When should you start planning for Long Term Care? - Expert Edition Episode 8
Have you created a plan for when you eventually need assistance with everyday activities and are unable to care for yourself for a long period of time?
It's best to start considering long term care insurance when you're relatively young and healthy, as this will help you secure a lower premium rate. Generally, the younger and healthier you are, the more cost-effective and suitable the policy is likely to be.
I was always under the assumption that I should purchase a policy somewhere in the age range of my mid-50s to mid-60s but Dr. Jay burst my bubble. He also got me thinking about what I would do about my father if he needed this assistance.
Looks like I’ll be long term care insurance shopping. I’ll start with this link provded by Dr. Jay.
And because 2022 was a good year for Dr. Jay he is offering limited spots to ask him your financial questions FOR FREE. Act now because there are only a few spots and they are first come first serve.
About our expert:
Dr. Jay Zigmont, CFP®, and his wife are Childfree and live in Water Valley, MS. He has a Ph.D. in Adult Learning from the University of Connecticut and is a CERTIFIED FINANCIAL PLANNER™ and Childfree Wealth Specialist. He is the founder of Childfree Wealth, a life and financial planning firm specializing in helping Childfree Individuals and the author of “Portraits of Childfree Wealth”.
He has been featured in Fortune, Forbes, MarketWatch, Wall Street Journal, New York Times, Business Insider, CNBC, and many other publications.
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TRANSCRIPT:
[00:00:00] Naseema: Okay. Welcome back. My Financially Intentional People. Super Juice to have Dr. Jay, join us again, our C F P expert for the podcast and today we are gonna talk. Who is gonna take care of you when you get older? Hey, Dr. Jay.
[00:00:20] Dr. Jay: Hey, Nama. You know, like, you just wanna like, talk about the, the rough question of life, you know, like, What am I gonna do when I'm 90 years old and can't wipe my own butt?
You know, ,
[00:00:29] Naseema: we are gonna talk specifically about long-term care planning and what that looks like, who should get it, when you should get it, and all of those fun things and why you need it, , because we know that that's one of the most expensive times of your life, and so we have to start planning for it now.
[00:00:52] Dr. Jay: Absolutely. You know, lemme give you a stat that'll probably scare you a little bit, but That's okay. So, the, the, the US census, you know, and I work mostly with child free childless folks, the US census found that for childless folks over the age of 55, 2 0.5% get any financial support from their family.
Like, that's like nobody. But here's the thing, the same, you're, you're a parent in the same 55 and older, 1.5% of parents got any,
You actually got less support than we did. So everybody get like kinda the child free folks. We always get the question, who's gonna take care of you? Blah, blah, blah, blah, blah. The truth is, nobody's taking care of any of us. Like, you know, having a kid doesn't automatically like take care of your long-term care.
Does that make sense?
[00:01:41] Naseema: Yeah, I think it's like one of those things that you assume that you're gonna take care of your kids and then eventually they'll turn around and take care of you. But obviously that assumption has been proven wrong statistically.
[00:01:55] Dr. Jay: Look, you work in healthcare. Mm-hmm. if, if you've ever worked at a nursing facility, by the way, it's a, it's a, it's a rough life.
You know? I worked as a paramedic. It's, it's tough if you actually ask them, how often did the family come. Oh, it's sad. I mean, it is Christmas and Thanksgiving and you know, if they're sick. You know, I mean, it, it's not, and I don't mean to be a bummer, but it's just like the reality check.
[00:02:18] Naseema: I can't even imagine that.
I mean, I have, my grandfather's turning not 95 this year. I was just at his house. Like we're always there. Like I can't imagine him like being alone in one of those facilities. And I've never. Fortunately, worked in those facilities, but I have been in the facilities in different capacities and not a great experience.
Not somewhere where I would actually put my grandfather. I would opt for more in-home care. Well,
[00:02:45] Dr. Jay: so by the way, I think we all would rather be taken care of in our house. Like seriously, let's just, let's say there's a interesting stat in real estate. Single level houses are selling better than two level houses now because people are getting older and don't want the stairs.
Makes sense. You know, I've got stairs here and as I get older, I don't wanna do that. But here's the thing, in-home care is expensive, nursing home care is expensive. And who's gonna pay for it and who's gonna do it? And you know, also we get into this other question like, I don't know about you, but I don't wanna be a burden on anyone.
You know, like, I don't want my family members wiping my butt, like just, just calling it out. I mean, and I think the challenge is, Everybody kinda looks at long-term care and it's, and it's stupidly expensive. So to give you an idea, we're here in 2023. The national average is about $108,000 a year for nursing home care and Naima for you.
That's 3.7 years as a woman. So I mean, we're talking $400,000. In today's dollars. Now we know you're, you know, 30 years old right now. So that's 60 years from now when you're in a nursing home is gonna be a whole lot more expensive, you know? And, and that's the hard part is the math just gets, like, nursing homes are increasing long-term care costs increasing by 5% every year, compound interest.
So it's gonna double and triple in that time. And, and I don't know, I mean, what's your plan to Seema? I mean, who's gonna take care of you when you.
[00:04:20] Naseema: I am not depending on my kids. That is for sure. I actually, this is something that I actually sat down with my planner this year and created a plan around preliminarily. I do plan on getting a long-term care. Specific policy in my 50, so I'm 41, but what I'm doing right now is I put a rider on one of my life insurance policies so that it covers a long-term care portion.
And right now, because I'm young and I'm healthy, it is relatively inexpensive though. as a part of like my whole like life insurance planning strategy can kind of be cost prohibitive for people, but for me, I made it a priority just like anything else in my budget. So. Just like numb, roughly numbers speaking.
Just that that part of that rider is about, I wanna say like another additional $150 a month that I'm paying to make sure that I have coverage. And that's kind of like a safeguard safety net kind of coverage in the backend that's gonna cover all of my expenses on top of whatever policy that I implement in my fifties.
Does that sound right to you?
[00:05:32] Dr. Jay: You're in the right ballpark. I'm gonna challenge. Mm-hmm. your numbers little. So I've done the math and, and we'll include a link in here to actual, like, example policies. I tend not to use the life insurance long-term care combos because it doesn't do e either perfectly.
You know, it's kinda like a sport, you know, it's a spoon and a fork together doesn't, it's not perfect, not bad, but just not perfect. Um, But the actual math, as far as I see, the sweet spot of if you're gonna buy a long-term care policy is actually about mid forties. And let me explain what happens. So if you're gonna buy a long-term care policy, two things are going on.
One, your parent's health impacts your policy cost. So for example, . If one of your parents has a cognitive decline, dementia, Alzheimer's, something like that, your policy goes up giant. If both of your parents get diagnosed with dementia or Alzheimer's, you will not be able to get long-term care insurance or standard long-term care insurance.
There's some gimmicky stuff you might be able to get, but like essentially like no standard policy, so your parents' health becomes an issue and then your health becomes an issue and each year you get older. The cost of the policy. . So it's a balancing act. So keep in mind long-term care insurance covers in-home assisted living and nursing home.
And usually what it is like you set up per day, so like, oh, $200 a day or whatever it's gonna cover, it'll cover each of those. The problem is that's expensive. You know, we're talking about covering hundreds of thousands of dollars of. . Well, the insurance company's taken a bet that you're not gonna ne use the insurance.
Now the number is about two-thirds of people in the US will end up in some type of long-term care. So I always kind of joke people, are you feeling lucky? You know, like, can you pick that now? And if you're in a couple, it becomes more important because if one of the members of the couple needs long-term care, it can eat the, you know, retirement funds of the other one.
you know, so my wife needs to go in, she's in there four years. I gotta pay. Forget it. I mean, I, you know, I'm not paying off because of course I'm gonna spend every money I got on my wife, and now I'm gonna be eating ramen noodles for a living, you know, forever. I mean, it's just, it, it's, it's one of those, you have to protect yourself.
But why'd you say, Hey, I'm gonna wait till my fifties.
[00:07:57] Naseema: I just thought that that was the magic number. Like I have always heard that in the financial planning community, that long-term care insurance is something that you consider in your fifties, and I've never been told otherwise. That's
[00:08:08] Dr. Jay: because people don't wanna think about it earlier.
Oh, I actually have clients in their thirties getting long-term care policies. Mm-hmm. Okay. Now the math on the thirties, I don't know, I don't love it, but 45 tends to be the, the, the sweet spot. And there's a couple insur. There's one insurance that I use, by the way, I don't sell insurance. You know, I just, you know, I'm a advice only, fee only.
So when I say I use, I, you know, these are the ones I like, but they actually offer what's called a 10 pay. So you pay 10 years and they're done. Hmm. Or a single pay, you pay it off upfront now. The single pay upfronts. Stupid expensive. It's actually saves you money. But I don't have a couple hundred thousand dollars extra to put there
[00:08:47] Naseema: So that's the ballpark we talking about. We not talking about a couple thousand. We talking about, we talking about some racks. Cause we going have to put up in order to get, but here's
[00:08:55] Dr. Jay: the difference. You're paying the 1500 bucks or so a year on that life insurance for some coverage for the rest of your life.
Mm-hmm. , do the math on it. You're paying more than that. Right. And it's gonna go up over. . Mm-hmm. . Now before I go even that far, I gotta talk about some weird stuff. So you're in California. California is actually looking at whether or not they should put a state plan that copies Washington for long-term care.
Have you seen this yet? I
[00:09:21] Naseema: think I heard about it in the, in the way that it looked almost like. The care. It was, it was negligible, I should say. Yep.
[00:09:32] Dr. Jay: Yeah. As of today Washington is the only one that has in place, but California, Pennsylvania, New York, and a couple other states are all like poking around at California's trying to get something together in the next year or two is what they're looking at.
And they're all copying Washington. So, let me explain this. So. About two-thirds of long-term care is actually paid by Medicaid. Now, by the way, keep in mind Medicaid means you broke. Like you have no money, you have no assets. And as a, as a medic, I knew a Medicaid facility cuz my feet would stick to the floor and like literally, like it's disgusting.
I'm, I'm, I'm not trying to judge, it's just, it was disgusting. You know, you're talking about nursing homes where it's four-door room and you know, like, Oh, it's not a good r great quality life. So the states are creating these programs to save the Medicaid. So lemme talk about Washington's program. So let's say Naimo moves to Washington she would've to pay half of 1%, 0.51% of her income for the rest of her life as long as she lives in Washington for a minimum of 10 years.
And then you get one year of coverage for a hundred dollars. Now, mind you, a hundred dollars a day buys you nothing in a nursing home, okay? I, I don't want people to get long-term insurance unless they get at least like two 50 a day of coverage. So you're giving up half of 1% of your income for life in order get a hundred bucks coverage.
What do you think about that?
[00:10:54] Naseema: I don't know what a hundred bucks a day buys. I can paid a hundred dollars an hour as a nurse. So the math ain't nothing to me. No,
[00:11:02] Dr. Jay: it isn't. And what happens is people go like, I've got my long-term care covered. And I'm like, no, you got screwed. Like there's, there's nowhere in between. And the way Washington did it, and California will probably do the same in other states, is if you had your own long-term care policy in place.
you could get out of paying the tax. So, you know, let, let's play with this for a second. I gotta grab my handy Dan Calculator here.
[00:11:32] Naseema: And do you have numbers on those, those kind of premiums for the long-term care insurance starting at around 45 that you typically see? Yep. Okay,
[00:11:40] Dr. Jay: perfect. So look at it this way.
All right? When you start in that, in general, people say, Long-term care insurance is, is affordable for people making a who have a bottle of half a million dollar net worth to about 3 million. If you have less than half a million dollars, you just don't have enough money to pay for a policy. Just it is, and you're gonna rely on Medicaid.
If you have more than 3 million, you probably gonna pay for it out pocket. So it's like this sweet spot. Now, by the way, you know a large part of people that are listening to this are gonna be in that sweet spot. Somebody what in their life. Getting to a million dollars is not hard in the US if you work.
and that's where you wanna protect that money. And what happens is when these state plans come across, so Washington did theirs, a whole bunch of people are like, oh, I wanna opt out and get long-term care insurance policy. And then all the long-term care companies are like, yeah, we're not taking anybody else because we've been overwhelmed by thousands of thousands of people wanting.
So, you know, let me give you some examples. Lemme grab my insurance examples. So, Well, let's say Naima. So she's age 40 and has a four year benefit period. So four year, 3.7 is on average. So covering a little more than that sounds good. And assumes two 50 a day benefit, 3% the compound interest. So by the way, these policies, you have to a compound interest writer, so it grows over time.
There's $250 of coverage right now versus when you're 92 different things. So to get, if you wanna get like a real policy. , it's about $4,000, 4,200 a year. So you're paying $1,500 a year right now for how much coverage?
[00:13:20] Naseema: Like I said, it is like, it's not a lot of coverage. It's like kind of like a safeguard cover, a safety net to catch what I is not covered by policy.
Later on. .
[00:13:31] Dr. Jay: Yeah. So, so it's, it's a feel good policy. Like it feels like you got something done but didn't really get right. Mm-hmm. So 4,200 bucks Now, by the way, don't quote that exact cause it depends on your health and life, you know? Right, exactly. Yeah. You're a smoker. It goes up or whatever, you know, but it gets kind of weird.
So women pay higher premiums than men. Now, this is not just like a pink tax, this is. What happens is statistically women will use more of it. That's why you're being charged more. But the secret is if you're in a couple, you can share the policy. Like I get three years and you get three years. But together we can like take some of each other's years if we don't use 'em.
And they give discounts for couples cuz they assume one part of the couple will take care of the other one if they're getting into a long-term care situation. Yeah. So. So there is. Like balancing act. Now here's the interesting one for you. Since I have the number right now at age 40, it's $4,200. At age 50 it'd be $5,000 a month a year.
So it goes up 800 bucks a year and you're going, well, but I paid extra for, so what happens is if you do like a 10 pay where you can lock it in or other things, you are starting at a lower. and you'll end at a lower rate. You're paying for more years, but you have coverage. I think the challenge for long-term care is people go, well, I'll put a hundred thousand dollars aside in a bank account and that'll take care of my long-term care.
Maybe I'll take care of one year. But the question is, when are you going into long-term care? The great example is one of my friends, his in high school, his mom in early forties had early onset Alzheimer's, and then she was in a facility for decades. I, I can't even imagine the, the bill that was run up on that.
So it depends on when you go in, you know, if you can tell me what year you're gonna go in and for how long I can do the math and say, put this item, this money aside. I mean, what are you thinking, Naima?
[00:15:38] Naseema: sounds like when people ask me when the baby is born, it's gonna be born, like, what time is the baby gonna be born?
If I could tell you that I would be a very rich person. like nobody, nobody knows these things. There's no way to predict these things. Even with family history, there's still no way to predict these things. So all we can do is plan
[00:16:00] Dr. Jay: well, and it's not only like, I mean, I, I, I think someone I have to explain, , your healthcare insurance you have right now does not cover long-term care, right?
It'll cover a little rehab for, you know, month or two or something. So like if you had a stroke right now and you would need rehab for a year, you'd be paying that bill and you might be better at the end, but you, you'd be paying a bill also, Medicare does not pay for long-term care. Again, 90 to a hundred days they'll do rehab and then, You are on your own.
And I think the hard part is that's the time when you need the help the most, but you're hurt, so you really can't figure out ways to do it. I mean, it's not like a fancy like, oh, I'm gonna be in a nursing home in a year, so let me change my finances. You know? It's like either you plan now or you're on a luck,
[00:16:53] Naseema: but like, what about people who spend down money?
To get to medic to get Medicaid coverage for long-term care. Have you seen like, I don't know. I was talking about that yesterday with my estate planning attorney and first of all, the facilities that you have access to, and then second of all, Doesn't the state come after you for the funds? Okay.
[00:17:19] Dr. Jay: Mm-hmm. . So I got people that go like, oh, I wanna be on Medicaid, cuz that's gonna cover it. Well, two things, and by the way you may be looking at the same thing for your parents or, you know, family members of others. Before you decide you wanna use Medicaid, go look at Medicaid facilities. Just look at the care you're getting.
You know, my grandmother ended up in nursing home for quite a while, and we paid for a private room for her. It was not all her money. I mean, she, we, we spent every penny she had left, but it was her money. But you know what, she got great. and you would, you know, you would hope, oh, money doesn't matter in the town.
Quality care. That's just like a dream. All right, so go look at it. Now, Medicaid has a, what's called a five year lookback. So if you're like, oh, I'm gonna give my money to my kids, or my na, you know, my wife, or whatever, and then I'll qualify for Medicaid. If you do it within five years, Medicaid then goes, Nope, you're not qualifying for Medicaid for as long as that money's been going hour or spend down, or weird math.
And California's actually looking to move to seven years on that. And what happens is then we get into issues. The other one is, how about if I'm a couple, well, what, what are our assets together and what, what protects mine diverse? There's actually a concept, I was just working on this for somebody of a Medicaid divorce.
Like, I wanna take a, get a divorce so that my, my spouse. I'm like, wow, that's like a bad option. Like, just like, I'm like, you know, say my wife. Yep. Bye. You're on your own. Good luck. You know, like it's just so like saying, oh, well Medicaid's gonna do this. I think the hard part is you don't know what your situation is and how it's gonna impact your family.
If you're looking to say, Hey, I wanna like give something to the next generat. , you know, they're talking about baby boomers, they're gonna like give a whole bunch to their kids, you know, there's transfer of wealth. No they aren't. They're gonna be paying for nursing homes, you know?
Does that make sense?
[00:19:13] Naseema: Yeah, it does. In that same vein we're talking about like making. Creating a trust, like a long-term care trust as an option, as a way to protect money. Once you go into those, into like, like long-term care. So have you worked with people who have had long-term care trusts?
[00:19:36] Dr. Jay: Yeah, so there is a whole world of these estate planning attorneys. Their job is to like lock things up so that they can't be countered in different things. . It works as long as you're like thinking a decade out at least. But most people are like, oh, I'm starting to feel ill now I'm gonna n n no, you're too late.
Okay. And trusts are kind of weird attorneys like selling them because they make money. I'm not an attorney, so I don't always say a trust Makes sense. A trust is useful for protecting your money or controlling it after death. With my child-free clients. Trust is almost never used because they don't really care about where their money goes after death.
They're gonna donate to somebody or whatever. The trust for estate planning, what happens then is a lot of people do the paperwork, but then they don't actually put the trust in the place. So you need to create the trust. You need to fund the trust, you need to have a trustee, you have a trust tax reporter.
There's a whole bunch of paperwork. And like, I swear, like the lawyers sell trust and people go, oh, I'm doing it fancy. I gotta trust, like, you know, let. And it looks fancy, but it doesn't necessarily always get to what you expected. You know, trust is really another 5,000 bucks that the attorney can bill for.
You know, it's like asking the barber if you, if you need a haircut, the answer is yes. You know, just, I think it's a balancing act. If you're gonna do something like that, you need to do it way in advance. That depends on how much money you have. Yeah. So I could do all these fancy trust. To protect my million dollar asset, or I can just buy a long-term care policy and then do whatever I want with the rest of my money.
You know what? I'm not saying one or the other, but it's like those are the debates. The other way to some people do it is they take a certain amount of money. Then we do a math equation, and it's a guesstimate of like, if I invest invested and this outgrows over time, and you self-fund your long-term care.
The caution with this is you have to put in an account that you will never touch. Like, oh, well I'm having trouble making my bills Uhuh. You don't touch that long-term care. And most people are not great at that. You know, like, we don't have that, you know, that, just that self-determination say, yeah, I'm not gonna touch my nest egg there.
And, and I don't know when people start talking about this stuff, I usually. I have two times people, people come to me and ask, you know, they're worried about it and they wanna find the answer. Cool. The other ones are like, their eyes just start cl lazing over. They're like, this is too overwhelming. I just can't even think about it.
And it's like the same. People say, well, I can't get a will because I'm worried I'm gonna die. Well, the only reason to not get a will is if you hate your family. You know, like you need a plan for all this stuff. So I think. The hard part of this is just like having a plan, and my goal is by your mid forties to decide am I gonna pay for myself long-term care or Medicaid?
And then following that through the other part of this, and this is some we'll probably do a separate episode, is to make sure you have all paperwork that matches your will, your living will, all that. But you need to have an answer. Does that make sense?
[00:22:41] Naseema: Yeah, it does. And when you're talking about like the glazing over, like that was exactly the, the thing that came to mind is those are the same people that don't put their estate plan in, in place and all of those kind of things.
And these are things that we need to think about. And as you're saying, sooner than later, cuz I was even like, okay, I still have some time, but now my, my 10 year timeline kind of con got condensed talent into five years. But still, I mean, it's important to know. That thing. These are, it'll be cost effective at that age because that was what I was always told.
It's not gonna be very cost effective earlier on to get those policies. But it's super important to look at these things. And I think what ends up happening is people think of it as something that, This is something that rich people do. This is not something that I need to do because I'm not gonna have a lot of money anyway, and I'll kind of fall into that Medicaid category.
And like you said, actually most people fall in between that 500,000 to 3 million. And it's not hard to get to, especially if you have been doing some things intentionally to set up your wealth. And so. These are conversations that need to be had but aren't had often enough. And aren't had in a way that seems approachable for most people because most people are just like, that's just too over the, over my head.
And so I like the way that she presented it cuz it makes it like, okay. This, you need this, you probably need to start planning for it now, and this is what it looks like. And either you're gonna set aside a whole bunch of cash or you're gonna get your long-term care insurance policy in place asap.
[00:24:23] Dr. Jay: Yep.
Now, let me give you one more spin on this because most or a lot of Americans are in this where they're taking care of their parents. So what if your parents don't have a plan for long-term care? And I always, when I talk about one person's long-term care, I always talk about their parents at the same time.
Cause I actually believe your parents' decisions on finances may have more impact on your finances than your own decisions. , you know, so like, for example, I always tell people their parents set good boundaries, whatever they want. And for me and my wife, we said, nobody lives with us. That's just a boundary, you know, we'll pay for other things, but like, we just can't, nobody lives with us.
And, and that might sound harsh, but that's just our rule. But when it comes to long-term care, well, the question is, well now are you gonna help pay fair? Are you gonna let them go on Medicaid? Are you gonna let them in a crappy care situation? Are you going to pay for somebody to take care of from home?
What are you gonna do? And one of the interesting things I've actually worked with people on is either putting aside money or taking out a long-term care policy on your parents, which gets expensive. I'm not, I'm not saying it's cheap, but it's cheaper than you paying for them to get. Or doing that. And, and I think people like they can picture their parents going into long-term care cause like they're closer to it.
And I've actually had people, they get it all set for their parents, but not for themselves. I'm like, what? You gotta do both. Like seriously, you just said it's an issue for them. It'll be an issue for they, but you need to have a plan for that. And, and I don't know, I mean, Naima, you gonna take care of your family members or your parents or.
I
[00:25:59] Naseema: definitely was just thinking that like, if as if something happens to my dad, I'm gonna have to take care of him. And so I've literally just like writing a note to myself, like, look up long-term care policies for my dad and I think he has one, but I need to look into it. And so yeah, cuz it, it will fall on me and that could definitely impact my finances and I'd rather plan for that now than later.
[00:26:24] Dr. Jay: So interestingly enough, there, there were some really nice long-term care policies like came out decades ago. Let's just, you know, pre os and your parents may be on one of those. Like, I, I found somewhere, I'm like, wow, this is amazing what they're getting for the coverage you might wanna take over paying for that.
because that policy, if they're, if they're living on social security, whatever, cutting it, you know, that'll be one of those to cut. And what, here's how it works with long-term care. Just just so you know. You miss a payment or two, you're done. Like, like they are looking for any excuse to kick you off, especially these old policies.
They're a bunch of CalPERS and a few others. Like weird. Cal says you're in California. Like there's specific like state
[00:27:04] Naseema: policy. I'm sure that's the one my dad has. Yeah, he's a state employee. I mean a city employee. Yeah, so, or he just retired last year. So yeah, city employee, like all those things. So I'm sure that's the plan he has.
So
[00:27:15] Dr. Jay: a great example is the California plan. I just helped a couple people with this recently. The state. Because of cost and all that fun stuff, they were like, okay, either we're gonna raise your, your rate or lower your coverage. Well, I looked at the coverage and the original plan was certain amount per day.
I forget what that was. It was high for unlimited for the rest of your life, like forever. I was like, wow. But the odds of you using, you know, 40 years of care is low. But they're like, oh, well you could change it to a six year coverage, which is still a long time and maintain the same premium. Or like, so there's these debates, but what happens is people go, well, I'm living paycheck to paycheck.
I'll just cut this policy out. , and as soon as that's done, there is no going back. And by the way, I, I can see Nasima writing me an email after, so I checked with my dad and he didn't pay the policy and I'm gonna kill him. Like, you know, like, it, it is one of those I, for people that have long-term care policies, especially the, the old legacy ones.
my rule is you pay that policy before you pay your groceries or anything else. Like, yeah, I mean, like, that's like the first bill that gets paid every month. And people go, well, that's a little extreme. Like, no, it's not. This is gonna be your end of life. You know, give you an idea, like the in-home care for many of 'em includes like housekeeping services, cooking for you, you know, like cleaning up, you know, as long as you have like what they.
Two activities of daily living that you have problems with, you know, bathing, feeding yourself, whatever. They'll actually come in and do a whole bunch of stuff. They'll give you like a Asian care manager, somebody that can help you out. I mean, they, they cover great if you have it. If you let it go, you're on your own.
[00:28:58] Naseema: Yep. I'm gonna check with my dad. I'm gonna be pretty ticked off cuz he's kind of one of those people just, I don't need it. Just throw me in a l in a place. And, you know, he's one of those kind of miserly kind of people, so I can see that happening and I'm gonna check with him today. Oh my goodness. So,
[00:29:18] Dr. Jay: By the way, I, I could see this happening, like the scene was gonna like, Dr.
Jay told me this and hi . So one more fun. One or less fun. I don't know. I, one. Okay. So interestingly enough, when I talk to people, long-term care, a large percentage, especially in the child-free community are going with the opt out option. I'm not gonna get old. I'm gonna, you know, go to Oregon or Switzerland to the suicide pods and call my time at a certain place.
And we can have a separate debate on the ethics and, you know, whether you believe in euthanasia and all the other stuff. But if that is truly your plan, the hard part is you can't change your answer. You know? Like if you're like, yep, I'm gonna be opting out, like, you know, and by the way, I don't blame you.
You know, you wanna be 80 and run off into the sunset and you know, never be seen again. But you can't be 80 and them like, oh yeah, that was a great plan when I was 40, but now I need like, yeah. So if you're gonna choose, you know, I have people like, well, I'm just gonna, whatever. And a lot of 'em believe it.
Cool. As long as you're a hundred percent. If there's any doubt you need a financial plan.
[00:30:21] Naseema: But most people cannot even decide what they're going to eat for dinner or how can they make a decision like that and feel so confident. I just, I mean, like working in healthcare and seeing people have to make.
Just basic healthcare decision. And I work in a place where people are mostly healthy, but like the decision where people are like if, if I'm gonna get an epidural or not. And they're so gung ho on having a natural delivery until the time comes and they're just like, give me my epidural.
You know? And I'm just. I'm sorry, I, I put everything in that lens because that's what I see as far as like people making decisions and I cannot imagine somebody making an end of life decision and being so confident about it.
[00:31:12] Dr. Jay: Yeah, and I've, I very carefully question people when they put that as part of their financial plan.
And I'll be honest, some of people, I mean, I a hundred percent agree that that's what they're gonna do. Like they, they know they're, they're going. You know, they're, they're making their life. They're gonna stick with it. And I believe them. The hard part, so somebody brought this case to me, it was interesting.
Somebody has a family, has a large history of Alzheimer's, and she said, Hey, when I lose my mind, I'd like to, you know, opt out. And by the way, I understand my family has a large Alzheimer's history. One of my big fears losing my, my mind. Like I get it. Like I truly get it. But then I went, our healthcare system's broken.
You. She's like, I wanna go to Switzerland for the suicide pot. If I lose my mind. The odds of your, of like the person who's, you know, your medical power of attorney, being able to get that done is zero. Once you're in the medical system, could you imagine signing out Ama? To go to another country to be, I can't, no,
[00:32:09] Naseema: it's not gonna happen.
Especially because people that say that then don't put the things in place and then once you get a me a, a, a diagnosis, that doctor is gonna do what they need to do. And no, not with the way our healthcare system is set up, like good luck. Like you're gonna be in court for 20 years trying to get that person out of care, or you are gonna.
It's criminally
[00:32:33] Dr. Jay: charged. This was, this was, we were trying to figure out the legal paperwork. Yeah, we're working for lawyers and all that. And I put on my healthcare hat and I was like, I don't care what you have written. Like the doctor's gonna go, yeah, that is way too much liability for me to sign off on.
I'm, you know, if somebody has Alzheimer's, they're like, yep. Their family member's not making a good decision. I'm gonna make decisions for 'em. Like, these are the things that go into long-term care. Right. The money stuff is actually the easier part. Like, who's gonna make decisions for you and how, and what do you want and what?
It's hard, but you need to do that now. Not once you get sick, you know, once you, especially if it's a dementia or Alzheimer's or cognitive, once you start showing cognitive decline, you may not be able to make your own decisions. And by the way, that doesn't mean you have to be old to do that. Like
[00:33:21] Naseema: you getting that, I mean, I just, one of my co I just lost one of my coworkers at 36 and I'm sure she thought she had time to make more decisions and so I think.
This is a timely conversation, especially like just in my life, because of course I'm in that sandwich generation where I'm planning for my kids, but also planning for my father who's, who's a big part of my life because he helps me with my kids. And so this is super timely, super, like for me to reflect on my policies, on my parents' policies, which, you know, you wanna think about, but then.
You don't , you kind of feel like, well, we'll get to that when it happens, but why not plan for it? Like, and I think that's a great suggestion. Like, I will be taking over his payments if they're still there.
[00:34:12] Dr. Jay: Well, it's funny, it's like you're gonna be like, dad, I'm gonna pay for that. He's gonna be like, you're gonna do what?
Like, It's just peace of mind. Seriously. Yeah. Yeah. Seriously. Change, change the bill to send it to me. And I, you know, he, I saw like the, the caliper, I think it was like three grand a year for the unlimited. It was like something silly. Like I was like for something their sixties. I was like, wow, this is super cheap price.
But it was, Write
[00:34:35] Naseema: the whole check for the year. Okay. Cause I don't wanna make sure, I wanna make sure it doesn't lapse cuz we gonna have to take care of this. Okay. This is before, this is before my kids' retirement. I mean college fund, this is before all that stuff. Like listen, we will take care of it.
Yes.
[00:34:49] Dr. Jay: Yep. One other thing just side note on long-term care. If you're a vet, you know, you, you, you get VA benefits. There actually are some long-term care benefits for vets that are separate. Those might be through VA homes and others. Also, if you are caring for your elderly parents, a lot of them may qualify for vet benefits and not even realize it, you know, like Vietnam.
Vietnam or
[00:35:11] Naseema: something. Yeah. That's my dad. That's my
[00:35:13] Dr. Jay: dad. We may be like a dad coverage through the va. And, and people don't think about that stuff. And by the way, the time to start working on that coverage is now cuz it actually help both on medical and long-term care and all that. But you wanna be able to take care of everything.
And I think you understand this cuz you come outta medical when you have medical issues, you don't great. Make great financial decisions. Like, you know, you're, when you're not feeling well. So you wanna do all of this as far in advance as you.
[00:35:38] Naseema: Yeah. I have some work to do for myself. I have some work to do for my dad, but I am happy we had this conversation right now because I feel like. I'm at an optimal time where I am relatively healthy And I can get these policies in place for a relatively inexpensive price, but also I have the ability to financially support my father's policy.
So that is something that is on my to-do list for this week, so thank you so much for that, Dr.
[00:36:08] Dr. Jay: Absolutely.
[00:36:10] Naseema: I know that there are so many other people that are in the same place and can benefit for this information, and I hope this kicks you into gear to take action because you are in that population that can benefit from this. So thank you again Dr. Jay for such valuable information.
[00:36:28] Dr. Jay: Absolutely. And if anyone wants to reach out to me you can reach out to me@childfreewealth.com.
I dunno about you, but for me, 2022 is actually a pretty good year. So as an opportunity to give back, I'm doing a little bit of financial freedom planning here in February. So for 45 people, I'm doing a half an hour free financial planning. That no, no, like strings, no nothing. Just come ask me your questions.
Naimo include the link. But you can come say, Hey, what about myTurn Care? Or You're investing, or you're budgeting, whatever it is. Here's an opportunity to talk to a CFP without. Having to put out the bill, it's just an opportunity for me to give back to the community. That's been so great to me
[00:37:08] Naseema: and I hope you guys understand how gracious that is, because his time is very valuable.
So I hope you're able to take advantage of that because that is something that he does not need to do, but I know could benefit so many people. So thank you for that as well, Dr. Che.
[00:37:25] Dr. Jay: Great.
Hey there I’m Naseema
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