Tax Loss Harvesting is one of those ”advanced” portfolio management techniques that you hear about. And with the recent market performance, we’ve been hearing about it a lot lately. So, we decided to bring Bob French, from Retirement Researcher, back to discuss Tax Loss (and Gain!) Harvesting - what it is, how it works, where the pitfalls are, and if you might want to incorporate it into your portfolio management strategy. Listen now to learn more!




This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/roth/ to download McLean’s free eBook, ”Is a Roth Conversion Right For You?”

Episode 39: It’s Looking Like a Good Harvest: Should you use Tax Loss Harvesting in Your Portfolio?

The purpose of Retire With Style is to help you discover the retirement income plan that is right for you. The first step is to discover your retirement income personality. Your hosts Wade Pfau, PhD, CFA, RICP and Alex Murguia, PhD walk you through creating and implementing a retirement plan that will help you reach your goals, and that you’ll be able to stick with.
Start by going to risaprofile.com/style and sign up to take the industry’s first financial personality tool for retirement planning.

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How To

In this episode, Wade and Alex discuss the different features of long-term care insurance. They cover topics such as waiting periods, benefit periods, benefit amounts, inflation adjustments, and methods of payment. They also touch on the administrative aspects of managing long-term care insurance and qualifying expenses. In this conversation, Alex and Wade discuss various aspects of long-term care insurance. They cover topics such as the definition of activities of daily living, the differences between policies, the option for couples to pool their benefits, the concept of hybrid policies, underwriting requirements, coverage for living abroad, liquidity and death benefit options, ways to lower premiums, and the importance of sharing your long-term care plan with family members. The conversation concludes with a discussion on implementation and monitoring of the plan, including the importance of staying healthy and reviewing the plan regularly.




Takeaways

Long-term care insurance policies have different features that need to be considered, such as waiting periods, benefit periods, and benefit amounts.
Waiting periods determine how long you have to wait before the benefits kick in.
Benefit periods determine how long the benefits will last.
Benefit amounts can be paid per day or per month, and the total benefit pool depends on the policy.
Inflation adjustments are important to consider to protect the value of the benefits over time.
Methods of payment include reimbursement, indemnity, and cash methods.
Managing long-term care insurance can be administratively burdensome, and it may be helpful to have a trusted person or professional assist with the process.
Qualifying expenses for long-term care insurance coverage depend on the policy and may include in-home care, assisted living, nursing home care, and more. Understand the definition of activities of daily living and how they are defined in different policies.
Consider the option for couples to pool their benefits in a joint policy.
Explore hybrid policies that combine long-term care insurance with other benefits.
Be aware of the underwriting requirements and shop around for the best health classification.
Check if the policy covers living abroad if that is a consideration.
Consider the liquidity and death benefit options in hybrid policies.
Explore ways to lower premiums, such as choosing a lower level of inflation protection or a shorter benefit period.
Share your long-term care plan with relevant family members and make sure they are aware of the policy and any care coordinators.
Implement and monitor your plan regularly, reviewing it annually and making adjustments as needed.
Stay healthy and take care of your health to reduce the need for long-term care.




Chapters

00:00 Understanding the Different Features of Long-Term Care Insurance
06:10 Navigating Waiting Periods and Benefit Periods
08:13 Determining Benefit Amounts and Inflation Adjustments
15:21 Exploring Methods of Payment for Long-Term Care Insurance
24:28 Qualifying Expenses for Long-Term Care Insurance Coverage
24:56 Understanding Activities of Daily Living and Policy Differences
27:17 Pooling Benefits for Couples in Joint Policies
28:37 Exploring Hybrid Policies
29:00 Navigating Underwriting and Health Classification
30:36 Considering Coverage for Living Abroad
31:38 Understanding Liquidity and Death Benefit Options
33:05 Lowering Premiums through Various Strategies
35:23 Sharing Your Long-Term Care Plan with Family Members
37:57 Implementing and Monitoring Your Plan
39:16 Staying Healthy to Reduce the Need for Long-Term Care





Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ 

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/roth/ to download McLean’s free eBook, “Is a Roth Conversion Right For You?”

Episode 128: Long-Term Care Planning (Part 12): The Different Features of Long-Term Care Planning

In this conversation, Alex and Wade discuss traditional long-term care insurance policies. They address the declining popularity of these policies and the shift towards hybrid policies. They also cover topics such as premium payments, care coordinators, and the importance of starting early with long-term care planning. Wade emphasizes the need to read the specific details of the policy and the potential for premium hikes. They also mention the option of Medicaid for those with limited assets. Overall, the conversation highlights the considerations and factors involved in choosing a long-term care insurance policy. In this conversation, Wade Pfau and Alex Murguia discuss the different types of long-term care insurance policies, focusing on traditional policies and hybrid policies. They cover the key features and considerations of each type, including coverage options, premium hikes, and the use-it-or-lose-it aspect. They also highlight the advantages of hybrid policies, such as level premiums, relaxed underwriting, and the ability to tap into the death benefit for long-term care expenses. The conversation concludes with a discussion on the perceived disadvantages of traditional policies and how hybrid policies aim to address them.

Takeaways

Traditional long-term care insurance policies are becoming less popular, with less than 6% of Americans age 50 and older having these policies.
The direction is shifting towards hybrid policies, which combine life insurance with long-term care benefits.
Premium payments for traditional long-term care insurance can increase over time, and it’s important to budget for potential premium hikes.
Care coordinators can be valuable in helping individuals find the right care options.
For those with limited assets, Medicaid may be a viable option for long-term care coverage.
Starting early with long-term care planning is recommended, as waiting too long can lead to health issues that may disqualify individuals from coverage.
Traditional long-term care insurance policies have coverage options for nursing home care, assisted living, at-home care, and other services, but they may not cover in-home care or respite care.
Hybrid long-term care insurance policies, which combine life insurance or annuities with long-term care benefits, have become more popular due to their level premiums, relaxed underwriting, and the ability to tap into the death benefit for long-term care expenses.
Hybrid policies offer more flexibility and liquidity compared to traditional policies, and they eliminate the risk of accidental lapses or premium hikes.
While traditional policies may have lifetime benefits, hybrid policies typically have finite benefit periods, but they may offer continuation of care riders that provide additional long-term care benefits beyond the death benefit.
Reviewing the language and features of your existing life insurance policy may reveal that you already have a long-term care benefit through an acceleration of death benefit rider.
Hybrid policies can be a better use of assets, as they reduce the need for a large cash reserve and provide the potential for higher returns on invested assets.
Hybrid policies have different names in the insurance industry, such as asset-based long-term care insurance or life insurance with a long-term care overlay.

Chapters
00:00 Introduction and Overview
03:03 The Decline of Traditional Long-Term Care Insurance
04:23 The Rise of Hybrid Policies
06:20 Understanding Premium Payments
08:00 The Role of Care Coordinators
09:30 Considering Medicaid for Limited Assets
10:22 The Importance of Starting Early
26:45 Understanding Level Premiums
28:37 Hybrid Policies: The Darling of Long-Term Care Insurance
37:05 Different Approaches to Hybrid Policies
41:02 Advantages of Hybrid Policies
44:05 Flexibility and Liquidity of Hybrid Policies
45:08 Eliminating Disadvantages of Traditional Policies

Episode 127: Long-Term Care Planning (Part 11): Traditional Long-Term Care Insurance Policies

In this episode, Wade and Alex discuss Medicaid as a funding source for long-term care. They touch on the importance of Medicaid planning and the different rules and qualifications that vary from state to state. They also highlight the need for specialized elder law attorneys to navigate the complexities of Medicaid. Wade shares his personal experience with his parents’ Medicaid coverage and the benefits it provides. The episode concludes with a reminder to consider Medicaid as an option for parents who may not have sufficient savings for long-term care. Listen now to learn more!




Takeaways

Medicaid is a state-based funding source for long-term care that is generally considered a last resort option.
Medicaid planning involves shifting assets from countable to non-countable categories to qualify for Medicaid benefits.
Every state has different rules and qualifications for Medicaid, so it’s important to consult with a specialized elder law attorney.
Medicaid reimbursements may be less than the actual cost of care, so it’s beneficial to enter long-term care facilities before needing Medicaid.
Consider Medicaid as an option for parents who may not have sufficient savings for long-term care.

Chapters

00:00 Introduction and Personal Updates
10:56 Discussing Films and Personal Interests
13:33 Transition to Discussing Medicaid
19:14 Qualifications and Asset Limits for Medicaid
23:01 Medicaid Planning and Non-Countable Assets
26:55 Personal Experiences with Medicaid Coverage
28:25 Importance of Medicaid Transition and Considerations
29:22 Conclusion and Preview of Future Episodes





Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ 

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/roth/ to download McLean’s free eBook, “Is a Roth Conversion Right For You?”

Episode 126: Long- Term Care Planning (Part 10): Medicaid as A Funding Source

In this conversation, Alex, Wade, and Jason discuss the importance of incorporating long-term care into financial planning. They share a real-life example of a client who unexpectedly needed long-term care earlier than anticipated and how having a long-term care policy helped preserve their assets. They also discuss the different types of long-term care insurance policies, such as hybrid policies, and the factors to consider when deciding whether to self-insure or purchase insurance. The conversation highlights the need to stress test financial plans for long-term care events and the value of care coordinator benefits in insurance policies. In this conversation, Jason Rizkallah discusses the process of obtaining long-term care insurance. He explains that the decision between insurance and self-insurance varies and is often influenced by factors such as cost, eligibility, and pre-existing conditions. Rizkallah also outlines the steps involved in signing up for a long-term care policy, including determining coverage amounts, obtaining quotes from providers, and going through the underwriting process. He emphasizes the importance of working with a knowledgeable long-term care specialist to navigate the complexities of the insurance market. The conversation concludes with a discussion on the need for early planning and the availability of options for long-term care coverage.

Takeaways

Incorporating long-term care into financial planning is crucial due to the high probability and cost of long-term care events.
Stress testing financial plans for long-term care events helps clients understand the potential impact on their financial situation.
Hybrid policies, which combine life insurance and long-term care coverage, can provide both a death benefit and long-term care benefits.
The cost of long-term care insurance should be compared to the potential out-of-pocket expenses to determine the value of the coverage.
Care coordinator benefits in insurance policies can be valuable for individuals who may have difficulty finding appropriate care on their own. The decision between long-term care insurance and self-insurance depends on factors such as cost, eligibility, and pre-existing conditions.
The process of obtaining long-term care insurance involves determining coverage amounts, obtaining quotes from providers, and going through the underwriting process.
Working with a knowledgeable long-term care specialist can help navigate the complexities of the insurance market and increase the chances of approval.
Early planning is crucial for long-term care, as the probability of needing care increases with age.
There are options available for long-term care coverage, including hybrid policies that offer flexibility and known benefits.

Chapters

00:00 Introduction and Guest Introduction
07:26 Benefits of Hybrid Policies
23:02 Factors to Consider in Long-Term Care Planning
32:16 Options for Long-Term Care Coverage





Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ 

This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

Episode 125: The Importance of Incorporating Long-Term Care Into Financial Planning with Jason Rizkallah

In this episode, Wade Pfau and Alex Murguia are joined by Rob Cordeau to discuss Continuing Care Retirement Communities (CCRCs). They provide an overview of what CCRCs are and how they relate to long-term care planning. They also explore how CCRCs can be an alternative to long-term care insurance and the different financing models for CCRCs. The conversation covers topics such as the large upfront costs of CCRCs, the benefits of living in a CCRC, and the options for refundable entrance fees. Rob Cordeau provides insights into continuing care retirement communities (CCRCs). He clarifies that purchasing a CCRC is not a real estate purchase but rather a contract to live in the community throughout one’s life. The entrance fee varies based on the size and features of the apartment, and there are different types of contracts, including non-refundable and refundable options. Rob also discusses the financial aspects of CCRCs, such as the relationship between entrance fees and ongoing cash flow, the potential tax deductibility of entrance fees, and the importance of financial due diligence when choosing a CCRC.

Takeaways

CCRCs are retirement communities that offer various levels of care on one campus, including independent living, assisted living, and skilled nursing care.
CCRCs can be an alternative to long-term care insurance, especially for those who want to downsize and plan for their long-term care needs.
There are different financing models for CCRCs, including large upfront costs with lower ongoing monthly costs or lower upfront costs with higher ongoing monthly costs.
Some CCRCs offer refundable entrance fees, where a portion of the fee is returned to the resident or their heirs upon moving out or passing away.
CCRCs are not real estate purchases but contracts to live in a community throughout one’s life.
The entrance fee varies based on the size and features of the apartment.
CCRCs offer different types of contracts, including non-refundable and refundable options.
Financial planning is crucial when considering a CCRC, including modeling the affordability of entrance fees and monthly service fees.
Some entrance fees may be tax deductible, depending on the contract.
Due diligence is essential to assess the financial stability and reputation of a CCRC.
CCRCs may not be suitable for individuals who prefer independent living in their own homes.
Buyer’s remorse is rare among individuals who have thoroughly considered and chosen a CCRC.

Chapters

1. Introduction and Overview of CCRCs
2. Exploring Different Financing Models for CCRCs
3. Understanding Refundable Entrance Fees in CCRCs

4. Understanding the Dynamics of CCRCs
5. Financial Underwriting and Considerations for CCRCs
6. Different Types of Contracts Offered by CCRCs
7. Financial Planning for CCRCs
8. CCRCs vs. Independent Living: Choosing the Right Option

Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ 

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/roth/ to download McLean’s free eBook, “Is a Roth Conversion Right For You?”

Episode 39: It’s Looking Like a Good Harvest: Should you use Tax Loss Harvesting in Your Portfolio?

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