Financial Fitness with The Money Doctor, June 7, 2026
Financial Fitness With The Money Doctor with Frances Rahaim, Ph.D. "The Money Doctor"
New Ways to Protect Your Assets from Long-Term Care Costs
Many people understand the importance of long-term care planning—but struggle with the idea of paying expensive premiums year after year for coverage they may never use. In this episode of Financial Fitness with The Money Doctor, Frances Rahaim, Ph.D., and co-host Jess Tyler explore alternatives to traditional long-term care insurance and discuss how some newer planning strategies may help protect retirement assets from catastrophic long-term care expenses.
Topics include:
- Why long-term care costs can threaten even well-prepared retirement plans
- The difference between traditional long-term care insurance and newer asset-based approaches
- Home care, assisted living, nursing home care, and Activities of Daily Living (ADLs)
- Medicare and Medicaid misconceptions
- Questions to ask before considering any long-term care strategyHow some solutions may allow unused assets to pass to beneficiaries. This discussion is intended for educational purposes only and is not legal, tax, insurance, or investment advice. Individual circumstances vary.
Questions? Call 413-773-3333
Learn more at HugYourMoney.com
Frances Rahaim Opens Financial Fitness
In this episode of Financial Fitness, host Frances Rahaim, “The Money Doctor,” joins Jess Tyler for a practical conversation about aging, retirement savings, and the financial risk of long-term care. Frances explains that many people work hard to get out of debt, save money, and build a nest egg, only to discover later that long-term care costs can threaten the assets they planned to use in retirement or leave to their family.
Why Long-Term Care Costs Are So Dangerous
Frances explains that long-term care does not always mean a nursing home. It can involve help with activities of daily living, such as dressing, bathing, eating, continence, cognitive impairment, or basic mobility. She notes that many people prefer home health care or help from a trusted person rather than being forced into a facility, but those options can be expensive. The risk is especially difficult for people who have too much money to qualify easily for aid, but not enough money to comfortably absorb years of care costs.
The Problem with Traditional Long-Term Care Insurance
Frances says traditional long-term care insurance has never been her favorite solution because it can be very expensive and often works like “rent”: a person pays premiums for years, but if they never need the benefit, they do not get the money back. She acknowledges that traditional long-term care insurance can be right for some people, but says many clients resist it because of the cost, the emotional discomfort of imagining future care needs, and the possibility of paying large premiums without ever using the coverage.
Trusts, Family Transfers, and Medicaid Planning
Jess asks whether people should simply move assets out of their own names so they can qualify for help later. Frances explains that trusts, family transfers, and related strategies can have merit, but they also carry risks and should be handled carefully with an attorney and financial advisor. She warns that putting money in a child’s name can expose those funds to the child’s lawsuits, illness, financial problems, or other risks. She also explains that if a trust is revocable and the person still has access to the money, those assets may still be counted.
Newer Hybrid Long-Term Care Options
The main focus of the episode is a newer category of long-term care planning tools that are not traditional “use it or lose it” policies. Frances describes contracts that combine long-term care benefits with either life insurance or annuity-style structures. These products may allow someone to reposition conservative assets they do not expect to need for income, turning those assets into a larger pool of potential long-term care coverage while still preserving a death benefit or beneficiary value if the care benefit is not fully used.
A Real-Life Example of Leveraging Assets
Frances gives an example of clients who had about $400,000 in a 401(k), with enough other assets to support their retirement income. She suggested moving about $200,000 into a long-term-care-focused contract. In that example, the contract value increased for benefit purposes and created more than $500,000 in long-term care coverage from the $200,000 repositioned asset. She also explains that some contracts can include riders such as inflation protection and joint coverage for a married couple, allowing the benefit to grow and potentially cover both spouses.
What Medicare and Medicaid Actually Cover
Frances clarifies that many people mistakenly assume Medicare will cover long-term care. She explains that Medicare may cover only a limited early period in a facility, often around 90 days depending on the plan and circumstances. After that, Medicaid may become relevant, but Medicaid is needs-based and looks at income and assets. If someone has too much income or too many assets, they may not qualify until they spend down resources. For married couples, some assets may be protected for the spouse still at home, but the situation can become complicated and financially stressful.
Key Questions Before Choosing a Policy
Frances recommends asking detailed questions before choosing any long-term care solution. People should ask how they qualify, what underwriting is required, whether health conditions matter, how benefits are triggered, whether the policy reimburses receipts or pays a monthly benefit, how taxes are handled, what happens if the money is not used for care, who receives the death benefit, and how beneficiaries are set up. She especially likes policies where a person has one assigned representative and benefits can be used flexibly rather than requiring constant reimbursement paperwork.
Planning Before a Crisis
The episode closes with Frances emphasizing that long-term care planning is easier before a crisis occurs. She notes that some people may still qualify even at older ages, including an example of someone around 80 years old who was still eligible for one of these products. Her larger message is that people should not assume they are too old, too unhealthy, or too late to explore options. Instead, they should identify what they are trying to protect, review their assets, talk with qualified advisors, and decide whether a hybrid long-term care strategy could help preserve dignity, choice, and family assets.
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“Financial Fitness with The Money Doctor” is a weekly, hour-long National radio show devoted to helping individuals and small business owners better understand their finances and the psychology involved in why we make the decisions we do, how it affects our relationships, our sense of self-worth, and most importantly what we have the power to DO about it! Even prior to this current, highly timely expansion including with BBS Radio TV, which is syndicated to every major audio portal on the world wide web (150 locations reaching every corner of the world), including iHeart, Google, Apple, Amazon, Alexa, etc..., the show enjoyed long-term success in Western MA, Southern VT and NH on WHMP, WHAI, BEAR Country and other SAGA stations, with Dr. Rahaim as a sought-after guest and contributor on News and other talk programs.
Dr. Frances Rahaim’s loyal audience loves her no-nonsense, diplomatic, if sometimes controversial approach to helping sort out difficult issues surrounding effective debt management, successful budgeting, and truly holistic retirement planning and beyond. She has an uncanny ability to translate financial jargon and confusing topics into every-day easy language, engaging her listeners and disarming the stigma around talking openly about money. Rahaim, and her cohost Jess Tyler, Program Director/Morning Show Host WHMP Northampton, banter passionately about real-life, everyday money matters. Nothing is off limits! College, student loan crisis, 401k dos and don’ts, marriage, divorce, insurance, going solar, buying a car, starting a business, you name it. It’s all fair game -- political, economic, and social topics that affect us all, and ALWAYS, what you can DO to give yourself the edge.
In 2008 Rahaim started PowerDownDebt, Inc. right in the middle of the housing bubble. Four years later, she formed HUG Your Student Debt, Inc. to address the crisis not only for students but for parents struggling to retire under the weight of their children’s and often their own college loans still. At 43, with 20 years of experience as an Independent Broker / Registered Investment Advisor, Frances developed a way to address the elephant in the retirement room – becoming 100% debt-free including mortgage, student loans, credit cards, every type of debt, has broad reaching effects on RETIREMENT! Nest-eggs grow faster and last longer without the burden of debt. Today, Dr. Rahaim’s fully dynamic HUG Your MoneyTM software is patented, and she is continuously working on new developments and financial tools to help the public.
What led a top Investment professional to shift her focus toward debt? $10,800 monthly going out in mortgages and business loans, throwing extra money at it and still no real light at the end of the tunnel. In solving her own problem, she found the missing link to retirement planning – the one thing no advisor wants to talk about. The key element that changes everything you THOUGHT you knew about retirement -- liabilities. Now, financial advisors train with her to utilize this path to retirement dollars and help clients, even ones who thought the ship had sailed, get a second chance to reach their goals.
Frances doesn’t just talk the talk, she LIVED this stuff and her listeners get that. They FEEL it! Their comfort level with her non-judgemental approach and down-to-earth demeanor invites questions you never thought you’d hear anyone admit to or ask on the air!
Whether her listeners are interacting or listening in on their neighbors’ stories, this lively show holds their interest and fosters a loyalty rarely found in radio. Part financial, part domestic, part political, part entertainment, always ear-opening, informative and pragmatic.
Financial literacy and the human condition.
Welcome to Financial Fitness with the Muddy Doctor,
Dr. Francis Raim.
And even for people who are listening who might say,
well, I'm too old to get that, or I'm not healthy enough to do that.
In fact, I have somebody right now who is 80 years old.
They are still eligible for one of these products.
And again, long-term care insurance is right for some people.
It's just never won a warm spot in my heart
because it's so expensive.
And you're just saying, I'm just going to pay this money
in case I need that long-term care.
And if I don't, I'm okay with that.
It's like, I hate to say it. It's like rent.
It's like rent.
But in rent, at least you had a nice place to live.
You've enjoyed that long-term care contract.
You don't get anything out of it unless you need the benefit.
Hi, it's Francis.
I just wanted to take a minute to thank you for watching this video.
If you're catching us on YouTube, please help us help others
by clicking like, subscribe, and all notifications
so you don't miss any videos.
And check back for the next video.
I think you're going to love it.
Thanks again.
For more information, you can visit us at hugyourmoney.com.
Welcome to Financial Fitness.
I'm Jess Tyler, along with the money doctor, Dr. Francis Ram.
Hi.
Hi, Jess. How are you?
I am doing really, really good summers finally here,
which I felt like took a little bit to get here, and happy about that.
It sure did.
But the weather is great.
It makes me think of all the people that moved to Florida or California.
As we get older, we get colder.
It seems that we like to move to warm areas, it seems.
So talk about getting older.
Yeah.
Speaking of that, I'm aging just like my clients.
And one thing I notice, we tend to notice trends here as we help people
and we try to make sure that we're staying on top of things.
And one thing I've noticed is that we've helped enough people along the way to get out of debt
early.
When they get out of debt early, they have more money to save.
And so they save better, right?
That sounds like a great thing, but it does pose new challenges.
And one of the challenges is, once you start building up your nest egg and you amass a reasonable amount of money,
you sort of pass this line between where you have little assets and little income and you would qualify for
aid of some sort, Medicaid or some kind of situation like that.
And where you have more money, not so much that you're so wealthy, you don't care about those expenses,
but you're at a level where you have to protect them.
So what I see happening as my clients age is that they become more concerned about,
am I going to be able to have this money the rest of my life through retirement?
What if these things happen?
Now, the logical things that come to mind that people protect themselves from,
they do with things like life insurance or house insurance or some sort of conservative investment where they know,
okay, I'm not going to lose all my money in the market, something like that.
The thing that seems to go less talked about, I wouldn't say undiscussed, but less talked about is long-term care risks.
Now, long-term care we're talking about cognitive impairment and continents, dressing,
all kinds of things that are what we call the activities of daily living.
Okay.
It doesn't mean that you have to go into a nursing home necessarily, but you might need some sort of long-term,
oh, I don't know, care, right?
Yeah.
So it's expensive.
It's really expensive.
And in order to get it covered, very often people are sort of, and this is just in my experience,
people are sort of forced into a facility of some sort because they don't have the assets to pay for it.
To pay for home health care, for instance, or to pay for a friend or a relative who might be helping them.
And they may not qualify for aid in some way.
So this weird sort of rub just where you've done everything right, you've built a bunch of money,
you want to be able to use it in retirement, and along comes this catastrophic expense, and it can wipe you out.
Yeah, it gets really expensive.
Like even assisted living is a lot of money per month.
Yes, yeah.
And there's a website, I think it might not be LTC.gov, but you can look it up.
There's a government website that's very simple, and what it does is it gives you, you put in your zip code,
and it will tell you all the long-term care costs in your area, according to government statistics.
And in our area, it's around $4,000 a month, a little bit more than that, I think, for nursing home care.
Assisted living was just under $2,000 a month.
You can deplete your assets pretty quickly at that rate.
And so we'll talk about there are different options now than there used to be.
Now, I started at John Hancock a bazillion years ago, and when I did, long-term care was just coming on the market.
And the idea was, and has been for many years, that you pay a premium, you pay it for every month, every year,
you pay it for a long time, and it's a lot of money.
And if you don't use it, the money is gone, you lose it.
You paid for that insurance, like your homeowners, you don't get your money back, right, if you don't have a claim.
And because of the expense and because of the emotional resistance, I even found myself saying,
look, no one in my family has ever needed to go into a facility, as far as I can see back on either side.
What are the chances that I will go into a facility?
Well, you know what? The same as everybody else.
Right.
So, the chances are, hi, because we're living longer, you know, we're living longer, and as we get older, our bodies break down.
And so, I'm sure that you've had this conversation with people or heard people have it.
I'm never going into a place like that. I will check out first.
Oh, yeah. Oh, yeah, for sure.
And we all say that, and yet these places are full of people.
Not scurrying around a legal issue, but you know, I'm going to.
Do you get a lot of clients, because I hear this all the time, like, I'm going to make sure I have nothing in my name when I get to that age, because you burn through it so quick.
And is there strategies around that? Is there a way to do that where you're not going to get yourself in trouble?
Is that the smart thing to do, not have so much in your name?
That's a very good question.
Really good question.
Yes, most people try that first, I'd say, and some people successfully, right?
Okay.
Use a trust or put things, take things out of their name, but there are risks in doing this.
Okay.
And again, I'm not a lawyer or an accountant, so I'll just get that out there right now.
But let's say that you want to protect your assets by putting them in a trust.
If you still have access to the trust, those assets are probably still available.
The solution there is you make it an irrevocable trust.
And in order to do that, you better be sure you don't want to change your mind.
You don't need that money for anything.
Okay.
And is it a smart thing to do? Well, you know, a lot of times people say, well, I'm just going to put all my money in my kids' names.
That's what I hear about.
And then what happens if your kids get sued or your kid, unfortunately, becomes very ill and has the expenses there.
That money is then theirs.
So I think there are smarter ways to do it.
Those things all have merit.
There are right ways to do all of those things, to have trust and to put people's names on things.
I highly recommend that you look at everything and you talk to an attorney or financial advisor both preferably to get your ducks in a row for that.
But if what you're trying to do is minimize the assets you have so that if you have to go into a nursing home, you won't lose your money,
then you're falling into exactly what I was just talking about.
Your only option is to go into a nursing home at that point.
And most of us, I think, would prefer some sort of home health care as long as we can have it.
Yeah, people want to be in their own houses.
Yeah.
And most of the times you could need long-term care, but it's not awful.
Maybe you need help taking a shower.
Maybe you need help feeding yourself or making the meals.
Maybe you need help getting the rest.
Yeah.
Well, a lot of people can't even put their shoes on as they get older because they can't bend like that and they need help.
That's an ADL.
That's an activity of daily living.
And all you need for most of the things we're going to talk about to qualify are two of those.
And so they could be, for instance, this stuff's always yucky to talk about.
Nobody likes it and that's why we don't do it.
For instance, incontinence and subcognitive impairment or incontinence and some help dressing incontinence.
Well, a lot of times, two parents don't want their children.
They feel like they're burdening their children with that.
So if they have something that can come in and help with that, it's more comfortable for them.
Well, for sure.
So we're going to talk about, in general terms, not product specific, the newer things that are out there and how great I think they are as solutions,
not for everybody, but for the right people.
And it's a real sort of discovery to hear about these because nobody's been talking about it much in, I mean, I'm sure there's somebody out there doing a lot of talking about this, but we aren't coming across it here very often.
It always seems to be a surprise to the clients to hear about them.
But one of the things in general terms that I like about most of these kinds of solutions is that many of them have right built into their contract that you can't do it.
And so if you have a policy where you can pay them to do it, that helps check that box.
Right.
And then you don't have that weird money thing with your kids over, you know, mom and dad needed to do it.
And then you don't have that weird money thing with your kids over, you know, mom and dad needed to do it.
And so if you have a policy where you can pay them to do it, that helps check that box.
Right.
And then then you don't have that weird money thing with your kids over, you know, mom and dad needed you to do this stuff and, you know, you're just going to have to suck it up.
Right.
Yeah.
I'm sure there's enough other emotional stuff going on.
So if you can take the financial worry part out of the picture, that helps a lot.
I can imagine.
Absolutely true.
Another thing is there are features in some of these contracts that allow you to use the money in any way that you want.
So, okay, for your own care.
So you don't necessarily, yes, you have to have to need help with two ADLs to qualify, but you don't necessarily have to, you know, all the contracts provide receipts and get reimbursement, although some of the contracts work that way.
A lot of them just are like, this is what your benefit is monthly, and you're going to get that.
So I will get into more detail because it will take us a little time to do it, but let me just tease this and give you some idea of what I'm talking about.
Some of these contracts come in the form of a life insurance slash long term care policy.
Some of them come in the form of an annuity slash long term care policy.
I'm giving you very generic things here, but what I'm really telling you is nothing I'm talking about today is the kind of long term care, the traditional long term care policy.
That people would pay high premiums for and then lose the money if they didn't use it.
Is this something that your employer offers you or you have to go out on your own to find somewhere that offers this?
That's interesting.
I would love it if employers would offer this, and there probably are a few employers that do this, but in general, it's not the kind of employer benefit that you typically see in your list of benefits.
So let me give you a very broad overview, and then the second part, we'll talk about questions and how, you know, what types of things qualify you and all of that.
Okay.
So here's an example.
This is a real life example of some clients I just did this for, and there are many, but this particular one is fresh in my mind.
In this case, what we did is we took some assets that, so this is an asset driven kind of thing.
We took some assets that were very conservative, earning conservatively.
They didn't want to risk them in the market, and they didn't really think they were going to need them for income.
So these people have built enough money that this money, in this case, was actually sitting in their 401k, and they're not going to use it.
They're just going to leave it to their kids.
And so what I saw for their risk exposure was long term care.
Everything else was covered, and long term care costs could have wiped them out.
So they had about 400,000 in their 401k, and all their other assets were more than adequate for their income in the future.
And so I said, let's think about taking that 200,000 of that half of it and putting it in one of these contracts.
As soon as we did that, now the way that particular contract works, and they're all different, that particular contract takes a $200,000,
then behind the scenes puts it in another kind of contract that's guaranteed, and that, in turn, funds the premium for 10 years, which is a pace for the product.
And they do it that way because they can maximize the benefit for the client.
So the result for the client without getting too technical was we took $200,000, we put it in this contract.
It became $250,000 overnight because it got a bonus in that particular product.
But that isn't cash money for them.
I want to be very clear about that.
It became $250,000, day one, in the contract, but there are high surrender charges on these.
They want to make sure you're not going to take that money.
So you do not want to do this with money you're going to need, okay?
But what it did is it then gave them a long term care benefit of more than double that amount, more than $500,000.
Day one.
But if they don't use it for long term care, do they just lose that money?
No, they do not.
Oh, nice.
I'm telling you for asking the right questions.
No, that's what I love about this.
Okay.
You can gamble, hey, I'm going to do this.
My big risk is I'm going to tie this money up somewhere, probably.
Could you get it?
Yes, you could get it, but you would pay penalties, okay?
Which do go away over time?
So the earlier you do this, the better, right?
Okay.
But whatever you don't use goes to your beneficiaries.
Oh, perfect.
Yeah.
And you aren't paying a premium every month for it like an insurance policy is.
So, and it's still growing some money.
It's not a growth product, right?
You're not going to put it in here and get wealthy.
You're doing this to protect yourself from this kind of risk.
But the thing about it is day one, it turns into that benefit.
Now, in this couple's case, I was able to put a rider on it, two riders on it.
One is an inflation rider.
So it goes up by, in this case, I used 5%.
So it goes up by 5% every year.
So they don't buy something now that five years from now isn't worth anything to them.
It's not worth enough to pay the premiums, I mean, to pay the cost.
And the second rider was, I could do it as a joint product.
So if one of them needed care, it would pay.
But if both of them needed care, it would pay double.
It would pay for each of them.
And there are lots, I mean, you really have to read the fine print on these things, folks.
There are lots of little nuances and details.
But you can tailor the policies in those kinds of ways.
That's right.
So for one of them, just to give you an idea, I think the benefit was about $4,600 a month.
If both of them did it, it was almost double that, or it was double that.
And I think it was a total, don't quote me on this, but I think it was a total of about six years of payout.
Two years works one way, the other four years work another way.
And it's a lot of fine details you look at.
But to take $200,000 and turn it into that kind of benefit right away, protected them from a catastrophic expense going forward.
Yeah.
All right.
Well, this topic is definitely something people will have questions on.
I'm sure.
So what is your phone number?
413-773-3333.
And you can visit hugyourmoney.com.
We'll be back with a lot more from the Money Doctor, Dr. Francis Ram.
Hang on.
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Welcome back to Financial Fitness.
I'm Jess Tyler, along with the Money Doctor, Dr. Francis Ram.
Hi.
Hi, Jess.
We're talking about a topic today that not everybody wants to talk about, but it's coming really for all of us.
You know what?
Again, you make a great point.
Why don't we all have this kind of coverage, long-term care protection of some sort?
It's pretty easy, exactly what I said in the beginning of the show.
I'm not going to need to go.
I'm going to check out first.
I'm never going to need to help long-term care.
Right.
And so it's, I think we resisted even life insurance is easier to grasp than long-term care.
We all know we're going to die.
We don't, we might not accept it.
We might deal with it differently.
Nobody's questioning like, hey, I'm not going to need burial expenses because I'm not going to die.
Yeah.
Right.
But we all say, I mean, it's really hard to face that stuff.
No, I'm not going to go into a place like that or my kids are going to take care of me or I'm going to, you know, whatever.
So there are lots of different kinds of contracts like this that are not traditional long-term care policies where you pay a premium every year.
And if you don't use it, you lose it, which was a big barrier for people, I think.
So some of them are in debnity.
They just, you know, here's your coverage.
This is what it pays.
Some of them are benefits.
Like I was talking about, you get this much per month for this period of time.
There, there just, there are enough good ones out there now that if you were to call your financial advisor or you were to call us and say, this is what I want to accomplish or, or we threw that together to figure out what you're trying to accomplish.
That a policy could be almost completely tailored to your specific needs.
Okay.
And even for people who are listening who might say, well, I'm too old to get that or I'm not healthy enough to do that.
Yes, these policies are underwritten, but a little differently than a standard long-term care policy would be.
In fact, I have somebody right now who is 80 years old.
Now they won't turn 81 for a few months.
And until they turn 81, they are still eligible for one of these products that we're talking about.
And it, in his case, it virtually doubles, I hate to say doubles as money because it's not doubling his money, but it basically leverages that money, in his case, a half a million dollars, into a million dollars of coverage.
Well, you know, typically you need long-term care in the last two years of your life.
That's statistically speaking.
So a million dollars of coverage goes a long way for this guy, right?
Yeah.
Yeah.
Does his work out that money goes to some place else like the last?
It does.
Yeah, anything he doesn't spend.
So let's say he puts 500,000 in and he spends 300,000 of it under his million dollar benefit.
The balance of that 200,000 is just going to go to his beneficiary.
Okay.
Just like it would if it had been in any investment that he didn't use all the money of.
Which I love because long-term care insurance is what we're talking about.
And again, long-term care insurance is right for some people.
It's just never won a warm spot in my heart because it's so expensive.
And you're just saying, I'm just going to pay this money in case I need that long-term care.
And if I don't, I'm okay with that.
It's like, he to say it, it's like rent.
Yeah.
Yeah.
But in rent, at least you had a nice place to live.
You've enjoyed that long-term care contract.
You don't get anything out of it unless you need the benefit.
Right.
And then you won't see that money back.
There are some, I was just going to say, there are some policies with a return of premium feature on them, a benefit where they give you your money back if you don't use it.
But the premiums go up substantially to get that thing.
So I just think it's been, it's priced out of many people's ranges.
Even for myself, when I'm looking at my own finances and I'm saying, how am I going to protect myself from long-term care?
The first thing I did was to look at traditional long-term care followed by, I don't want to pay $15,000 a year for coverage for me with my family history.
And so it just is so pricey.
So this isn't for everybody, but it does work for a lot of people.
So here's what I wanted to go over briefly.
There's always this mass confusion when we start talking about long-term care.
And the first thing is, doesn't Medicare cover that?
Right.
Everybody says, doesn't Medicare cover that?
So here's the thing.
Medicare, usually, now all of these plans, private plans and public plans vary, Medicare usually will cover the first 90 days that you are in a facility, a long-term care facility.
Which isn't very long at all.
No, it's not for that to cover.
And it's also maybe not where you need to be, but you might be forced to do that in order to get this care covered for.
Right?
After that, Medicaid comes in.
Now, Medicaid is part of the welfare system.
So Medicaid looks at your assets and your income.
They do those two tests.
And if your income is low enough and you don't have much for assets, you'll qualify and Medicaid will pick up the tab for you in the future.
And if you have a tab for you in the nursing home, where it gets sticky is where maybe your income is low, but you have some assets.
Or maybe you have high income and no assets.
You could fail one of those tests.
And when you fail one of those tests, they don't pay.
Now, where are you?
Now, you're in the nursing home.
You can't pay the nursing home, but you need that level of care.
So one of the things that I love about these contracts is they almost all will pay for home health care.
Now, I know home health care is part of the long-term care contract thing now, too, but we're back to the difference in paying premiums or just sidelining some of your investment dollars to do this.
And that's where I like it.
You're not giving up very much.
You're going to a conservative product.
You're accepting some high surrender charges should you need to take money out of them and even those go down.
And they can be adjusted, too.
They're not completely scary, you know.
But that's the trade-off.
You do that in order to get this coverage.
I mean, we've all heard horror stories.
Will they take my house?
Yeah.
Let's talk about that for a second.
If you're married, unless of us are married these days, even if you're partnered, right?
But if you're legally married, they'll split the money down the middle and they'll say one spouse can keep half the money and stay in the house as long as they're alive.
But the other half of the money has to be spent down to something very, very low, a few thousand dollars, okay?
Before Medicaid will pay.
And you can dance around it and say it can be for any kind of benefit for that spouse.
Like they need a car, you can buy a car.
Yes, you can do that, but you still have to spend that money.
You're not transferring it to your kids any longer.
When the second spouse dies, then that's another story.
If there is only one person left, now they start putting liens on your house and taking your assets and doing, they don't take your assets.
They make you spend your assets.
But people work so hard to build this stuff up almost always with the hope that they will either be able to use it in retirement or make the next generation's life easier.
And a long comes a long term care expense.
And it unravels all of that.
So if you mentioned your client took money out of his 401k and did like half of it in there, do you get hit by all those big penalties you do if you take out your 401k early or does this bypass that?
Well, he's over 59 and a half.
So he had an in service transfer available to him and we were able to 1035 it directly over without a taxable consequence.
There are taxable consequences for some of the things.
For instance, in his case, that money went so he didn't have to pay tax on the lump sum.
But the premiums that are coming out of that second product every year are taxable, right?
Because he's taking the money out.
He's going to have to pay tax on that money sooner or later.
But by taking it out over 10 years to do this, it was a lighter tax bite than he would have had if he took it in a lump sum in his case.
You asked me another question about that.
Was there penalty?
Oh, the penalty and the taxes, right?
Yeah, I just know sometimes when you're looking at your 401k, you don't want to move money out because unless you reinvested in another house or whatever it might be, you get hit with those big, big taxes.
Yes, and that's a whole different conversation.
But if you're over 59 and a half, you can probably do this without taxable consequences initially at least.
Okay.
And even if you have to pay the tax on it, you're going to have to pay the tax on it sooner or later anyway.
Just, you know, do some tax planning, talk to your accountant, make sure that it's working the way you want it to work.
There are some questions that I think we should get in before we end the show.
At least just a few of the kinds of things you should ask if you're thinking about this.
You don't need to say, I want this product.
You know, you need to say, this is what I'm trying to protect.
Here are what I have for assets.
And these are my concerns.
What's the best way to do this?
I heard about this on financial fitness, right?
So one of the questions is, how do I qualify?
What kind of underwriting is there?
Are they going to do a phone interview?
Are they going to draw blood?
How do I qualify for this?
Am I going to be okay if I smoke?
If I don't smoke?
Well, you know, I have diabetes.
What do you need to know that?
And don't just assume that you won't qualify.
Definitely don't assume you won't qualify for these.
They are, I wouldn't say liberal, but they are quite reasonable.
They know what they're dealing with.
And they have these assets, which make it a little easier than just, okay, you're going to pay a premium and we're going to cover this stuff.
Okay.
Another thing you should ask is, what do I have to do if I need the benefits?
How difficult is it for me to get these benefits?
One of the companies that I work with has just one person assigned to your case and you deal with that person the whole way through.
Oh, how great is that?
Yeah.
It's really nice.
So you're not on the phone, you know, with one of the worst times in your life trying to figure out what to do talking to an AI partner.
Getting transferred and starting the whole conversation over again.
Or not getting a human, even, right?
I mean, you need a human.
So that's a question, you know, how do I get these benefits?
Is this reimbursement or is it just going to give me the money to spend however I need to on a monthly basis?
Some of the policies are reimbursement.
That means you have to collect the receipts, put them in, sort of argue a little bit maybe about whether those receipts are qualifying or not.
I like the policies.
My favorites are the ones that just say, here's your benefit.
You need care.
Spend it.
Spend it how you want to spend it.
Yeah.
And I would also want to know about the taxable consequences.
That would be a big question to ask.
How will this affect me tax-wise?
What happens to the money if I die or if I, because they all have death benefits too, that whole amount, if you didn't use it, goes like a death benefit, like a life insurance policy would.
So, you know, what happens to this money if I die?
Who does it go to?
How do I set up my beneficiaries?
And those kinds of things.
There are lots more questions, but those are the big ones I think you want to know about going in.
All right.
And always good to talk to somebody about this and you just so happen to have a phone number.
Two.
It's 413-773-3333.
And you can visit hugyourmoney.com.
The cat's going to give advice too, right?
I love the cat.
So soon as you wake up.
That's the problem.
All right.
Financial fitness with the money doctor, Dr. Francis Ram.
We'll talk again next week.
Thank you.
Thanks, Jess.
I had all these things organized.
I didn't have any of them, but it's okay.
I was learning I played for the for national now.
I played the birthday bed.
I'm like, I don't know what's going on.
It's not a Monday.
I don't know why.
But I just, you know, I just said that on the air.
I'm like, it's just a hot mess today.
So, I mean, yeah, some of that stuff like how much longer do we have left?
I'll cut that.
But the other stuff like, Oh, yeah, you said those two things.
If I don't have to cut it, I'll leave it.
You know, I don't care.
Okay.
Thank you, Jess.
Okay.
Bye.
Bye.
And choose all.
Thank you.
