SPEAKER 03 : 0:00

Welcome to Retirement Unpacked with Al Smith, owner of Golden Eagle Financial. You want a retirement plan that alleviates your fears about the future so you know your money will last. As a chartered financial consultant, Al Smith will help you find a balance between the risk and reward of the market and the safety of your retirement income. And now, here’s your host, Al Smith.

SPEAKER 02 : 0:25

Welcome to another program of Retirement Unpacked. I want to thank you for tuning in. I’m sure there’s other things you could be doing, but you’re here listening to me. If you’re driving, don’t take any notes. But we’re going to have some really good information for you today. Last week, we talked a little bit about AI, and I’m going to talk a little bit more about that this week, more specifically how AI answers some particular questions. Before I dive into that, I want to let you know about an upcoming event, the 19th of March at the Belmar Library. Belmar, as you probably may know, it’s near the intersection of Wadsworth and Alameda. The event on the 19th, that’s a Thursday, is from 6 till 7 30 at the Belmar Library. The event will We will be talking about essential tax strategies for retirement. And we’re going to talk a little bit about estate planning, but mostly about the tax strategies for retirement, how you can retire keeping most, possibly even all, of the income you’ll be receiving in retirement. And that takes some planning. and the planning is what we’re going to be talking about. Now, if you’re not able to attend this event, but you would like to have a conversation about maybe how you could pay a little less in tax and retirement, or if you’re on track, if you believe you’re saving enough money and you’re not sure and you’d like a bit of an analysis, that’s clearly part of what we do. Contact my office at 303-744-1128, and we can have a conversation. If you live a pretty good distance away, I often meet people halfway for a cup of coffee somewhere for folks who live way up north or maybe in Colorado Springs. We’ll meet in Castle Rock, things like that. Now, last week, we talked a little bit about AI, and we posed some questions to AI. The AI one that we used was Hazel. There’s a lot of them. There’s ChatGBT. There’s Grok. There’s Claude. There are a lot of them, and I’m not picking one versus another because I haven’t done massive research about AI, but AI is sort of just a little bit like You know, like Google, they had to input information before they can make it available to you. So the input of that information is going to determine what’s going to come out. I asked Hazel, I asked, how likely is personal care or long-term care to be the case for a person in the future? Let’s say a person 65 years old and so forth. And the answer, basically, is it’s common. Well, that’s a pretty vague answer, but it says most people will need some assistance with everyday activities, and those are included. These are called ADLs, bathing, dressing, etc. eating, transportation, medication, cognitive impairment, going to the bathroom, continence. Some of those are described in what are called ADLs, activities of daily living. The things that make it more or less likely, they gave some factors, age and sex. Obviously, if you’re older, it’s much more likely. Women, if they need care in one of these areas, it’s likely they will need it for longer because they live longer. If someone has certain chronic conditions such as diabetes, stroke, cognitive impairment, obesity, any one of these sorts of things, it’s making care more likely. Now, some of these things are more likely to cause someone to have a shorter life expectancy. If someone has serious heart problems or something of that nature, They may end up needing care for a longer period, but what often occurs is they just don’t live as long and may have a stroke or heart attack that cuts their life expectancy short and maybe won’t result in a period during which they need care. Some other things. Lifestyle, smoking history, physical activity, diet, alcohol use. These are all things that will help determine if you’re likely or not likely to need care. Family longevity. Did your parents live for a long period of time or did they die suddenly at a younger age? And younger age, for example, could be in the 60s or 70s because a lot of people are living well into the 80s and 90s. What we don’t know is what will the last two or three years of our life, what are they going to be like? The home environment, stairs, falls, things of that nature can make it much more likely that someone may need care. And when someone is up in years, a fall or a fracture can result in needing care where that may not be the case for a younger person. Marital status, solo agers they are called, they’re at higher odds of needing support, paid support. And the reason for that is because when there is a spouse or partner in the household, it’s more likely that they’ll be taking care of one another and the need for care is less likely. Finances and insurance, ability to bring support into the home versus relying on unpaid care or Medicaid. A lot of different ways people can receive care. That was something brought forth by Hazel, the AI. There’s informal or unpaid care, help from family, friends, home, relatives, and so forth. And I recall one statistic that about 80% of the home care that’s received by people is unpaid care. by family or friends in their home. And if you know someone who’s providing this kind of care for someone over a long period of time, give them a break. Offer to watch this person so this caregiver can get a chance to maybe go out for lunch or go out and see a movie or go out and hang with some friends that perhaps they haven’t seen in a while because they’ve spent time Being a caregiver. So home care can also be paid home care. There’s aides, homemaker services, nurses that come to the home, which are far more expensive than just a home health care aide. Community-based, there’s something called adult daycare. And that is one of the less expensive ways of providing assistance. But it still means that this person will need care when he or she is not at the adult care facility, meal preparation, transportation. If you drive around town at all, you will often see vehicles that are used for medical services, non-emergency medical services, and so forth. Also, there’s Meals on Wheels. A lot of people who are elderly depend on Meals on Wheels, which I think is a great program. Residential include assisted living and memory care. Memory care is usually a subset of skilled nursing care. Assisted living is more of a group retirement community, so to speak, and then additional services are sort of like on an a la carte or a cafeteria basis. In other words, if someone’s living in assisted living, and they may need care helping with their medications, or they may need care having meal preparation. So some of the things beyond the residence result in additional costs. Now, Hazel was, you know, quite helpful. And one of the things that they recommended is having like what they describe as a risk audit. And what they’re talking about for that is helping determine how likely it is that someone may need care in the future. Home safety had a lot to do with that, having a ramp rather than stairs, living in one-story residence rather than two-story, whether that’s a home, apartment, whatever. And the big thing that isn’t talked about very much, because I didn’t ask Hazel this question, is funding strategy. Self funding means you pay for it out of pocket. And with the costs, and I’ll talk about costs a little bit later, this can become prohibitively expensive. You can buy traditional long term care insurance. It needs to be bought at a younger age because it’s rather expensive. And if you buy it at a younger age, it’s important that an inflation rider be included because if someone buys long-term care insurance in their 50s, they may not need it for 30 years. And if that’s the case, unless that benefit has increased, it’s going to be woefully inadequate. Hybrid products, life insurance and annuities, they can also provide benefits for long-term care, and those vary enormously and should be evaluated very carefully for what their benefits are. Health savings accounts, you can use tax-favored dollars to pay for long-term care premiums as well as the care itself. Lastly, Medicaid planning and or VA benefits are available for those who qualify. And with Medicaid, the ballpark arrangement is you have to have your own personal assets dwindle down to about $2,000 in Colorado. in order to qualify for benefits. VA benefits are different, and that’s enough information on VA benefits. We could probably have half of another show all about that. But for veterans, there are benefits through the VA. that can, you know, be of assistance with long-term care. And I think perhaps one of the most important things with regard to long-term care is to be thinking in terms of not only how one would pay for it, but what kind of care is going to be the best. Because we looked at it, and there’s home care, there’s assisted living, there’s memory care, and all of those have pros and cons, so to speak. Home care, a lot of people, as they age, they say, well, I want to stay in my home. But if someone has a full-time person to provide home care, that is likely to be one of the most expensive alternatives. I’ll talk a little bit more about the cost of care after the break. But home health care is great. People can remain in their home. But having someone provide care in their home can be quite expensive. We’ll talk more about that after the break.

SPEAKER 01 : 13:41

Wherever you are on your retirement journey, a happy audit of your finances and goals with Golden Eagle Financial can help. Al Smith of Golden Eagle has helped hundreds of KLZ listeners get set up for success in their retirement. He will review what you currently have and discuss available growth options. With decades of experience, Al has tools to develop unique strategies for his clients using his knowledge of the market and diverse product options. This means your money works smarter for you. He takes everything into consideration, from how you want to spend your time and money in retirement to helping ensure you’re prepared for any unforeseen circumstances. Best of all, there’s no charge for the audit, so there’s zero risk to learn how you’re doing, like will your nest egg last or are your contributions adequate? Schedule your free happy retirement audit today with our trusted partner, Golden Eagle Financial, at klzradio.com slash money. Investment advisory services offered through Brookstone Capital Management, LLC. A registered investment advisor. BCM and Golden Eagle Financial Limited are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.

SPEAKER 02 : 14:48

Welcome back to Retirement Unpacked. We were talking about home health care. And before I dive more deeply into that, I wanted to put something out there. What do you think might be two of the most growing types of businesses over the last, oh, maybe 20 or 30 years? Businesses that you can hardly drive in a metropolitan area. more than a few miles before you see at least one of these businesses. Well, my observation leads me to believe that assisted living facilities, retirement communities, and nursing homes, it’s hard to drive much of a distance at all in the Denver metro area without seeing at least one of those facilities. The other type I believe that is springing up all over the place, and they seem to be very successful, excuse me, are storage units. And I think one is largely dependent on the other. When grandma or grandpa has a stroke and he or she or the couple had been living in a home, now there is sort of a rush to find them a place and assisted living and so forth. And I would say if you find yourself in this circumstance where you have a relative that you know is going to need to move from independent living to assisted living or possibly a nursing home or something, I would say don’t wait to find some availability because some of the better places, nicer places have waiting lists. But in any event, when this occurs, there may be a modest home full of furniture and one thing or another, and a lot of those contents end up in storage units. And many times the value of those contents far exceeds a few months’ payments of furniture. whatever those storage units charge. And they’re not inexpensive. If it’s a larger unit, they can be rather expensive. But in any event, we were talking for the break about home care. That’s where an individual wants to stay in place. And if other family members can provide that care, that’s a good thing. Some of the pros are it provides comfort, autonomy, People can scale their hours up or down. There’s fewer disruptive moves. Someone obviously doesn’t need to move if they’re getting care in their home. Some of the considerations are safety considerations, making certain that the home where the person is receiving the care doesn’t have a lot of stairs or things that would be of a risk to someone who’s receiving this kind of care. Assisted living is becoming very popular. That hasn’t always been around. We’ve had nursing homes for many, many years. Assisted living probably only goes back 30 or 40 years. It’s, for lack of a better word, it’s kind of a hybrid between home care and the nursing home. And assisted living, people can receive assistance, but that is usually on an as-needed basis, assistance with things like taking medication, bathing, dressing, so forth. Some of the advantages, socialization, there’s other people and so forth. There can be bundled services. There is usually a base rent, a basic amount of cost, and then the other things, as I mentioned, are sort of on a cafeteria or a la carte basis if there’s other things that are needed. Memory care. is extremely helpful for people who are experiencing Alzheimer’s or dementia because some of the problems there, a person may appear to be in good health, but they can often wander and there’s very much safety and behavioral concerns. The advantage is they’re usually very secure so that Somebody walking off is less likely disadvantaged. They’re expensive because they need a higher ratio of staff to the people in order to provide safety. And the last, the most comprehensive, is a skilled nursing facility, and that can be with either a private or semi-private room. A private room in a skilled nursing facility can be $140,000 a year. So it can be rather expensive, but that’s usually where people need not only custodial care but some level of medical care. They’re usually staffed with nurses. in addition to other workers and so forth. So these are a lot of the things that AI brought to my attention when I asked Hazel some things about long-term care. There is a company who’s been a leader in long-term care, and they had a lot of very useful information about the various costs of care. And I found that to be quite useful. They had information about cost as well as some other statistics. And one of the statistics I found to be most interesting is that older adults who have health problems, the thing in common they have is they often have less wealth. And I don’t know if that’s like the chicken or the egg. Is it because they had less wealth that they developed the health problems? Or did the health problems reduce their net worth so they ended up with less health. Maybe they weren’t able to work as long as other people and as a result had a smaller nest egg and so forth. But some of the research I did beyond Hazel is through Genworth. They’re a very, very big company that provides long-term care insurance and this isn’t on the bandwagon for purchasing long-term care insurance. But because they’re a leader in that, they also developed some very strong statistics because they’ve seen what their claims have been like and they understand that. Also some information from some other resources that did a lot of research. A big study by Health and Human Services that referred to a lot of other referenced studies. One of the other ones, besides having less wealth, I thought this was tremendously interesting, is that older adults with no high school education were three times as likely to need care as those who have a college degree. And I’m not saying getting a higher education is going to mean you’re going to remain healthy into the future and not need long-term care, but it is an unusual statistic, and it’s not subtle. Needing care three times as much as with folks who have a college degree, that is really significant. Genworth and their research, they determined, and this is in Colorado, and by the way, for most types of care, Colorado is more expensive than the national average, a little bit like our housing and that sort of thing. Home health care, and this is based on 44 hours per week in Colorado, and so home health care, if it’s 44 hours a week, that basically means that evenings and weekends, someone else is going to have to provide care. But in spite of that, that would run about $96,000 a year, and that doesn’t take into consideration evening and weekend and holiday care. Assisted living in Colorado would run about $70,000 a year, a little lower. in the neighborhood of $6,000 a month. And again, like I described earlier, that can come with piecemeal or a la carte other services, depending on what level of service that person would need. Also, in the HHS study, rather than talking about long-term care, they use an acronym, LTSS. long-term service and support. And I think one of the reasons they use that is most of the care people are receiving is not really medical care. It’s not services provided by doctors and nurses. It’s services that are provided to help people do things that they used to be able to do completely on their own. Some other really interesting statistics is about 35% of people over 65 will spend time in a nursing home and about 42% will receive paid home care. Thank you for tuning in. I hope this has been helpful. Some of it has come from AI and some of it has come from some statistics. But the bottom line is there’s a high probability that the last few years of our lives are going to cost more. because we may need care at some level. If you’d like to talk about that, call my office, 303-744-1128. God bless you. Thank you for listening. Hopefully you’ll be here next week.

SPEAKER 03 : 25:28

Thank you for listening to Retirement Unpacked with your host, Al Smith of Golden Eagle Financial.