Are You Protected If You Need Long Term Care?
Currently going through Q3 earnings which are showing certain sectors continuing to grow very well (Energy, Industrials, Discretionary stocks (non-internet)… while Tech earnings are pulling back modestly and Internet/E-commerce stocks are having a sharp pullback (Internet Retail, Communication).
Big picture, overall earnings are still holding up, blustered by certain sectors which is why it’s important to have sector diversification within the investment strategies (Even our Growth strategy has industrial and energy exposure, not just Tech stocks).
Fed announced this week another .75 basis point rate hike and another in the middle of December… Any deviation from that (either higher or lower) will likely cause a large market move in the short term.
The likely outcome is to be at least a Republican-led house which (strangely enough) historically has been one of the best performers for stock.
An interesting statistic for stocks is that dating back to 1946 there has never been a negative market return in the following 12-month period following a midterm election.
First, equity valuation multiples have come down substantially, meaning that stocks are currently trading at a 21% discount to Morningstar’s assessment of fair value. This is the largest discount Morningstar has observed since 2011 and represents a meaningful decline from the 2021 peak, where stocks were trading at a 6% premium on average to fair value. When stocks drop 20% or more, the average cumulative forward market return has been: 1 year 22%; 3 years 41%; 5 years 72%. This isn’t the time to panic.
Active managers tend to outperform in down markets as they look to reduce risk in the portfolio and add volatility management. This year, 57% of large-cap managers are beating their respective benchmarks – at United, that number is 100% across our active stock strategies. In addition, our team is actively harvesting both stock and bond losses to help reduce our clients’ tax burdens.
Silver and Gold
10-15% of net worth in Gold and Silver provides wealth insurance
Are You Covered? Long Term Car options with Sohil Patel, Nationwide Regional Representative
First, before we talk about Long Term Care planning it is important to be sure your retirement income plan is in place. While needing some type of Long Term Care is likely, we know you will need retirement income. This is where all areas of your financial life must be coordinated and working together. It’s not about buying a product, it’s about creating a plan.
What is Long Term Care?
Long Term Care is a variety of supports and services designed to help people live as independently and safely as possible when they can no longer do so on their own. It also represents the additional stream of income that will be needed to pay for needed services.
The trend is home health care, more long-term care services are provided for in homes than in any type of long-term care facility.
What Pays for Long-Term Care?
Traditional Healthcare – When it comes to paying for long-term care, health insurance and medicare will only cover services where you are recovering. For example, if you need care while you are recovering from a knee replacement, traditional healthcare will cover it.
Lifestyle – Cost is the potential loss of health, well-being, or earning ability of a spouse or other loved one.
Income and Assets – Dollar-for-dollar expenditure of your income and assets.
Insurance – Cost-efficient leveraged benefit amount
How do long-term care plans pay?
Most Long-Term care plans will pay benefits when you need assistance with at least two activities of daily living or if you have a cognitive impairment.
The benefits can either be paid via reimbursement, which means bills have to be submitted to the company and then they will pay for what they deem as covered services or as an indemnity or cash indemnity plan, the difference between the two is whether you can use informal caregivers or not.
Estate Planning Spotlight- Legal protections and long-term care
There is no way to protect all of your assets from being spent on long-term care with legal planning, plus doing so would greatly limit your choices for where you receive care. However, there are some planning tools available that allow you to protect a family farm or other property as long as it is done ahead of time.
Talk Talk – Paying for Long-Term Care Tax-Free
When the time comes that you need long-term care, it is important to coordinate where you are taking money from to pay for the care with your tax and financial advisors. Even if you have an LTC rider on your life policy, you might be better off paying for care from your IRAs as the percent of your income that is spent on medical care could be enough to allow all medical costs to be tax deductible, in essence allowing for tax-free withdrawal of your IRA.
We serve clients in Mineral Point WI, Dodgeville WI, Platteville WI, Lancaster WI, Fennimore WI, Boscobel WI, Richland Center WI, Muscoda WI, Spring Green WI, Mazomanie WI, Sauk City WI, Middleton WI, Madison WI, Fitchburg WI, Verona WI, Mount Horeb WI, Barneveld WI, New Glarus WI, Monroe WI, Belleville WI, Oregon WI, Stoughton WI, Darlington WI, Cuba City WI, Hazel Green WI, Belmont WI, Dubuque IA, Freeport IL
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