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About Mike McCann

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So far Mike McCann has created 52 blog entries.

Explore Long-Term Care Options

Mike McCann, CFP, AIFThe common U.S. life expectancy is 87 years. When you live into your 70s and beyond, the likelihood that you’ll need long-term care is considerable. Of course, much younger people can require these services, too, as a result of accidents or illnesses. About 30 percent of new long-term care insurance claims begins by age 80, and another 25 percent between ages 81 and 85, according to industry data for 2018. It’s important to explore long-term care options sooner rather than later.

Long-term care expenses average from $4,000 to $8,000 per month, depending on the level of care.

Yet, private health insurance policies, Medicare supplemental plans and group/employer plans generally do not cover long-term care costs. Medicare benefits are limited to 100 days and offered only after a hospitalization or injury. The Veterans Administration typically only covers long-term care for those with service-related disabilities.

Long-term care insurance pays for care when you become unable to care for yourself due to a disability or chronic condition; 99 percent of policies cover nursing home, assisted living and home health care. Annual premiums average $2,800. That said, different companies offer different rates and discounts, so premiums can vary by as much as 60 to 90 percent.

Our health changes, especially as we grow older. So it’s smart to look into care options well before reaching retirement age. This is especially true if you have a family history of chronic disease or disability.

There are many options for funding long-term care, and it’s important to gather as much information as possible to find the best one for you. Here are some examples:

  • Health Savings Accounts (HSAs) allow you to put money aside tax-free for medical costs, including long-term care insurance premiums.
  • Specialty or hybrid products like Life/LTC policies and LTC Annuities are becoming more common.
  • Pensions or Social Security benefits can help, depending upon the amount of money you receive and the care you need.
  • Retirement and other investment savings, if significant, may provide for your long-term care needs.
  • A home equity credit line, reverse mortgage or outright home sale can help fund care.
  • When all options have been exhausted and your income/assets have been depleted, Medicaid programs will cover nursing home care (but not assisted living care).

Before making any decisions, talk with your financial advisor. He or she can help you explore long-term care options and find the best financial solution for you and your family.

Sources: U.S. Department of Health and Human Services (longtermcare.acl.gov), American Assoc. for Long-Term Care Insurance (aaltci.org), Stanford Institute for Economic Policy Research, Morningstar.com Center for Insurance Policy and Research, Genworth.com
By |May 27th, 2019|Uncategorized|

Bitcoin Products and Pyramid Schemes

Pyramid schemes share one overriding characteristic, according to Debra Valentine, former general counsel of the Federal Trade Commission (FTC): They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Bitcoin products and pyramid scheme share this description, according to Jonathan Harris. He offers a cautionary view in a recent opinion piece for the CFA Institute.

“Bitcoin is too inefficient to be a currency. Certainly, no government has any plans to use it as one,” he wrote. Harris is a chartered financial analyst and vice president, manager of nonretail credit analytics for TD-Bank. “Thus, the sole way most promoters will realize value from their bitcoin holdings is through new entrants into the market.”

Some proponents of bitcoin equate it to investing in gold. This may be a reasonable analogy. Still, even in the best case scenario, both bitcoin and gold share the characteristics of being volatile investments with poor long-term returns. While gold has other uses (e.g. jewelry or art), Harris points out that bitcoin does not. Furthermore, after the supply of new bitcoin buyers is exhausted, final investors will find themselves with assets that decline in value as early investors sell off.

“If it looks like a pyramid scheme and sounds like a pyramid scheme, we should treat it like a pyramid scheme until proven otherwise,” Harris stresses.

Creating Diversified and Balanced Portfolios

At Perspective, our time-tested investment strategy focuses on building a well-diversified portfolio of stocks and other securities. The Perspective Investment Committee meets quarterly to review and fine-tune the list of funds our advisors utilize to build balanced client portfolios. It is part of the firm’s strategic process. Funds are selected based on several criteria. Considerations include factors such as cost and the fund manager’s tenure. It also includes overall performance and risk vs. return (both of which we compare to peer funds and other benchmarks).

For Harris’ full article on the CFA Institute website, click here.

By |January 7th, 2019|Current Affairs, Investing|

Make Your Legacy Tangible

make your legacy tangibleEstate planning is about much more than the tangible elements of life insurance and trusts, or investment accounts and wills. That’s because your money and possessions are not the only representations of your life. What about your beliefs and wisdom, your personal experiences and family stories? These are your legacy. They are the most valuable assets you can pass on to your loved ones and community. So, how do you make your legacy tangible?

“The challenge with character and intellectual assets is giving them the same kind of physicality that financial assets are given,” explains Laura Roser, author of Your Meaning Legacy. “Legacy vehicles are the physical structures that enable you to pass on your non-financial assets.”

One simple way to pass on your legacy is to write a heartfelt letter. You can also create short videos or audio recordings in which you share family traditions, memories and other stories. For those feeling especially ambitious, it has become easier than ever to create biographies, memoirs and other specialty books.

Regardless of how simple or elaborate you choose to be, you’ll want to include these items in your estate plan along with instructions for how they are to be shared and preserved. Remember, too, you don’t have to wait until your death to share them.

Sharing your life stories today can benefit you and your family in multiple ways. For example, a 2006 study from Emory University shows that children who know and understand their family’s history exhibit strong self-esteem and a belief that they can influence events and outcomes in their lives. Additional benefits, according to Roser, include decreasing depression in older adults, connecting with family, and increasing the likelihood of a successful wealth transfer.

Charitable giving can also include a legacy letter, video or other vehicle that shares personal wisdom and values. Your thoughts and insights will make the gift all the more meaningful to the recipient. A college student who benefits from your scholarship will also benefit from knowing why you gave. Nonprofit employees will appreciate knowing funds to continue their work came from someone with shared beliefs and values.

Just like the drafting of important financial papers, documenting your non-financial assets should be done before it becomes urgent or too late. Why not start right now?

Ideas to Help Make Your Legacy Tangible

  • Pick a photo from your past and write a description of what was happening, how you felt when it was taken.
  • Record a two-minute video about your wedding day, the day your child was born or a family tradition.
  • Create a “Top 10” list (of things for which you are grateful, of mistakes you’ve made and learned from, or of actions you believe create a well-lived life).
  • Write a letter to your family telling them you love them and what you consider to be their greatest gifts.
By |July 30th, 2018|Books, Client Stories, Estate Planning|

How Do You Define Wealth?

Mike McCannAmericans are split on their definitions of wealth, according to a recent survey by Charles Schwab, with some describing wealth as a specific sum of money and others describing it more as a state of mind. When asked “How do you define wealth?” the top five sentiments were:

  1. Having a lot of money (27 percent)
  2. Enjoying life’s experiences (24 percent)
  3. Being able to afford anything they want (22 percent)
  4. Living stress-free and having peace of mind (19 percent)
  5. Having loving relationships with family and friends (12 percent)

When asked to express how much is required to be considered “wealthy” in America, the average response was $2.4 million — nearly 30 times the actual median net worth of U.S. households according to the U.S. Census Bureau. Yet, when asked to compare two opposing ideas of wealth at a more personal level, Americans leaned into things that money can’t buy.

  • 65 percent equate wealth with having good physical health vs. having lots of money (35 percent)
  • 58 percent say wealth is about having gratitude vs. having money (42 percent)
  • 56 percent believe wealth is about building community vs. working on one’s career (44 percent)

“Wealth is often thought of as a lofty, unattainable number that doesn’t apply to most of us, but that’s an old-fashioned notion that needs to be retired,” said Terri Kallsen, executive vice president and head of Schwab Investor Services. “It doesn’t matter whether you have a lot or a little. What matters is that you think about the money you have as your wealth, and that you pay attention to it. Being engaged is the only way to reach your personal goals.”

“Money is a strange thing. It ranks with love as our greatest source of joy, and with death as our greatest source of anxiety.” – Joe Moore, offensive line coach at Notre Dame under Head Football Coach Lou Holtz (’80s- ’90s)

How do you define wealth? Whether you think of wealth in terms of mindset or assets, it’s important to keep your financial and personal goals in your sightline as you tackle day-to-day life. The New Year is a great time to take a fresh look at your financial plan. Your Perspective Financial advisor would love to take the time to review it with you. Call or email us any time.

By |January 30th, 2018|Current Affairs, Financial Planning|