Eggs, Baskets, and Long Term Care Planning

Eggs, Baskets, and Long Term Care Planning

If there’s one thing we all understand about eggs and baskets, it’s never to put all of the former in only one of the latter. One stumble, and all those eggs are no more. “Would you put all your stock holdings into only one company?” we are asked. “Of course not,” we reply! “Would you bet more than you can afford to lose on the spin of a roulette wheel?” the questioner proceeds. “Do you take me for an idiot?” we answer. He leans in, “So you don’t sound like the kind of person who would – in all of your retirement planning – count on neither you nor your loved one needing long term care?” “That would be silly, and I’m not that foolish,” we answer, and then realize that we may have fallen into exactly that trap. Who among us has the audacity to think that we won’t need assistance if we live to a ripe old age? And it’s exactly that – needing assistance for more than 90 days with the activities of daily living – that’s part of the definition of long term care. It’s also one of the ways insureds become eligible for benefits. Surely we don’t think that we are immune from severe cognitive impairment (the rest of the definition and the other benefit trigger)? Yet many of us prefer to maintain the artifice of invincibility. And sadder still, many of our financial and legal advisors gladly go along with our self-deception. Perhaps they find it easier than starting a meaningful long term care planning discussion. Or, perhaps we have made it clear that we are not open to the topic. Another common practice is for advisors to automatically throw in what they describe as long term care (LTC) protection with other policies such

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Benjamin Franklin and Long Term Care Planning Decisions

Benjamin Franklin had his own intriguing method of decision-making. As Franklin himself explained in a letter to a friend in 1772, decision-making can be difficult “chiefly because while we have them under Consideration all the Reasons pro and con are not present to the Mind at the same time; but sometimes one Set present themselves, and at other times another, the first being out of Sight.” He continued “Hence the various Purposes or Inclinations that alternately prevail, and the Uncertainty that perplexes us.” Franklin himself described his process as dividing a paper into two columns, labeled Pro and Con. He brainstormed all the reasons that could occur to him in the appropriate columns. Then, estimating their respective weights, when finding two, one on each side, that seem equal, he crossed them out. Franklin explained his system further, “If I find a Reason pro equal to some two Reasons con, I strike out the three.” At the end of the process he is left with remaining arguments in either the Pro or the Con column, which represent his best decision – on either the Pro or Con side of the question. Although comprehensive long term care insurance wasn’t available until 220 years after Franklin’s letter, perhaps it makes sense to apply Franklin’s 1772 decision-making process to the very modern question of whether or not to buy a policy? There are several reasons that I think this approach merits consideration. The list – and the respective ‘weights’ of each item – are made from the point-of-view of the decision-maker. This forces the decision-maker to accurately access his (or her) own situation, as well as how important different items are to him only. The empty lines on the piece of paper encourage the decision-maker to rack his or her brain for an exhaustive

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What the White House Conference on Aging Teaches Us

The White House Conference on Aging (WHCOA) takes place only once every 10 years. Given the topic’s importance, one would reasonably expect quite a bit of hoopla to accompany this more-rare-than-a-blue-moon event. Quite the contrary. Since the passage of the Older American Act in 1965, prior conference had 1,000 or more delegates and met over a few days. This time around, there were no delegates, but 200 instead people were invited to the national event. This time around the conference lasted only one day; it was held July 13. One reporter dubbed the event “The Conference on Aging that Wasn’t.” Congress hadn’t reauthorized the Older Americans Act so there was no funding for the traditional multi-day event. As a result of the severe time constraint, the day’s content focused on 4 subjects,. Unfortunately, none of the four was how to pay for long term care. If one were cynical, you could reflect that Congress’ lack of attention to the WHCOA – and the agenda for the event itself – reflected the greater population’s widespread denial of the importance of planning for how to pay for an extended old age. Long term care planning is the kind of topic that individuals, politicians, and even whole countries like to ignore. Belle Likover, an elderly woman who commented at a regional forum leading up to the 2015 WHCOA: “In 1995, I met Claude Pepper [the late politician and advocate for elderly rights] at the WHCOA,” said Belle Likover, “and the thing that strikes me is that the issues are the same issues year after year, decade after decade.” By 2030, one in every 5 Americans will be age 65 or older. Experts agree it’s best to plan for future long term care costs by age 50 or 60 or so (the sooner one

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