Long Term Care Premiums Are on the Rise

What can you do to protect yourself?

Long term care planning remains a serious and expensive proposition. Recent news suggests that all policy owners should brace themselves for significant increases in future long term care insurance premiums.

John Hancock has proposed a 40% premium hike for a majority of customers, Genworth has proposed an 18% increase, and MetLife has stopped selling long term care insurance altogether. (These increases must still be approved by state regulators.) [Source: Money Magazine, December 2010.]

Rising health care and premiums costs affect not only those folks with existing policies, but also those who choose to self insure. So what can you do to prepare?

First, look at the bigger picture. Ask yourself, “How do these increases affect my retirement picture?” Long term care insurance is one way to protect retirement assets from large and unexpected increases in health care costs, which continue to be on the rise. Approximately 70% of people over age 65 will need long term care at some point during their lifetime – a sobering statistic. [Source: National Clearinghouse for Long-Term Care Information, 2009] The need to prepare is real, as is the inclination to push the conversation off for another time. Now, more than ever, is the time to address these costs.

Here are a few steps to consider:

If you are considering long term care insurance
When reviewing insurance benefits, pay close attention to premium affordability based on current and expected retirement income. In reality, not everyone can afford an insurance policy. And, for some, the option to self-insure -- pay for health costs out-of-pocket -- may be the better option. Rarely will an all-or-nothing solution make the most sense. Work with a qualified advisor, not just an insurance agent, to carve out unexpected health care costs that may occur during retirement, and then build a combination of solutions to address these costs.

If you own an older policy
It’s important to review your existing policy with your financial planner. Take a closer look at your premium cost and future expected income. Determine whether or not you will be able to afford future increases. A rule of the thumb suggests that premiums should not exceed 7% of total income. For older policies, you probably will not find a better deal, but you may be able to alter coverage to more closely fit today’s needs.

If you just purchased a newer policy
Newer policyholders (with no health changes) should consider shopping for additional insurers and exploring new insurance options. In recent years, there have been many hybrid options to consider in place of traditional long term care insurance. These products involve reallocating savings or investments into an insurance vehicle with long term care benefits attached. Since these products are relatively new, it’s important to work with your planner to incorporate them into your overall retirement planning.

Start planning but proceed carefully
Do your research, but do not make a snap decision. Premium increases and rising costs can stir up many emotions. Keep your long term care planning in perspective; it’s still just one piece of life’s financial puzzle. By deciding to alter or purchase coverage as part of your overall financial plan, you can create the retirement and long term care picture you desire.

Are Prepaid Credit Cards a Good Idea?

Tim Wyman, JD, CFP(r) recently quoted in article, “Prepaid cards can be very helpful in establishing good money management and budgeting habits,” says financial advisor Timothy Wyman from the Center for Financial planning in Southfield, MI. “You put an amount on the card and you know your spending limits—that’s a good thing.”

To read the entire article, please visit: Reduce Risk And Spending With Prepaid Credit Cards

It's Not Too Late to Earn Charitable Deductions for 2010 - Deadline January 30th!

With tax season quickly approaching the Center would like to remind you of a deduction opportunity still available for our charitably inclined clients.

If you would like to use a required distribution from your IRA funds to make gifts to your favorite charities, you may still do so for the 2010 tax year due to the omnibus tax legislation signed by President Obama in December. You'll have act quickly, however.

The new tax rules extend for 2010 and 2011 the option of donating IRA funds directly to qualified charities. By taking this path, the IRA holder or beneficiary avoids taking possession of the funds and the tax bill that would result.

Because the legislation took effect so close to the end of the year, a "special rule" validates such distributions for the 2010 tax year as long as the transaction is completed by January 31, 2011.

Briefly, a qualified charitable distribution (QCD), which can be made only by IRA participants who are at least 70½, may be as high as $100,000. You may have your required minimum distribution (RMD) designated as a QCD. The funds, which cannot come from active SEP or SIMPLE IRAs, must be sent directly to the qualified (IRS-approved) charitable organization. You'll be able to report the donation on your 2010 tax return.

If you wish to take advantage of this time-limited provision in the tax law, please let your financial planner at your earliest convenience.

If you're intrigued by the idea but would like to discuss the rules in more detail, your planner will be happy to talk with you about it - but please call soon!

Warm regards,
Center for Financial Planning, Inc

Announcing an Exciting Educational Event: Planning and Investment Opportunities for 2011

Please join us for a very timely educational session as we explore the recent Federal and Estate Tax law changes and a general markets overview for 2011. Most importantly, how can you take advantage of these changes and current economic landscape.

As part of an open format presentation, The Center's Tim Wyman will present the following topics:

In December 2010, Congress extended the "Bush" tax cuts - we will explore ways to make the tax code work for you.

Significant federal estate tax laws that requires your attention.

Current thoughts on the financial markets and as always stand ready to answer all of your financial and investment related questions.

We are committed to being your trusted source for economic changes that impact you both personally and financially. We hope you can make it!

Center Team Volunteers for South Oakland Lunch Program (10 years and counting….)

On Saturday, November 13^th The Center team gathered inside Genesis the Church (formerly 1^st Baptist Church of Royal Oak) kitchen ready to give back to the many less fortunate folks within our community.

In support of the Saturday Community Lunch Program, now in its 16^th year, the Center volunteered to prepare and serve a warm meal for 60 to 80 very eager patrons. These individuals are suffering severe financial hardships, elderly and homeless members of our community. Often this is the only hot nutritious meal they receive all week - ALL are in-need and no one is turned away!& To find out more about the Saturday Community Lunch Program or to volunteer, please click here to visit their Facebook page.

The Center team has served the Community Lunch Program at least annually for over 10 years. A special thanks to Jen Hackmann, who is the Center’s point person for this event each year.

Thanks also go out to our 2010 volunteers: Sandy Adams, Faith Adams, Matt Chope, Gregg Bloomfield, Jen Hackmann, Jaclyn Jackson, Arnold Levin, Marilynn Levin, Gerri Harmer, Corinne Parker, Dale Parker, Angela Palacios, Marilyn Gunther, Jennie Bauder and Troy Wyman.

Center Sponsored Education Event A Resounding Success for Seniors!!

Center for Financial Planning recently conducted 3 educational session aimed at helping our senior clients and friends navigate the many Medicare health insurance and prescription drug plans available today. Center planner, Sandy Adams, led a morning, afternoon, and evening session attended by over 100 curious and confused Medicare participants. Our guest speaker, Nat Towle, provide an hour of very informative and timely material that helped to reinforce or influence the health insurance decisions made by Medicare participants each and every year.

As Healthcare, and thus Medicare, costs continue to rise, studies estimate that a retired couple aged 65 will need over $240,000 to cover healthcare costs during their lifetimes. Thousands of seniors overpay for prescription drug plans, with millions overspent in Michigan alone.

It may be difficult to find a silver lining amongst all this news but thankfully some uplifting stories have emerged from all our efforts. Sandy Adams shares a recent client success story resulting from the workshop, "My client “Ann” called recently. Ann had attended one of the three Medicare sessions and had just finished a one-one-consultation with our presenter Nat Towle. Through tears of joy, Ann was calling to let us know that this was “the best thing you’ve ever done!” Nat helped Ann to analyze her Medicare choices and save over $200 a month in Medicare prescription costs. This is life-changing for Ann!"

We sometimes take for granted the impact these savings may have on our lives. Whether or not cost savings are available for all, one thing is for certain, plans are changing or are being eliminated on an ongoing basis. It is more important than ever to take advantage of the annual Medicare open enrollment period, which ends December 31^st for 2010. For more information, visit www.medicare.gov to review the many options available to you.

Don’t let the Medicare system frustrate you. If you feel that you, or someone you know, could benefit from the Center’s knowledge and resources in this area, please call or email Sandy Adams for additional information or to arrange an individual consultation with presenter Nat Towle.

The Center's Health and Wellness Committee Receives Community Innovation Award!

The Center is proud to announce that we reached our Health and Wellness group goal of achieving the Platinum Level Award with the American Heart Association.  We also received the Community Innovation Award for our “Souper Thursdays” program from over 70 companies that applied for this round.

The Community Innovation award is only given to one company each round. This award was achieved through healthy eating at lunchtime, team building through group participation, and charitable orientation by collecting a donation for “soup” which was disbursed to selected charities.

Special thanks to Gerri Harmer! We could not have achieved such heights without her leadership and motivation!

Matt attends 2010 FPA National Conference in Denver, Colorado.

Matt Chope recently attended the 2010 FPA National Conference in Denver, Colorado. As a Certified Financial Planner (CFP), Matt and Center planners are dedicated to sharing ideas, knowledge and support within our financial planning profession. The Financial Planning Association is one of the largest, most active, and most sophisticated financial advisor groups in the country with over 24,000 members and over 100 active local chapters. Click here to find out more about the Financial Planning Association®

Over the years , Matt has attended dozens of similar conferences and retreats with the intention of cultivating the best practices within our industry. Topics range from technology and practice enhancements to exploring new portfolio building techniques; the common theme being to improve our client's overall financial planning and investment experience.

Matt shares, "In all, it was a great conference and I was able to bring some best practices back to share with our Center team. We are implementing some of those ideas and continue to strive to enhance The Center experience. While we realize we will never be perfect, especially in this profession where so much is uncertain we will continually to work toward one of our firm values which is our passion for excellence."

Sandra Adams re-elected as President for FPA of MI!

The Center is proud to announce Sandy Adams, CFP(r) will serve a second term as President of the FPA of Michigan. This a very special honor and illustrates Sandy's commitment to serving the financial planning industry and her clients.

The Financial Planning Association of Michigan (FPA MI) is an organization of financial planning practitioners and allied professionals throughout the State of Michigan sharing ideas, knowledge and support.

Click here to read Sandy's President's Message