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Planning For Longevity The Missing Link in Your Retirement Plan

Planning For Longevity The Missing Link in Your Retirement Plan. “Two-thirds of everyone who has ever lived past 65 in the history of the world are alive today. Throughout all of history, most people didn’t age. They died. Ken Dychtwald Author, Age Wave. Aging of America.

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Planning For Longevity The Missing Link in Your Retirement Plan

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  1. Planning For LongevityThe Missing Link in Your Retirement Plan

  2. “Two-thirds of everyone who has ever lived past 65 in the history of the world are alive today. Throughout all of history, most people didn’t age. They died. Ken Dychtwald Author, Age Wave

  3. Aging of America • Number of Americans over the age of 65 has grown from 1 in 40 to 1 in 10. It may grow to 1 in 3 during the next 30 years. Average Life ExpectancyQUIZ Roman Era 22 Renaissance 35 1600’s 45-52 1935 61.7 1991 70.5 Presently 78

  4. Our Greatest Fears About Getting Old Health Problems Income Problems Being dependent Dying Being alone 32% 19% 8% 4% Health care, insurance costs 3% 3% Source: The Pew Research Center National poll Nov 9-27, USA Today, March 06

  5. Aging and Health Changes • Coronary Heart Disease • Cancer • Stroke • Osteoporosis • Multiple Sclerosis • Diabetes • Parkinson’s • Alzheimer's

  6. Coronary Heart Disease (CHD) • Every 29 seconds an American suffers a coronary event. • Each year, 700,000 have their first attack • CHD is the leading cause of permanent disability in the U.S. labor force. • 22% of men will be disabled with heart failure • 49% of woman will be disabled with heart failure Source: American Heart Association; 2005 Update

  7. Cancer • The American Cancer Society estimated that 1,372,910 men and women (710,040 men and 662,870 women) will be diagnosed with and 570,280 men and women will die of cancer of all sites in 2005.

  8. Stroke • Each year 500,000 American suffer their first stroke. • Stroke is the leading cause of serious, long-term disability and institutional care is required by 20% at three months after onset. • 1/3 of people having strokes are under the age of 65.* Source: American Heart Association; 2005 Fact Book * Schrop, Joannie M., “Stroke Buster: New Treatments in the Fight Against Brain Attacks,” US News World Report, March 15, 1999

  9. Osteoporosis • Often called the “Silent Disease” • 10 million already have the disease • 34 million have low bone mass • 80% are women • 50% of woman ages 50+ will have an osteoporosis-related fracture in their lifetime • 25% of men ages 50+ will suffer the same fate. • 6 months after a hip fracture, only 15% can walk across a room unaided. Source: National Osteoporosis Foundation web; Oct. 2005

  10. Multiple Sclerosis (MS) • Affects 400,000 people in the U.S. • 10,000 cases are diagnosed each year • Most are between ages 20 & 50. • About 25% become wheelchair bound • 70% eventually have limited capacity Source: Multiple Sclerosis Society Research Highlights, 2005

  11. Diabetes • 18.2 million people in the U.S. have diabetes • Over 1.3 million new cases are diagnosed each year. • Over 500,000 of new cases are people ages 40-59. • Risk of stroke is 2x-4x higher for people with diabetes Source: American Diabetes Association, Oct. 2005

  12. Parkinson’s Disease • 1 million Americans suffer from it. • 40,000 newly diagnosed cases each year • Usually develops after the age of 65 • 15% of those diagnosed are under age 50. Source: Parkinson’s Disease Foundation, Oct. 2005

  13. Alzheimer’s Disease • Est. 4.5 million Americans have it. • Est. 16 million could have it by 2050 • 1 in 10 over age 65 is affected • A person with Alzheimer’s will live an average of 8 years and up to as many as 20 years from the onset of symptoms. Source: Alzheimer’s Association Fact Sheet, Oct. 2005

  14. Your Present and Past • Family History of Health Conditions Requiring Prolonged Assistance • Parents • Grandparents • Siblings • Children

  15. What is Long-Term Care? • Long-Term Care is the personal care you may need on an ongoing basis due to: • A disabling injury • Chronic medical condition • Effects of aging • Long-Term Care helps people with the essential Activities of Daily Living (ADLs) such as: • Bathing, eating, dressing, continence, toileting, transferring • Cognitive disorders such as Alzheimers

  16. 13% Nursing Home Care Where Are Long-Term Care Services Received? 87% Home Care, Assisted Living and Adult Day Care Source: “Facts and Trends: The Nursing Facility Sourcebook”, American Health Care Association, 2001 & “Older and Younger People with Disabilities: Improving Chronic Care Throughout the Life Span”, Mental Health.About.com, January 2, 2002

  17. Could it Happen to You? • Home care recipients receive an average of 59 hours of care per week – 36 hours of formal home care and 23 hours of family care.1 • People age 65 face at least a 40% risk of entering a Nursing Facility. 2 • The average Nursing Facility stay is 2.4 years 3 and 10% will stay five years or longer.2 • “A Descriptive Analysis of Patterns of Informal and Formal Caregiving Among Privately Insured and Non-Privately Insured Disabled Elders Living in the Community,” 1999 • AHIP, “Guide to Long-Term Care Insurance”, 2002 • National Center for Health Statistics, US Department of Health and Human Services, “The National Nursing Home Survey, 2002

  18. Long Term Care Financial Risk Assume $150 per day 5% Compound annual growth. Source: Actual costs vary by region. Average daily rate for semi-private room in a nursing home is 176/day or $64,240 annually. MetLife Market Survey if Nursing Home & Home Care Costs; Sept 2005

  19. A Glimpse Into the Future • 25 years from now, you develop Multiple Sclerosis and become wheelchair bound. • Your condition progresses and you eventually require 30 months of paid assistance. • Your care costs $457,157 • How would this affect your retirement plan? • Impact on spouse and family?

  20. Failure to Prepare for the Cost of Long-Term Care is the Primary Cause of Impoverishment Among the Elderly. • 70% of those admitted to a Nursing Home are eligible for need based assistance (Medicaid) within the first year. • ½ of all couples with one spouse in a Nursing Home are bankrupt Medicaid: Paying for Nursing Home Care”, AARP, October 2002 Baby Boomers to go Broke?!?, PR Newswire, April 7 2000

  21. The Big Question How will you pay for your Long-Term Care? • Family assistance • Personal assets • Government • Medicare • Medicaid (welfare) • Private Insurance

  22. LTCIA Life Insurance Wills/Trusts Health Insurance Retirement Account Savings Investments

  23. Planning for the Unknown “Today & Tomorrow” Vital Asset Protection Strategy

  24. Retirement Planning Growth and Protection Strategies Stocks Bonds IRA’s 401k Mutual Funds Fixed Indexed Annuity Guaranteed Return Annuity Accumulation Protection & Security Emergency Savings Insurance

  25. It Takes all Three MONEY GROWTH TIME Starting Later = Less Time Starting Later = More Money Starting Later = Less Growth

  26. Retirement Planning Goal $ $ Retirement Savings Growth Years 0 10 20 30 40 50 • For most people with retirement in the horizon, they will • not have enough money to retire comfortably. • Protection of Accumulation Assets is critical

  27. The Best Laid Plan $ Years 0 10 20 30 40 50 • Catastrophic illness or accident could wipe out a lifetime • of savings • People don’t plan to fail, they just fail to plan

  28. Protection with Growth = Retirement Security $ $ Retirement Savings LTC Insurance Protection Grows Years 0 10 20 30 40 50 • Asset protection is as important as asset accumulation • Your protection is designed to grow in value to continue • to meet your future needs

  29. The Sooner You Invest: The Less Your Investment, but the Greater Your Return Example: Age 55, 4 Year, $4,500, 5% Comp. Married Preferred Today Delayed Delayed Delayed 5 Yrs 10 Yrs 15 Yrs Annual Premium Premium to Age 85 Benefit Account-Yr 10 Yr 20 Yr 30 Yr 40 Yr 50 $1,733.67 43,341.75 279,505.66 455,285.27 741,611.73 1,208,007.37 1,967,716.71 $1,383.12 41,493.60 356,727.92 581,072.20 946,505.38 1,541,757.53 2,511,360.55 $2,336.22 46,724.40 219,000.00 356,727.92 581,072.20 946,505.38 1,541,757.53 $3,525.66 52,884.90 Nothing 279,505.66 455,285.27 741,611.73 1,208,007.37 MetLife Ideal II

  30. Increasing Annual Insurance Leverage Premium % of Account Value (Leverage) Annual Premium LTCIA Benefit Account Value .6% .4% .2% .1% .09% .06% Today Yr 10 Yr 20 Yr 30 Yr 40 Yr 50 $1,383 1,383 1,383 1,383 1,383 1,383 $216,000 356,727 581,072 946,505 1,541,757 2,511,360 Assumes 5% compound inflation added.

  31. Real Cost of WaitingTaking into account age & inflation

  32. Applicants Who Wanted Protection But Ineligible Due to Health History Heart Disease, Cancer, Stroke, Osteoporosis, MS, Diabetes, Parkinsons, Alzheimers, etc. 2005 AIM Experience

  33. 100% Risk Retention Versus Pennies on the Dollar

  34. Benefits of Ownership • Peace of mind • Protection of Retirement Assets and Lifestyle • Avoid Dependence on Others • Tax Favored Status • Freedom and Control of the Future • Type of Care Received • Where Care is Received • Custom Plan Design • Benefits Right for You • Invest within Your Budget

  35. The Walls Around Your Estate Fire or tornado? Homeowners insurance (1 in 1200) House/Autos Savings/Investments Income Car accident? Autoinsurance (1 in 240) $30K Medical Incident? Medicalinsurance (1 in 15) Long term care? You pay? (1 in 2) 1. “Mastering Long-Term Care”, Journal of Financial Service Professionals, July 1999 2. “What Attorney Should Know About Long-Term Care Insurance”, Elder Law Journal, Vol. 7 #1, 1999

  36. Why Wait?If it EVER makes sense, it makes the most sense NOW • Will You Get Healthier? • Will Rates Decrease? • Will Total LTCIA Values be Higher? • Would a Tragic Illness or or Accident Affect Your Retirement Plan? • Will Care Costs Go Down in the Future? • Will you be covered now should an unforeseen accident or illness strike tomorrow?

  37. Next Steps • Review plan design options • Select appropriate plan based on budget criteria • Complete required paperwork to open account • Attach initial deposit • Review carrier underwriting requirements, timeline and procedures • Upon approval - keep as ordered, make adjustments, return if dissatisfied – 30 day money back satisfaction guarantee

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