Planning for Your Future

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PLANNING FOR YOUR FUTURE Taking a nimble, proactive approach to lifelong well-being

Considering the long view

Long-term care insurance options that address financial needs now and in the future

By ANDY BASZUK

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ong-term care can be an emotionally charged topic during retirement planning.

It’s understandable that most people do not want to think about themselves or a spouse as ever being unable to live independently. Given the daunting cost of assisted living and how quickly costs continue to rise, it’s an important topic.

Long-term care insurance should be carefully considered when thinking about protecting assets in retirement and accumulating wealth for the next generation.

Basic long-term care insurance covers nursing home and assisted living needs, but this type of insurance often comes with a very

high price tag. The high premiums and knowledge that the insurance may never be needed can cause people to think that self-funding is a smarter way to go. While it’s true that the insurance can be very expensive, the potential cost of care can be even more so. There are certainly cases where self-funding may be doable and advisable, but for most, it creates a potentially significant risk to portfolio assets, which limits the ability to leave a legacy.

Within the next decade, 10,000 baby boomers will reach age 65 every day, and seven out of 10 of those individuals will require some type of long-term care, according to a Genworth 2020 study. This means that, unfortunately, many of us will be faced with paying for these services in one way or another. Although the cost of care varies across the country, Genworth calculates the average national monthly cost of a private room in a nursing home to be $8,821 in 2020.

Typically, the average length of stay

is 24 to 48 months but for cognitive illness, the length of stays can increase significantly.

The good news is there are now alternatives to traditional long-term care insurance with more flexibility, making them much more attractive.

It is no longer simply a decision limited to buying traditional insurance or shouldering the risk yourself. Instead, a great alternative is a hybrid long-term care policy.

This vehicle generally creates more outcome certainty than traditional long-term care policies. Premium payments are guaranteed, so the spouse or children will receive a death benefit if the long-term care feature is not used. The benefits are tax efficient. Hybrid policies require an initial planned (single or multiyear) premium and offer a monthly care benefit that increases with inflation and, importantly, a return of premium feature and a death benefit.

Another option is a survivorship universal life policy with a long-

term care rider. This type of policy requires structured and predetermined premium payments and offers the ability to surrender for cash value with the protection of the long-term care rider, if needed, along with a highly leveraged death benefit. While traditional long-term care policies do not guarantee level premiums, both hybrid life/longterm care policies do, which can be an advantage.

People tend to begin this decision-making process while looking at their overall financial plan for retirement, often in their 50s or 60s. However, these policies are available at any age. Most products tend to be more competitive if set up when the insured is younger. Also, many insurance carriers offer a price break for couples that apply together.

Each type of long-term care insurance involves its own level of underwriting to qualify for coverage.

While some require a full exam and medical records review, others simply require a short questionnaire

or brief telephone interview. Once the policies are in place, the insured would receive a claim if diagnosed with an eligible cognitive impairment or if the insured cannot perform at least two of the six Activities of Daily Living (ADLs) without assistance.

Everyone is different, but the best way to consider your long-term care risks is to consider your asset base today and its ability to fund a longterm care stay. Would that impede your wealth transfer goals or the assets’ ability to also support other family members either while you are sick or after you are gone? Despite it being an uncomfortable topic, taking the time to consider your options in this space could make a momentous impact to you and your loved ones. Compare your options, make the best choice for your own circumstances and be prepared.

Andy Baszuk is vice president, Insurance Services at Ancora. Contact him at 216-825-4000 or abaszuk@ ancora.net.

The age of innovation

By KATHY AMES CARR Crain’s Content Studio-Cleveland

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ealth care and hospitality are common denominators in the formula for providing quality of life in senior living communities. From the types of services and amenities offered to the variety of residential options available, senior living continues to evolve to cater to the needs of individuals as they progress through different life stages. The pandemic illustrated why technology must be a driving factor in the way communities integrate, market and deliver innovation in health care and hospitality.

“The pandemic has changed how senior living communities prioritize creative aging,” said Lee Ann O’Brien, chief marketing officer at McGregor. “We have been increasing the use of technology in promoting health and wellness.”

A survey conducted in 2018 by the International Council on Active Aging showed that most senior living communities are shifting from a care-first model toward an approach that prioritizes wellness lifestyle with options for care available. About 60% of the respondents predicted that by 2023, their retirement communities would be based on a wellness lifestyle, with

wellness programs defined as: • Education and lifelong learning • Exercise (led by both instructors and technology) • Health education and disease management • Food and nutrition education and preparation • Intergenerational programs linking youth and older adults.

The pandemic illustrated that technology must have a prominent and comprehensive place in senior living wellness, O’Brien said.

“2020 was the age of technology, and residents were challenged with integrating technology into their lives,” she said. “The average age

A McGregor resident utilizes a tablet for communication and to access information. During the pandemic, McGregor helped residents learn how to use a variety of digital tools to remain connected with loved ones. of our residents is between 83 and 85, and they were not tech savvy.

Innovation means being forwardthinking, and for us, this means

finding new ways to address and service needs for our residents and (Continued on next page)

This advertising-supported section/feature is produced by Crain’s Content Studio-Cleveland, the marketing storytelling arm of Crain’s Cleveland Business. The Crain’s Cleveland Business newsroom is not involved in creating Crain’s Content Studio content.

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Some Missions Say it All!

A leading provider for elders, McGregor, a non-profit Senior Living Community, has been meeting the changing needs of Northeast Ohio’s seniors for over a century. Through our residential care services, community-based PACE program that keeps people connected in the community, and our grant-making foundation that supports innovations, workforce development and quality of care in all settings, McGregor provides ways to age well and improve lives!

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their families. We trained residents on using texts, composing and receiving emails, and learning how to use virtual chatrooms to communicate with loved ones.

Remaining connected with loved ones during isolation was critical to maintaining health and wellness.”

A FOCUS ON ACCOMMODATIONS Similarly, the implementation of new technology and equipment contributed to the safety of residents and staff throughout the pandemic, including new air handling and ventilation systems, automated COVID-19 visitor screening technology and the use of iPads to keep residents connected to family members, said Lisa Brazytis, chief marketing officer at Jennings.

“Throughout Jennings’ residences, when we were unable to host communal activities, our closedcircuit TV channels provided technology for staff to broadcast information and activities to residents, such as fitness classes with staff, games, contests and lifelong learning programs,” she said.

Jennings’ innovative spirit extends beyond its responsiveness to acute needs, Brazytis added, pointing out that Jennings was a founding member of LeadingAge Ohio, which advocated for quality standards in nursing homes, and was one of the first in the area to provide fully private residential suites and a decentralized

floor plan. Ceiling-mounted resident lifts provide comfort and dignity for individuals who require assistance with transfers and alleviates the physical pain from caregiving staff who are required to assist with lifting. Fall protection flooring helps minimize falls and injury.

Additionally, “Jennings has created small house assisted living residences – a nationally renowned lifestyle for individuals to live together as a household and direct their daily routines,” Brazytis said.

During the pandemic, Eliza Jennings installed a UVC PureLight 360 A Jennings resident participates in a virtual fitness sanitizing system that class led by Jennings staff member Wendy Kakou eliminates more than via the facility’s closed-circuit TV channel.

99% of SARS-CoV-2 in a 30-foot-by-30in the strategic and development foot room in under 10 minutes. discussions about how to improve This technology also is effective the quality of senior living in eliminating other harmful throughout its campus, he said. pathogens.

“We are undergoing a massive “We were one of the first senior restructuring of our campus in living providers to do so, and I’m Olmsted Township,” said Boyson, proud to say we’re COVID-19 free,” referring to its 100-acre Renaissance said Richard Boyson, president and Retirement Campus. “Our plans CEO. involved board leadership, the frontThe application of innovation line staff and more than 20 residents, is as much a practical endeavor some who had architectural and as it is a philosophical approach. engineering backgrounds —in what Eliza Jennings continuously amenities and innovations should engages its stakeholders, including be part of the new assisted living residents, their families and staff, campus.”

Get more with Ancora.

Life. On your terms.

We offer investment opportunities covering equities, fixed income and alternatives, as well as wealth planning and retirement plan solutions— all delivered with a personalized service that’s focused on helping you to get more out of life.

Get more with Ancora.

216-825-4000 / www.ancora.net

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Managing the expectations of paying for health care

By KATHY AMES CARR Crain’s Content Studio-Cleveland

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he idea of retirement is appealing. Decades of living by alarm clocks and logging long workdays yield to unscheduled days of quality time with loved ones and indulging in leisurely pursuits.

It is all well and good to muse about one’s desired retirement reality, but just make sure that vision addresses appropriate health care financial management, financial planners and industry professionals say.

“Health care is part of our goalbased conversations with our clients,” said Vanessa Mavec King, vice president, financial planner at Ancora.

Planning for retirement often begins with conversations about how to build enough wealth to comfortably finance one’s lifestyle during retirement and sustain a legacy for loved ones in perpetuity. However, since health care accounts for one of the largest expenses in retirement, forecasting one’s anticipated health care needs during this life stage must be a key part of the financial planning discussion, King said.

“We break out health care as its own separate goal during our discussions of financial planning for retirement,” she said. “We provide an analysis of insurance option benefits versus self-fund planning.”

According to Fidelity, the average couple will require $295,000 in current dollars to pay for medical expenses in retirement, excluding long-term care. Different factors

contribute to the anticipated outlay.

Unlike previous generations, today’s and tomorrow’s retirees may not have access to employer- or union-sponsored retirement health benefits. The average retirement age of 62 is three years before an individual is eligible to enroll in Medicare.

Additionally, health care continues to outpace the rate of general inflation.

The current general inflation rate is 1.4%, compared with a 1.9% rate of health care inflation, according to the Bureau of Labor Statistics.

The gap has been much wider in recent years. In 2019, for example, the health care inflation rate more than doubled the general inflation rate.

“We are aggressive in terms of forecasting the anticipated costs of health care according to inflation trends,” King said. “This way, we can help our clients make sure they have enough assets in place to pay for health care during retirement.

The data show that it is never too early to begin financial planning for retirement. We often find ourselves working with Generations 2 and 3 as we work with our clients.”

For those pre-retirees whose employers offer a health savings account-eligible health plan, King suggests individuals enroll and max out their health savings account. The HSA enables an individual to save pre-tax dollars, which can grow and be withdrawn tax-free if used for qualified medical expenses.

“HSAs are a triple tax win,” King said.

Various insurance products also can help offset the cost of health care

Experience a luxurious VIBRANT lifestyle and WORLD-CLASS Independent Living.

Independent Living at the Renaissance Retirement Campus welcomes you into a warm, friendly community surrounded by people who care.

Conveniently located in Olmsted Township, the Renaissance offers a variety of luxurious options and unrivaled amenities to help you design your own vibrant lifestyle.

during retirement, including longterm care insurance and a hybrid long-term care policy, she said.

AGE-OLD QUESTIONS AARP, a nonprofit interest group for individuals age 50 and older, recognizes that a significant share of its constituency still is in the workforce.

As such, it is facing critical questions from its membership about how to adequately plan to pay for their planned and unplanned health care expenses in retirement, said Jason Smith, interim state manager of advocacy at AARP Ohio.

“These are especially challenging times, with the rising costs of health care and the pandemic hitting some individuals’ savings pretty hard,” Smith said. “The pandemic has shown how important it is to have savings for unplanned events.”

To that extent, AARP offers a number of tools and resources for both members and non-members to help improve their financial position for retirement, including how to save money and pay down debt such as

student loans, lingering medical debt and credit card debt.

“You don’t want an albatross around your neck during retirement,” Smith said.

About 55 million, or nearly half of Americans, have no access to a retirement plan through their employer, according to AARP. “Americans faced a retirement crisis before COVID-19, and we don’t know what the implications are post-pandemic,” Smith said. “In Ohio, 64% of residents work for a small business and do not have access to employer-sponsored retirement plans.”

Lee Ann O’Brien, chief marketing officer at McGregor, said that senior living provider coordinates communication and logistics on behalf of its residents and their families to help support individual health care considerations, which is especially beneficial for the low-income and financially challenged population.

“We work with a lot of elder care attorneys, Lutheran Metropolitan Ministry and the Legal Aid Society

of Cleveland to implement estate plan needs, including how to pay for medical and senior living expenses,” she said.

The staff at Eliza Jennings recognizes how important it is to individualize each current and interested resident’s financial considerations with their current and anticipated health care needs.

“Our sales counselors do an excellent job in having an honest dialogue with individuals and their families about what an individual’s health care needs are today and what they may be seven or 10 years and even longer into the future,” said Richard Boyson, president and CEO of the senior living provider. “We help break down the all the costs and demonstrate what maintenance-free living at our Renaissance Retirement campus looks like from a financial and well-being perspective, and how our campus features different residential solutions to help someone transition between different stages of life depending on their health care requirements.”

A non-profit organization serving Northeast Ohio seniors since 1942

Whether you seek independent or supported living— or services to help you remain at home—Jennings has the choices you need across a whole continuum of residences and services. Choose an engaging, worry-free residence, designed for your lifestyle and interests. Explore the balance of privacy, friendly neighbors and choices in activities to enjoy life the way you choose.

Discover modern style, individualized comforts and exceptional amenities that help you live the life you deserve, including special events, daily Mass, mission and values-based services.

• • • • • • • •

Adult day services Alzheimer’s/memory care Apartments with services Assisted living Child and infantcare Community programs Home care Hospice

• • • •

Lifelong learning Long-term care Respite care Short-term skilled nursing & rehabilitation • Spiritual services • Villa homes and cottage homes • Volunteer opportunities

Honored as a top employer and caregiver: learn more at jenningsohio.org/honors Connect with us in social media: @JenningsOhio

Call 440.235.7112 to learn more.

Brecksville | Chardon | Garfield Heights | Shaker Heights

(216) 581-2900 | jenningsohio.org

elizajennings.org

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