By Edward Leone Jr. CFP RFC MBA DMD
Contact Information: 303-478-6793 edleonedds@gmail.com
I am seeing increased exposure of long-term care insurance products in the literature. This coverage is becoming an increased matter of concern to many people. Just as a provision of background facts I have discover from the Journal of Financial Planning Stat Bank the following:
77% of people say they have not set aside money for future medical expenses
3% the number of adults who carry long-term care insurance
45 million americans are 65 or older and 8 million of them do have long-term care insurance
$245,000 is the amount that will be needed by the average married couple over the age of 65 to deal with healthcare costs in retirement.
Long-term care insurance products are being vended by fewer insurance companies and premiums are observed to be increasing by up to 130% in recent years perhaps due to extended longevity factors. It appears that we may be dealing with a product that has a very limited market place since if you can afford it, you could perhaps self fund these covered events. Those who cannot afford it seem to resort to Medicaid eventually. In order to make wise selections on these products regardless of economic resource, purchase policies early, check all options and include family in discussions of these issues and plans for potential events which may be covered under long-term care insurance.
According to Steve Forbes, Washington D C is floating the idea that IRA accounts should be required to hold a certain amount of government bonds. What will this strategy mean for the potential for asset growth in these accounts. Who’s money is it when you cannot control a decision on how to invest it? Bonds are an element in an investment portfolio on which the portfolio owner and perhaps an adviser need to dictate quality and quantity.
While we are on the subject of your retirement savings portfolio, dividend paying stocks are very popular since dividends per share grew by 9.5% in 2015. Dividends account for more that 40% of stock market returns over time. It appears that life-cycle or target-date funds are losing some appeal. These funds adjust the content by percent of bonds verses stocks as the age of the fund owner advances automatically. Given the poor returns on bonds, these fund are seeing lower than normal yields and compromising the risk of running out of money during extended retirement years. It is important to have a continued strategy for asset growth in your portfolio, but also a strategy to deliver a constant stream of revenue to meet retirement expenses. This is becoming a complicated planning task! For many of us regardless of current age, the prospect of depending on children and other family members in our advanced years is not desirable.
For The Record:
DJIA 17,740.63
S & P 500 2,057.14
NASDAQ 4,736.16
Suggested Reading: “The Real Crash” by Peter Schiff
Leonesmoneymonitormonthly's Blog 