That's right, I said "standard of living," not their portfolio, or their nest-egg. After all, why do you care about your nest-egg? It's probably because you have the good sense to know that you don't want to work at McDonalds after you retire, and that protecting that dream is more important than growing your portfolio.

What?!! Isn't it the same thing?

Not necessarily. Let me give an example.

I met with a potential client once named Mary (not her real name) who was super concerned about her portfolio. She was 66 years old, and not in the best of health. Her income needs were absolutes, in other words, she had financial obligations that would be devastating for her to miss. She had an investment portfolio that was quite sufficient to generate the necessary income she needed, as long as the market behaved in  a friendly manner. My opinion was that she was exposed to way too much risk, and I suggested we set something up that would guarantee that income for her, no matter what the market did. She had the assets to do that. I'll never forget what she said to me: "no, I need higher growth in my portfolio. Where else can I get that but in the market?"

In her mind, she had to take that much risk, in order to get a certain growth rate. But if the market tanks, she's going to be in trouble. This lady had enough assets to guarantee an income for life, with no market risk, AND still have a hefty amount to invest on Wall Street to get some growth. Her greed was putting her in a precarious situation. A repeat of 2008 would seriously curtail this lady's lifestyle.

So....which is more important to you after retirement? Income, or portfolio growth? I'd submit to you that, as you get older, portfolio growth needs to take a backseat to a steady and predictable income for the rest of your life.

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Medicaid and Long-Term Care

Posted by Larry Jones on Sep 6, 2016 9:30:00 AM

The Final Option

In previous posts (Funding Long-Term Care ) we have been discussing the ways to pay for extensive palliative care...i.e. that is, when the patient is no longer improving, but is slowly declining, and is losing functionality, such as the ability to feed one's self, to use the toilet, bathing, etc. These things in themselves are not immediately life threatening, as long as assistance is provided by someone else. This level of care is quite expensive, but the bills must be paid in order for the care to continue. There are three ways to pay for this type of care:

1. Long-term care insurance

2. Self funding

3. Government assistance (Medicaid)

In the past two posts we've considered options 1 and 2. Both of these alternatives require some level of available funds, either in the ability to afford LTC insurance premiums, or to shoulder the costs yourself.

The third option is the last-resort scenario; the use of government assistance in the form of Medicaid.

Read More

Topics: Long Term Care

Self-Funding Long-Term Care

Posted by Larry Jones on Sep 1, 2016 9:30:00 AM

An Offensive Proposition!

A number of years ago I was working with a gentleman in setting up a plan for his long-term care. The plan included a comprehensive LTC policy that would cover his expenses no matter where the care was received, either at home or in an institution. One of my suggestions is to always talk this over with your family before making such a purchase, if for no other reason than to let the kids know that you have the coverage.

Well, in this particular case, when the Dad told his son what he was doing, the young man threw a fit. The client contacted me and said that he needed to cancel the coverage. His words to me were, "my son was really upset that I had gotten that policy. He told me to get rid of it.....that HE would take care of me!" In they eyes of this fellow, the purchase of insurance implied that he wasn't willing to take care of his Dad. Of course that's ridiculous. LTC insurance isn't meant to replace the family as caregivers, it's to help them do a better job of caregiving, and for a longer period of time.

Being a full-time caregiver is very demanding, and you may not be healthy enough yourself to do it. When that happens, outside caregivers will have to be acquired, which can be very expensive. As I mentioned in a previous post ( see LTC Funding Options )  when it comes to paying for palliative care there are basically three options:

1. Long-term care insurance

2. Self funding

3. Government assistance (Medicaid)

In this post we'll look at number two: self funding.

Read More

Topics: Long Term Care

Paying for Long-Term Care

Posted by Larry Jones on Aug 30, 2016 9:30:00 AM

In the blink of an eye

David and his wife Shirley were enjoying their lives together. They'd been married for 53 years, had 3 children and 6 grandchildren, and were active in their church and community. Life was very good, and they had both been blessed beyond measure.

One evening as they were watching TV David noticed that his wife got up to go to the restroom. This wasn't unusual, but something was different this time. She returned, having not found the bathroom, and she seemed quite disoriented. David asked her what was wrong, and what happened next frightened him terribly. When she answered him it came out as gibberish. She couldn't speak! He also noticed that she had wet herself, and the frightened look on her face told him that she too, knew that something was wrong. As quickly as he could he dialed 911.

The prognosis wasn't good. Shirley had had a stroke, which left her unable to walk, there was no mobility of any kind on her left side, there were some cognitive issues, and she couldn't communicate. After several days in the hospital, and two weeks in a rehab unit, he took his beloved wife home.

But his normal life was gone. At first David tried as best he could to take care of her, but his strength and stamina were not up to the task. His children flew in to help, but after a couple of weeks they all had to return home, which wasn't near their parents. He was exhausted, discouraged, and depressed.

What could David do?

He began to bring in home health caregivers. They cost $20 an hour and Shirley needed care around the clock. He was able to keep this up for almost a year, but eventually David knew he'd have to turn Shirley over to someone who could really take care of her. She would have to go to an institution.

In just a few short minutes that night, everything had changed for David and Shirley. Their financial picture had changed too, and not for the better. David was truly worried now about running out of money.

Read More

Topics: Long Term Care

Long-term Care Funding Options

Posted by Larry Jones on Aug 25, 2016 9:30:00 AM

Are you ready?

Ready for what? Ready to live a long life.

"Well, yes, Larry. I am."

Everyone dreams of living a long and productive life. The good news is that, today you most likely will. Advances in healthcare have drastically extended the number of years the average human can expect to live.

A diagnosis of cancer was once a death sentence. Not anymore. With the use of extensive chemotherapy, radiation, and other treatments, many patients continue living for years after a cancer diagnosis. It's the same with strokes. 

These episodes may be quite expensive, however. The average bill for nursing home expenses may exceed $80,000 a year. How would your financial plan withstand such a drawdown? Could you endure a 3-5 year stretch of paying such expenses, which is a typical timeframe?

Does your plan take into account the possibility of an extended long-term care event?

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Children Need to be Involved in Their Parent's Estate Planning

Posted by Larry Jones on Aug 23, 2016 9:30:00 AM

The Civil War

The American Civil War was the bloodiest conflict in our history. Over 600,000 young men made the ultimate sacrifice, and thousands more were maimed for the rest of their lives. It was a gruesome, ugly picture of what happens when our American family can no longer get along. I hope we never see such a thing again.

There is another civil war that I have personally observed. It begins at the death of the parents in a family, and many times separates and maims siblings for the rest of their lives. It's an ugly legacy to leave behind, and almost always could have been completely prevented. 

How?

By taking care to adress financial issues beforehand. I know of folks who have spent years in probate, dealing with courts and attorneys, and it could all have been prevented so easily if only a detailed and well-thought out Will had been prepared.

Most families don't want to leave behind a legacy of hatred and strife amongst their children, but it's a rare family that can escape turmoil when the Patriarchs of the family leave this part of their financial plan undone.

Read More

Topics: Estate Planning

What you don't know can hurt you!

As a fiduciary I am required to always act in your best interests, and as a professional planner, it's my job to be familiar with all types of possible solutions and financial vehicles. In short, I have no interest in selling any particular product or any affiliation with a particular company. I work for my clients.

Are you:

  • concerned that your tax bill is too high?
  • tired of watching your nest egg decline by significant amounts every 5-7 years?
  • wishing you could find more free time?
  • looking for ways to protect yourself against litigation that could destroy all you have worked for?
  • worried that Uncle Sam is going to enjoy your retirement more than you are?

If any of the above describes you and you'd like to get a question answered then just click the button below and we'll be in touch.

Let's Meet!

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