EP 120 | How To NOT Outlive Your Money

EP 120 | Profit Boss® Radio

Today on Profit Boss® Radio, we talk about managing the costs of healthcare.

Specifically, we talk about making sure that paying for your own healthcare, or long-term care or assisted living doesn’t cause you to run out of money.

What You’ll Learn from This Episode

  • Why women need to be thinking about the long-term cost of healthcare
  • What long-term care insurance is and how to determine whether or not you should buy it
  • What an Elder Law Attorney does and how to find one

Reasons to Think About the Cost of Healthcare

Why do we need to think about managing the costs of healthcare? Here are just a few statistics worth noting from Morningstar.com:

  • The expected percentage of people turning 65 who will have a long-term care (LTC) need during their lifetimes is 52.3%. However, it is estimated that some 83% of help provided to older adults is delivered by friends and family. Meaning, many people, in order to avoid the high costs of healthcare, will become caregivers or the recipient of in-home care provided by non-professional or non-paid caregivers.
  • The percentage of women turning 65 who are expected to have a long-term care need during their lifetime is higher than the previous statistic, at 57.5%, likely because women typically live longer.
  • The average long-term care need for individuals over age 65 is 2 years of care.
  • Women have a 36% probability of needing more than one year in a nursing home.
  • 57.5% of people who turn 65 between 2015 and 2019 will spend less than $25,000 on LTC during their lifetimes.
  • 15.2% of people who turn 65 between 2015 and 2019 will spend more than $250,000 on LTC during their lifetimes.
  • The median annual nursing home cost in 2016 was $82,125 for a semi-private room. Private rooms cost $92,378.
  • The median average annual cost in 2016 of a private room in Manhattan was $164,250, while that same cost in Monroe, Louisiana was $63,875.

Interview with Elder Care Attorney Nicole Wipp, Esq.

Should you get long-term care insurance?

Many of you are wondering if you should purchase long-term care insurance. Nicole and I discuss this briefly during our interview, but here are some of the facts:

  • Getting a good long-term care policy is more and more difficult now. Given the expense and complexity of claims, many good insurers are throwing in the towel on the market altogether.
  • The number of long-term care policies sold in 1990 was 380K, while the number sold in 2014 was 129K.
  • Annual claims on LTC policies in the year 2000 was $1.87B and that number rose to $8.73B in 2014.

What is an Elder Law Attorney and how do you find one?

  • According to the National Academy of Elder Law Attorneys, Elder Law encompasses many different fields of law. An Elder Law Attorney specializes in how to best use their knowledge to fit the needs of seniors. Some of these fields include:
    • Preservation and transfer of assets to avoid spousal impoverishment when a spouse enters a nursing home.
    • Medicaid
    • Medicare claims & appeals
    • Estate planning, probate, etc.
  • According to Care.com, an elder law attorney can work in conjunction with other professionals in various fields to coordinate care, legal protections, and financing.
    • They can help you establish a health care power of attorney and possibly help you find the right long-term facility.
    • They can help you protect your assets while maintaining eligibility for Medicaid and certain Social Security and Medicare benefits.
    • An elder care attorney can help establish guardianship for when a person is unable to make decisions for him or herself.
    • And finally can help with financial representation: making sure an estate plan is in place and establishing a durable power of attorney.
    • It’s important to note that elder law attorneys don’t necessarily specialize in every area affecting seniors so you need to ask about the specialties of the particular attorney you’ve met with.
  • According to Nicole Wipp, my guest for today, it is incredibly important that you look for an attorney who will fill out your benefit applications and protect assets simultaneously–be sure that your attorney has experience AND success doing both of those at the same time!
    • Also, Nicole says, and I second: Do not take legal advice from anyone who isn’t your lawyer!
    • I have literally seen bad legal advice given by employees of the trusts and estates department at the bank.
    • Very few people truly understand estate and elder care law.
    • We both remind you that when you are under stress and somebody you love is in a medical crisis, even very intelligent people can end up taking really really bad financial and legal advice.

Resources and Research Mentioned in this Episode


And let’s not forget that this show is powered by you and your stories and questions. Every month I’ll be doing an #AskHilary episode where I answer listener financial questions.

      • So, what’s that top of mind money question that’s been pinging around in your brain?
      • Where have you been stopped?
      • What have you been arguing with your spouse or significant other about?
      • What tip or tool aren’t you sure about?
      • Do you have questions about saving? Spending? Budgeting? Investing?

Pick up your mobile phone right now. Yes, right now. And open your voice recorder app. Yep, go ahead and open that app and record yourself asking me that question. Just say your name, first name only is okay, and then what city you’re from, and then ask away.

Anything you want to ask. And once you’re done recording, export that beautiful little recording and email it to [email protected]

I can’t wait to hear your questions! 

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