Heath Care in Retirement

Transcript

Mike:

Hey everybody, Michael Reese here, certified financial planner, founder of the prosperity planning system. All about helping you enjoy a prosperous life. At least financially. Today, we are going to talk about what do you do about healthcare expenses later in life? I know it’s kind of a downer topic, but I promise you you’re going to learn a lot here. Make sure you check it out. All right, gang healthcare expenses later in life, we got to figure out what to do about it because here’s the reality. The reality is this, the longer you live, the more you use the healthcare system, right? Cause our bodies break down and Hey, what’s up happening to those healthcare costs over time, you got it. Like boom, going up like crazy. So here we go. We’ve got these escalating prices. They’re going to be a lot higher later on. Like healthcare is going to be crazy expensive later on just when you need it.

Mike:

What are you going to do to protect your hard earned savings from those types of expenses? That’s what we’re going to talk about today. Now, before I dive in, you know what I’m going to say. I say it on every video click, the like button below is give me a thumbs up, right? If you like this video comment, be nice. And of course subscribe. And if you want to talk to me or my team on any of these things that we talk about in this series, there is a link below it’s called talk to mike.com. It’s our online calendar. You click it. You go to the online calendar, you set up a 15 minute introductory call. All right, let’s dive in today’s topic. I know you’re looking at me right now. You’re like, Mike, how are you so excited about, you know, healthcare expenses later in life?

Mike:

I mean, I don’t want to talk about getting sick. I know nobody does, right, but we have to right because we’re adults and you want to have that feeling of comfort. Right? We talk about those three CS control over your finances, competence, and you’re making the right choices and the comfort and peace of mind that you’re going to be okay. No matter what the world throws at you, at least financially, Hey, guess what if that’s what you want? We gotta at least talk about this stuff. This healthcare stuff, right? Healthcare, top concern amongst a lot of people as they enter retirement. Maybe you’re one of them. How do you address it? Well, here’s the deal. Here’s how it works. Right? First, once you hit age 65, then you hit Medicare and Medicare. I got to tell you it’s like the best health insurance program. There is you get a ridiculous amount of coverage for very little premium.

Mike:

I mean, I’m telling you right now, like I think as I’m recording this how Medicare costs you, you know, like 150 bucks a month give or take right, then maybe you get a supplement and a drug plan. And when all is said and done, you might be spending, I don’t know, 250 bucks a month, $300 a month. Something like that. You know, probably not a whole, whole bunch different call it two 50, $300 a month, but it covers everything. And I mean, everything like everything you have like hardly any deductibles. And I mean, it covers everything. My father-in-law, he had like triple bypass surgery and I think it costs him like 50 bucks or something or a hundred bucks we thought, because it’s just ridiculous. How much your protected. I mean, it’s awesome. It is awesome. Now financially, it’s like a big Ponzi scheme, but you know, our government can do.

Mike:

It’s awesome. But there is a big, big area, a huge gap that Medicare does not cover later in life. And this gap that studies tell us this big gap, it happens to 77, zero, 70% of people who hit age 65. So 70% of people that hit the point where they’re covered by Medicare. There’s this huge gap that Medicare doesn’t cover it all. Well, what am I talking about? Talking about the need for long-term care. Now again, I just said long-term care like, Oh no, no, no, no. Mike, I don’t want to talk about it. I know. I know, but Hey, we gotta be adults here. Let’s talk about it. So what is long-term care now? I know what you’re thinking. You’re thinking soon as I say that, what are you thinking your mind? Like my mind, I think about my two grandmothers, right? My two grandmothers, both of them had Alzheimer’s.

Mike:

They were in nursing homes at the end of their life, like seven then eight years, the last two, three years of their lives in both cases. Like they didn’t know anybody. When they finally passed away, it was a blessing. It wasn’t a curse, right? And I’m sure you’re probably like me. You hear that phrase long-term care. And that’s what you think of. And I’ll bet. I’ll bet. You know, multiple people, family members, friends, neighbors, where they blown through a huge portion of their savings, maybe all of their savings trying to pay for care. But here’s something you need to understand. Most long-term care is not delivered in a nursing home. It’s delivered at home or assisted living. And I don’t know about you, but someday, if I’m lucky enough to live long enough where I, my body starts breaking down and I need care, Hey, I don’t want to go to no nursing home.

Mike:

I want to be at home. And the question is Medicare. It doesn’t pay for any of this stuff. So how are you going to pay for it? All right. Three quick ways. There’s three ways you can pay for it. If you, well, I’ll call it for number one. Number one, you can just use your own. You just ignore the whole problem. You just ignore it. It’s not going to happen to me. You know our, or if it does, you know, I’ve got a gun and I know where to use it. I’ve heard that before. Of course, at that point you might have Alzheimer’s you, don’t where he put the gun or the ammo. But anyway, the point is you could just ignore it, right? Be an ostrich, bury your head under the sand. And when the time comes, if you need care, you just got to pay for it out of pocket.

Mike:

And that’s an option, right? An option is do nothing. But if you want to pay attention, you want to transfer some of that risk to an insurance companies. Three ways, three ways you can transfer risk to an insurance company. Number one, traditional long-term care insurance. Hey, let me give you a little secret here. Traditional long-term care insurance insurance companies. They don’t want to write it at all. Cause they lose money on it. They hate losing money. They hate it, right? So that’ll watch out for that. It’s really hard to qualify for your premiums are going up. And once you have it, they keep checking premiums up every year. Not really the direction people are going anymore. Okay. Number two, this is very popular where I’m about to share life insurance. A lot of people are using life insurance contracts because you can use the death benefit in a lot of these contracts also as a long-term care benefit.

Mike:

So imagine this, you go out, you buy $500,000 life insurance contract. You make premiums that are guaranteed to never change over your lifetime. It’s always the same. And then you can, I had a $500,000 death benefit. If you do not need long-term care, that death benefits to your beneficiaries, surviving spouse, family, charity, whoever, but what if you do need long-term care? Well, then you can use that 500,000 to pay for your care. Let’s say you use 200,000 of it. Whereas the other 300,000 go Hey to your beneficiaries. And it’s beautiful. It’s all tax free. We see a lot of people finding that approach to be in a very nice approach. One that they like to use. And then finally, number three. So one traditional long-term care, nobody really uses anymore. Two life insurance with long-term care benefits, very popular. And three, there are different annuities out there by insurance companies where those annuities have long-term care benefits to them.

Mike:

And the longer you hold the annuity, the bigger the benefit gets. So three ways to handle it. You know, traditional life insurance annuities, or what’s the number four way. Yeah. Bury your head in the sand. Ignore the problem and just say I’ll pay yeah. Out of pocket right. There you go. Now what’s right for you. Depends on your situation. You need to think that through carefully, if you want to talk to us, if you say, Hey Mike, can you help me figure this out? Just click on the link below. It says talk to mike.com. That’s a little link that takes you to our online calendar. 15 minute phone call, introductory call. We will make sure that you talk to me or one of the team that can help you out with that. But either way, I hope you found this informative for member like us. Right? Subscribe, leave me a nice comment and make sure you share this with your friends. If you found it helpful. Talk to again on our next video.

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