leveraging long term care solutions in retirement planning ......(massmutual), its employees and...
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Leveraging Long Term Care Solutions in Retirement Planning
Rich Samuelson, Regional Sales Director
MassMutual
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The information provided is not written or
intended as tax or legal advice and may
not be relied on for purposes of avoiding
any Federal tax penalties. Massachusetts
Mutual Life Insurance Company
(MassMutual), its employees and
representatives are not authorized to give
tax or legal advice. Individuals are
encouraged to seek advice from their
own tax or legal counsel.
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Why Are You Here?
Clients need to prepare for wellness costs in retirement
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The Age Wave Has Begun
Risks in Retirement
LTC Options
Agenda
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The Age Wave Has Begun
0
20
40
60
80
100
2000 2010 2020 2030 2040 2050
Mill
ion
s
Projected U.S. Population Age 65 and Older
Age 65 and older
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The Age Wave Has Begun
Who are the Baby Boomers?
• Age 50+
• Believe health is the #1 ingredient for
a happy retirement.
• Only 1 in 7 has attempted to estimate
how much they may need for
healthcare and long term care
expenses.
• More than half retire earlier than
expected, and health is the #1
reason.Health and Retirement: Planning for the Great Unknown, Merrill Lynch and Age Wave, 2015.
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Key Risks with Retirement Planning
1. Longevity
How long will you live?
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Key Risks with Retirement Planning
2. Inflation Risk:
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Key Risks with Retirement Planning
3. Health Care
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Key Risks with Retirement Planning
4. Health Care
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Key Risks with Retirement Planning
4. Health Care
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Key Risks with Retirement Planning
5. Debt
32% of Americans 56-61 carry $12,490 of non mortgage debt in retirement.
37% of Americans have less then $1,000 in checking Accounts
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Carrying Debt in Retirement
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Do you know someone who…
Planned to retire in 2009,
but was not able to?
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Investment Risk
S & P 500® STOCK PRICE INDEX
The S&P 500® price index is a measure of common stock market performance in the U.S. This market index has been provided for informational
purposes only; it is unmanaged and does not reflect investment fees or expenses. Individuals cannot invest directly in an index.
The average 401(k) balance declined by 34.8% during the Great Recession of 2007 - 2009
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Home in Retirement
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Home in Retirement
What do retirees say about their homes?
Home in Retirement: More Freedom, New Choices, Merrill Lynch and Age Wave, 2015.
I am living in the best home of my life
I am free to choose where I most want to live
My mortgage is paid off
My home’s emotional value is more important than its financial value
If I need extra care, I want it to be in my own home
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Home in Retirement
Where retirees prefer to receive long term care
Home in Retirement: More Freedom, New Choices, Merrill Lynch and Age Wave, 2015.
Own Home85%
Assisted Living Facility
10%
Family Member Home
4%
Nursing Home1%
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Home in Retirement
Where individuals receive care is changing
Centers for Medicare and Medicaid Services, 2013.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Nursing Home Residents Home Health Care Recipients
Tho
usa
nd
s
Up 30%
Down 5%
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People receive long term care:
●In their homes
●Community-based care
●Adult day care centers
●Assisted living facilities
●Nursing homes
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Long term care costs:
NAT IONAL MEDIAN COSTS*
* Source: Cost of Care Survey, Genworth, 2017.
Nursing home (private room)
$97,445/year
$8,121/month
$267/day
Home health aide
$21.50/hour
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How will you pay for care?
• #
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Consider:
●Health insurance?
●Disability income insurance?
●Government programs?
●Medicare*
●Medicaid*
For more information regarding benefits provided by Medicare or Medicaid, visit www.cms.hhs.gov. Medicaid guidelines vary by state. Contact your local Medicaid office for details.
*
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More considerations:
● Savings?
● Liquidate accounts or
assets?
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Background
LTC Options
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Hybrid Single Prem. Standalone LTC Rider’s on life policy
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LTC Tools
• Traditional LTCI
• Prospects generally age 45-70
• Level annual premiums
• Full underwriting
• Premiums eligible to be deducted, benefits generally received tax free
• 37 State Partnership Programs for Medicaid Protection
• Prospects generally age 50-65
• Life insurance/LTC coverage• Single premium
• Gender specific pricing, simplified app & uw
• A portion of premium eligible to be deducted, benefits generally received tax free
• Not Partnership eligible
• Death benefit acceleration rider
• Prospects generally life buyers age 35-55
• Premiums scheduled to be level
• Gender specific pricing, full life & ltc underwriting
• Premiums NOT tax deductible, tax-free benefits subject to 3rd party ownership restrictions
• Not partnership eligible
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30.
$-
$0.5
$1.0
$1.5
$2.0
$2.5
2007 2008 2009 2010 2011 2012 2013
“LTC/Life” Combo Products
Industry Single Premium Sales (in billions)
Source: LIMRA Sales Results
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Right product for the client
1. What’s the main coverage objective?
2. What can they afford?
3. What sources do they have to pay for future health care costs?
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Questions?