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Samuels: Reallocating accounts to pay for unforeseen health concerns

Laurie Samuels

Laurie Samuels

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Updated: October 5, 2013 6:08AM



The government calls it longevity risk, but I call the undeniable fact that people are living longer a blessing. People are adopting more active lifestyles, and medical advances are helping people live longer than ever before.

The National Center for Health Statistics reports that, since 1900, life expectancy has generally increased by more than 25 years. So, the good news is that you’ll likely live longer than expected. Therefore, the longer you live, the greater the need to plan for the certainties and uncertainties of life. A common concern for those in or nearing retirement is how does one plan for nursing home and other health-related costs? However, many contend that the bigger and real issue is how does one pay for necessary services, especially on a retiree’s paycheck?

And then, there’s the optimist, who states that they do not want to pay for a long-term care policy that they may never need. Admittedly, these are all legitimate concerns considering that the cost of nursing home care in Illinois averages from $4,000 to $6,000 per month. And nursing home stays could last for many years.

If you or your loved one does not qualify for Medicaid, nursing home care is typically funded through personal savings or a long-term care policy. Long-term care assists people with activities of daily living such as dressing, bathing and using the bathroom. Long-term care can be provided at home, in the community, in assisted living or in nursing homes.

So, how does one plan for long-term care, keep down costs and also maintain control of their funds?

One way is to reposition money that’s sitting in accounts that are not in use. For example, a 62-year-old woman with $50,000 in a CD or savings account could reposition those funds into an insurance policy and immediately have $102,000 of nursing home care or chronic illness benefits and maintain control of her initial premium in the event she needs it.

However, she’s the optimist that I alluded to, so she will likely pass the $102,000 on to her beneficiaries.

It is important to be proactive and explore ways to pay for possible long-term care expenses. By doing so, you protect the assets you’ve accumulated and those you leave your loved ones.

Here’s to a long life and a merry one!

Laurie Samuels is a licensed attorney and insurance professional in Illinois. Her retirement firm specializes in protecting and maximizing retirement accounts and other assets. Abednego Wealth Management – The Retirement Firm, 888-633-6119



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