A Member of Eldercare Financial Network

WHAT YOU
DON’T KNOW
ABOUT
RETIREMENT
PLANNING CAN
HURT YOU

Joe & Mary’s Story

Married for 25 years, Mary 48 and Joe 51 have worked hard for most of their adult lives. Now, their two kids are out of the house, and they are looking forward to finishing up the next few years of work and heading into their retirement years. They are comfortable and have put money aside in their company retirement plans. Joe has about $150,000 in his retirement account, and Mary has a little more than $50,000 in hers.

With the children gone, and more than a decade to add to this nest egg, Mary still wonders if they will have enough to continue to live their comfortable lifestyle after retirement. While doing some reading, she became even more alarmed. She began to ask herself, “What are the chances that we will outlive our retirement income? Does Medicare cover the cost of Long Term Care [LTC]? What unexpected expenses might derail our entire financial security?”

Mary is seeing her concerns in real time as she currently deals with her aging parents. Right now, they are doing reasonably well, but they have faced several unanticipated expenses. The uncertainty of other unknowns as they age is something Mary’s afraid to face.

In fact, the uncertainty about her parents has caused more questions: How similar is Medicare to our current medical insurance? What does it cover and what will my out of pocket costs be? What will my actual Social Security benefits be when Joe and I retire? What will happen if one of us dies before we retire – how will this affect the survivor?

Even though Mary and Joe are more than a decade away from retirement, they are right to ask these questions about retirement planning now. What they don’t know can hurt them. What choices can Mary and Joe make NOW to make sure Mary’s concerns about living longer than their retirement funds don’t come true?

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Here Are Some Things You Don’t Know

   What You Don’t Know: You May Outlive Your Income

Retirement is about INCOME, not assets.

What do we mean?

Your assets are the INCOME generator. When the value of your assets changes, that affects your INCOME. You live and play from your INCOME. It’s a mistake to think that when you retire, the value of your income generator – your assets – is guaranteed to stay the same throughout your remaining lifetime.

Before you decide to retire, consider this:

  • The choices you make about your Social Security benefits and Medicare insurance benefits can adversely impact your retirement savings, and they are permanent and irreversible.

What You Don’t Know: The Dangers of Retirement  

A 2008 British research study showed that the highest number of injuries and deaths of those climbing Mount Everest occurred on the descent – coming down the mountain – rather than during their ascent up. How is this fact relevant to your retirement? Because, as the story of Joe and Mary illustrates, your descent into retirement is a lot like coming down safely from the top of Mount Everest. 

To get to retirement, you do a lot of planning in advance, you get all your gear ready, you find a few guides who can help you, and then you begin the climb up.

You’re excited and prepared – you see the summit and bolt for it. In retirement planning – that equates to 30 or 40 years of managing your money smartly. But, once you reach the highest peak – retirement age – how do you get down successfully?

Like the descent from Mount Everest, unpacking your retirement funds requires more critical planning in advance, and a great deal of patience in the making smart choices at the right time along the path down.

We can help you make your way safely down this mountain called retirement. Your strategy and plan for distribution are potentially even more critical than your earning and saving years. A poor decision here may cost you dearly.

   What I Didn’t Know: My Own Mount Everest

I experienced my own Mount Everest story while care-taking my husband’s elderly parents. It opened my eyes to how easily we can all make the wrong choices as we enter our retirement years. The rest, as they say, is history. Read my story

MY MOUNT EVEREST STORY
By Julie Ann Hepburn

In July 2016 a life-threatening crisis happened with my husband Kirk’s father and mother, Jack and Norma, which forced us to move them both immediately into an assisted living facility. We could not have anyone come into the home to help them due to their hoarding. Their home had become unsafe, and neither of them could remain in the house.

At age 83 and 84 years old, both of them continue to live on science. Recently diagnosed with Parkinson’s and dementia, Norma has had seven stents put in since 2005, with two done in 2017. Jack has had open heart surgery and testicular cancer, and in 2011, the doctors diagnosed him with Alzheimer’s disease. The crisis event that occurred made it clear even to them, there was no option – they required assistance – it was imperative at that point.

Financially speaking, the elder Hepburns were behind the eight ball – were leveraged to the max with no money saved and ever-growing credit card debts. Their few properties had maximum mortgages; they had too many vehicles and other lifestyle expenses that compromised their financial security. Norma had never worked outside the home, and early in 2015, Jack was forced to step away from the day to day operations of his business, where he had worked since the early 1970s with his business partner, who assumed control of the company.

To maintain a stream of income, we immediately stopped payments on all credit cards, mortgages and other items that were draining their cash away to fund their care – and it was still not enough. What little of their Social Security income we recaptured had to be supplemented by us. With my financial and business expertise, I was forced to help dissolve Jack’s interest in his company by structuring a stock purchase sale with his business partner. We began working on the negotiation of this sale in early 2015. More than two years and two additional attorneys later, we finally closed the transaction, which yielded only $235,000 after more than 40 years of hard work. One-third of that came to Kirk and me as reimbursement for Jack and Norma’s bills and care that we paid for since the 2016 crisis event.

To continue to generate income, Kirk and I have sold any and everything of any value, which means we are having a fire sale on heirlooms and family memorabilia, but it’s the sentimental value that is far more significant.

Furthermore, Kirk and I have funded the assisted living facilities to the tune of $11,000 per month. That’s right PER MONTH. This cost is $5,500 for each parent, and the facilities have informed us that these prices might go as high as $21,000 each per month, depending on how their level of care and assistance changes as they age, and how their various health issues progress. Unfortunately for us, Kirk’s siblings are not financially able to help, and so we are on our own in managing this situation.

Although we closed the sale of Jack’s business in early 2017, just one short year later, the balance of those funds is gone. Medicare does not pay for long-term care, and we must prove that Kirk’s parents meet the eligibility requirements for Medicaid, which the state manages. To do that, we have spent down what few assets they still have to care for them, and in May 2018, we filed the paperwork for Medicaid. Medicaid will pay 100% for their care but only at a Medicaid-qualified facility. We will continue to pay for their personal effects, any medical costs not covered by Medicare and their end-of-life expenses.

Mind you, about 12 years ago I strongly recommended to my in-laws that they get Long Term Care coverage. Because of their longtime health issues, Kirk and I realized that they were headed for future problems, and were even willing to pay the premiums, but couldn’t get them to complete the paperwork.

At the point that we were forced to take action, each parent was well beyond the requirements to qualify for benefits in most long-term care contracts – the ability to bathe, dress, eat, toilet, transfer, and normal bowel and bladder functions on their own. Jack and Norma were each further compromised by the cognitive impairments from which they individually suffer. Fortunately, before this crisis erupted, we had gotten power of attorney for both of them, which enabled us to act quickly when the moment of crisis arrived.

This situation is not uncommon. Most children are not prepared to be caregivers – emotionally, physically or financially – for their parents or in-laws; most elder parents don’t think they’ll ever be in this position, and they rarely plan for it.

Ideally, our wish and theirs would have been to bring someone into their home. Keeping Jack and Norma at home with a professional caregiver would have been a preferable option to have. A long-term care solution would have prevented Kirk and me from endangering our financial security to take care of his aging parents. We are fortunate that there was an asset – the business – which repaid the funds we initially spent on his parent’s behalf, and which kept us from having to file for Medicaid earlier in the process – not everyone is so lucky.

Unfortunately, most parents are unwilling to share their financial situation and their plans for long-term care with their children. Call it parental pride, stubbornness or denial, the inability to face their fears honestly about aging and their future care jeopardizes both their own and their loved one’s financial security.

Now that Jack and Norma are under the Medicaid umbrella, we have another concern – we worry about the quality of the care they receive. Because of the lack of planning on their part, we must rely on the state to fund their long-term care. Moving them to a private-pay facility is not an option, and we will continue to pay for whatever expenses are not covered by Medicare and Medicaid. Because of their differing health problems, they live in two separate facilities necessitating double-duty on our part. Our goal is to be hyper-vigilant about the quality and extent of their care, while diligently managing their dollars and ours for as long
as they live.

For more information, contact Julie Ann Hepburn at info@nationalprivate.com or 312.957.9400

© 2018, Income Longevity by National Private Client Group, LLC, www.incomelongevity.com

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The Solution

Solutions: Planning For Longevity Risk 

Do you think starting at age 50 is too early to begin planning for your golden retirement years? If so, think again.

Most people start thinking about this when they are 64 – that’s too late. By staring early, you give yourself plenty of room to make smart choices and avoid “longevity risk.”  

Avoiding the risk of outliving ones’ assets or INCOME generator is paramount in making the descent down the mountain into retirement. Outliving the funds produced by your income source results in a lower standard of living, reduced care, a return to employment or other circumstances that may negatively impact the golden years of you and your loved ones.

   Solutions: Planning Checklist to Manage Longevity Risk

  • It may be better to delay taking your Social Security Benefits. You can check on your Social Security Estimated Primary Insurance Amount at https://www.ssa.gov/myaccount/.
  • Get an analysis of your Social Security benefits and learn how they might impact your retirement savings.
  • Get tax neutral to make smarter retirement decisions based on economic merit and not strictly for tax reasons.
  • Understand what your Longevity Risk is and how you can avoid or eliminate falling into the financial pitfalls that plague retirees who fail to look at how each part of their retirement planning impacts the big financial picture.
  • Identify how tax-qualified retirement savings (401k, IRA, 403B, SEP, etc.) might create a massive Medicare cost in the future.
  • If a pension is part of your assets, understand the Pension Protection Act. 
  • Identify what assets to liquidate first, and which ones will serve you better as your retirement progresses.

Just like you needed a guide to get up the mountain, the descent is critical – you need a guide, even more, to help you make it through your retirement descent. You want to be in control of how to make your retirement funds last.

Just as planning to climb Mount Everest is a complex and multi-layered process, so too is planning how to reduce the risk inherent in outliving your retirement income. You need a guide who will do the analysis you need, ask the tough questions, and show you options to help you make informed decisions.

How We Can Help

There are many options and solutions to these concerns. Everyone’s situation is unique, and the best way to determine what’s appropriate for your circumstances is to schedule a FREE Social Security Income Longevity Assessment Now! Call, Email or Schedule An Appointment Now!

About Julie Ann Hepburn

“There has to be a better way,” says Julie Ann Hepburn, founder of National Private Client Group LLC, a financial advisory firm headquartered in Chicago, which promotes sound wealth building principles that leave behind the broken system of traditional financial planning. In her work with clients nationwide, Julie Ann’s approach uses a combination of historically sound financial solutions, which focuses on safeguarding principal and increasing the efficient use of investment dollars to build sustainable wealth and income longevity.

Income longevity is her mantra.

“The longer we live, the better chance there is that we will outlive our money,” says Julie Ann. Her advisory practice uses a three-prong approach to building long-term wealth:

  • A savings/financing vehicle with financial legacy benefits;
  • Unconventional investment solutions that produce consistent returns with less risk than “playing the stock market”; and
  • A long-term care plan to ensure that your money outlives you and provides a financial legacy for those you leave behind

Read The Full Bio 

Julie Ann Hepburn

Wealth Building & Income Longevity Financial Advisor
A member of the Prosperity Economics Movement Advisors’ Network and the Eldercare Financial Network

“There has to be a better way,” says Julie Ann Hepburn, founder of National Private Client Group LLC, a financial advisory firm headquartered in Chicago, which promotes sound wealth building principles that leave behind the broken system of traditional financial planning. In her work with clients nationwide, Julie Ann’s approach uses a combination of historically sound financial solutions, which focuses on safeguarding principal and increasing the efficient use of investment dollars to build sustainable wealth and income longevity.

Income longevity is her mantra.

“The longer we live, the better chance there is that we will outlive our money,” says Julie Ann. Her advisory practice uses a three-prong approach to building long-term wealth:

  • A savings/financing vehicle with financial legacy benefits;
  • Unconventional investment solutions that produce consistent returns with less risk than “playing the stock market”; and
  • A long-term care plan to ensure that your money outlives you and provides a financial legacy for those you leave behind.

A veteran of the traditional employee benefits, estate and investment planning arena for clients, Julie Ann recognizes that the system of financial planning we’ve become accustomed to in the United States no longer works. Almost two decades ago, she began to question whether the financial products and plans she was selling her clients made them financially independent. After a lot of research, she discovered the Infinite Banking Concept (IBC) that showed her the wealth-building power of participating whole life insurance sold by a mutual insurance company.

From that point on, she was willing to disrupt the traditional financial planning model, giving up her Securities license and CFP certification, to help her clients build sustainable wealth and become self-empowered financial managers. Her brand of IBC, also known as privatized banking, is Self-Empowered Banking™, which serves as the foundation of a sound money management program designed to protect principal, create wealth, and provide income longevity.

Participating whole life insurance from a mutual insurance company is a historically safe and secure financial instrument for saving cash, and for using that cash to help finance lifestyle or eliminate debt, without diminishing principal.

As Julie Ann continued to research and learn more about how people invested and saved before everything became about the stock market, shareholder returns, and interest rates, she met other financial advisors who had left conventional financial planning behind. She learned about different types of investments, which until recently, were only available to institutional investors and those with extreme wealth. These unconventional investment solutions are the second foundational block in creating a sustainable wealth building, income longevity portfolio.

Personal experience brought Julie Ann to the third foundational block of her financial planning approach – long-term care planning. The primary reason that many people outlive their income is often unforeseen, and therefore unprepared for – healthcare and aging issues. In most cases, people are in denial about the aging process. They likely grew up in extended families where children took care of elderly parents and relatives and expect their children to do the same for them.

Today’s family looks very different, with children often elsewhere in the world from their parents and grandparents or vice versa. Even with all the sophistication of traditional financial planning, most folks don’t deal with the impacts of growing old – they see retirement as jetting off to see all the places they didn’t have time for during their working years, doting on grandchildren or moving to the home/city of their dreams.

They don’t consider that once they retire – life moves from collecting assets to managing income and cash flow. There is often no plan for which assets to use for what purpose at what time during retirement years. A long-term care plan should show how to integrate Social Security funds, how to structure Medicare and supplemental programs for maximum benefits, and how other long-term care solutions, such as non-traditional asset-based long-term care insurance, factor into the income picture.

Sustainable Wealth = Income Longevity

Through the three-prong approach of whole life insurance, unconventional investment solutions and long-term care planning, Julie Ann shows clients how to build sustainable wealth by using the assets they collect now to create income longevity for the future.

She believes that economic volatility is creating a new consumer – one that is increasingly cautious and is listening, looking and learning. She finds prospective clients are more willing to explore and become more knowledgeable so that they are in better control of their financial environment.

Julie Ann is a licensed Life, Health and Long-Term Care (LTC) insurance professional and an Investment Advisor Representative (IRA) under the Partners 4 Prosperity Registered Investment Advisory (RIA). She is a member of the Prosperity Economics Movement Advisors’ Network and the Eldercare Financial Network. In her financial advisory practice, Julie Ann offers clients the best and most up-to-date information and options available by working closely with several major mutual life insurance carriers, an exclusive group of alternative investment firms and long-term care and elder care planning resource companies.

She regularly speaks in venues around the country and holds regular web conferences to share new ideas and case studies on how clients are restructuring their financial position through her three-prong approach. She is available to speak to private groups upon request. Contact her at 312.957.9400 or info@nationalprivate.com or schedule an appointment.

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