A Repeatable Process Will Bring Clarity To Necessary Planning

Most Americans lack a formal plan for Healthcare In Retirement and Long-Term Care in their comprehensive planning, and that’s simply a reality; however, this isn't where you should start the "well, that's not in my wheelhouse" nonsense!   And that’s because, regardless of your advisory function with clients, it will take me about five seconds (at most) to define your role and why you must, or have a fiduciary duty to, address this topic with your clients.....Period!


Once you embrace a successful, repeatable PROCESS, perhaps the rest will fall into place to bring more clarity to the planning...


Step #1 - Help clients see the problem and clarify why answers to basic questions should be found in their financial, retirement, estate, or risk management planning. Deciding whether that means a formal plan, memorialized decisions based on legal documentation, or insurance solutions, the next step is to define a client's exposure to potential risk exposure. 


Step #2 - Quantify the current and future cost of healthcare, and explain how this is an unfunded liability on the client’s personal balance sheet.  Doing that will allow you to continue the discussion and quickly move toward having clients complete a HALO Assessment. The report will provide results based on their unique and personal health situation, lifestyle, and family dynamics.


Step #3 – It’s now time to inventory your client’s assets, including the honest and realistic evaluation of their health and/or insurability from the HALO report.  This will significantly impact moving through the remaining steps. 


Step #4 - This is where you should have a meaningful discussion about the four solutions available to your client.


  • Go It Alone:  There will be clients who believe "self-funding" is the best choice to cover all the expenses excluded by Medicare, a Medigap plan, or health insurance. If they do, your job is NOT over.  You should explain why self-funding this risk is a poor choice.  If self-funding remains the choice, you should work with the client to identify specific assets to fund that future liability.  These should be earmarked to avoid uncertainty or “crisis planning” when the need to cover those expenses for care occurs. 


  • Rely on Family: If there are insufficient assets to cover the potential liability, there must be a determination whether siblings or adult children should become part of the discussion.  Are they willing or able to accept the physical, financial, or emotional responsibility role as a caregiver in the future?   It can become quite clear how there are seen and unseen events that make this a potentially disastrous planning scenario.


  • Rely on Government: Again, if there are insufficient assets to cover the potential liability, plans should be set in motion to qualify for Medicaid and determine how to prepare a "spend-down" - based on the state of domicile - and become eligible for the program. 


  • Risk Mitigation: Insuring Long-Term Care can be accomplished in many different ways. However, mitigating the risk and transferring some amount of that potential liability to an insurance carrier can be advantageous and may be easier than you or your clients might think. 


Step #5 - Engagement and implementation of your client's plan.


When considering all of life's eventualities, healthcare in retirement is simply a mandatory expense your clients must address. As their advisor, this should be your reality check: Will your clients have plans they control, or will healthcare eventually control their plans? 


Please contact us with questions or  to discuss specific client scenarios.....



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