My True Story as a Caregiver

Sharing Stories

My True Story:

” I am sharing my story and my why with you, hoping that it will have enough of an impact for you to react. The only thing you can ever be certain about is that life doesn’t play fair. Proper planning for the low probability, highly impactful events can alleviate a little uncertainty, provide peace of mind, and at the very least, ease some afflictions.” 
– Ashley Nichols
Self love hug as esteem and confidence for being woman tiny pers

We all have a story that creates our why. Our stories mold us, build our point of views and provide a foundation for us to decide what, in life, is valuable to us. We then create our lives around those values and beliefs. This is what we call being reactive, which isn’t necessarily bad. It allows us to be more creative, react to new ideas, and make decisions based on newly-received information. The problem is, all too often, most of us live with the notion that tragedy or misfortune does not or cannot happen to us. It happens to other people. Until it strikes home and we’re unprepared. I am sharing my story and my why with you, hoping that it will have enough of an impact for you to react. The only thing you can ever be certain about is that life doesn’t play fair. Proper planning for the low probability, highly impactful events can alleviate a little uncertainty, provide peace of mind, and at the very least, ease some afflictions.

I grew up in an average middle-class household in Las Vegas, Nevada. Both of my parents worked full-time. My mother is a realtor, and my father was a Baccarat dealer for the better half of his career and then switched to Blackjack, or as he referred to it, Twenty-One. I grew up in a four-bedroom, three-bathroom house with three sisters, a fish, a lizard, two love birds, a dog, a cat, and the occasional injured pigeon that my younger sister would bring home to nurse. We owned two family cars. By society’s standards of the word “normal,” we were that.

My parents did many things to raise the four of us that I admire; however, if I had to list one thing, it would be that their children never wanted for anything. Sure, there was the occasional bratty melt-down at the grocery store because they said no to buying the candy or ice cream we wanted or the brand-new Nikes that just came out that my mother (dad usually caved) would always say no to because our feet grew way too fast. But what kid doesn’t throw a fit when they don’t get their way!? Nonetheless, we participated in every sport we wanted to be in without question. Every birthday and Christmas list made in that house was, dare I say, happily fulfilled. The kids were happy, at least! I can’t speak to how my parents’ wallets felt afterward. But I can, without a doubt, tell you that they were grateful to have had the opportunity to afford us the kind of childhood that they, themselves, did not experience. We weren’t rich, we were merely comfortable, and my parents worked hard to ensure it stayed that way.

And then, as “normal” families do, my parents divorced when I was seventeen. My father suffered from COPD for a couple of years before the divorce and finally had a double lung transplant shortly after their divorce concluded. It was that pivotal moment in time; for the first time, I was able to see my parents as people. Often, we hold our parents on these pedestals and expect nothing less than perfection from them. They must keep it together at all times because…because we simply can’t see them in any other way. We forget they are also just people navigating life the best they know how. They experience trials and tribulations, sadness and defeat. And with that, I watched my father slip into a deep depression after the divorce and surgery and simultaneously watched my mother become a single parent. Because mentally, my father couldn’t be there consistently.

The crash of 2008 was soon upon us, and my mother’s career came to a sudden halt. This year had a significant impact on real estate agents, but real estate brokerages also suffered. The brokerage where my mother held her license decided to make a “cost” cut. That “cost” was my mother. The verbiage in her contract read that should she leave or be asked to leave the firm, the properties that she managed, even the ones she had procured on her own, were to stay with the firm. She was now a single mother left to build her business back from nothing in the middle of one of the largest economic downturns since the Great Depression. What did she have to fall back on? A small amount of savings kept in a regular savings account and credit cards. That was the extent of her financial planning.

…where my mother held her license decided to make a “cost” cut.

That “cost” was my mother.

On the other hand, my father was fortunate enough to keep his job and continue work. However, he dissolved his entire 401k in fear of the market crash. The one major rule that we instruct our clients to NEVER do is to pull out of the market when it’s down! Ergo, my father violated the number one rule of investing. Soon after, due to my father’s depression, health issues, and what we now know was the early onset of dementia, most likely not fully cognizant of what was happening at the time, the bank foreclosed on his property. By the time he told me what was happening, he had one week to move out. I frantically drove my dad around town, trying to find him an apartment to rent. Because of his now less than acceptable credit, I also had to co-sign for him on a new place. I then had 48 hours to rent a U-Haul, grab one of my sisters, and move as much of my father’s belongings as possible before his home was sold at auction. Needless to say, we didn’t get everything.

A few years passed that were seemingly ok. He still suffered from depression but was managing, or so I thought. One night, I received a call that would drastically change our lives. The hospital called to inform me that my dad had been in an accident. I rushed down to the hospital and was told that he was experiencing acute hyponatremia. Basically, his sodium levels were critically low, and it had most likely caused a seizure while he was driving. He had not been taking care of himself, had not been taking his anti-rejection medication required from his lung transplant, and drinking heavily. I also found out that his place of work had terminated him earlier that day for “strange behavior.” For those as unfamiliar as I was, he described it as a “fishbowl” like perception where nothing really makes sense. He simply couldn’t understand what was
happening because of his health.

The hospital discharged my dad, and at that point. He had no job to return to, and his dementia was progressing, forcing him to retire. He was 63. So here we were. After growing up in a household where money wasn’t an issue, it now seemed to be an issue. And how quickly and drastically things changed after that. I was now my father’s caretaker. At twenty-four, I sat at his dining room table, trying to navigate the dreaded Social Security/Medicare System. After waiting on hold for what felt like an eternity, I finally reached someone on the other line. Half listening to the customer service employee, I was finally able to ask the most crucial question, “How much will he be making?” My jaw near touched the floor when she responded, “Ralph will be making $1800 a month.” Suddenly the little light I thought I would be seeing at the end of this long dark tunnel disappeared. My father’s rent alone ate up half of his monthly benefit. That left $900 for groceries, medications (anti-rejection medication is not cheap), his car payment, car insurance, cell phone, utilities…I could go on, but I think you understand that it wasn’t nearly enough.

Anything he couldn’t afford, I made up for it. It was not easy, but he was my dad, and I would make sure that he was ok.

I remember sitting at that table feeling overwhelmed and helpless. It didn’t matter that my dad had consistently brought in $6000 a month or more while he was working. He would not be making that now, nor did he have an option of going back to work. He had no retirement, no savings; there was no coffee can hidden in a cupboard with a rainy day fund. Remember that 401k I told you about? Yea, that had been gone since 2008. Oh, and by the way, social security decided to stop paying him for six months at one point to add to everything else. I, still to this day, could not give you a comprehensible explanation for why the payments stopped, and neither could the social security department. What was even more incomprehensible to me was realizing that if my father didn’t have a family that he could lean on, he would have been homeless for at least six months. 

The question presented itself, how many other seniors have found themselves in my dad’s situation? By the grace of God, I was in a position where I was making enough money that I could help him. Anything he couldn’t afford, I made up for it. It was not easy, but he was my dad, and I would make sure that he was ok. I was pretty much my father’s supplemental income from there on out. As he aged and his health deteriorated more, I moved him into a senior 55 and older apartment complex. He was pushing 70 at this time. He was so mad at me for making him “live with “old” people”! My dad was funny and the comedic moments made things a little lighter, but as he aged, things got harder.

I got into law school and had to move away. I now would not work for one year. However, I still had to be my father’s supplemental income and caretaker. I would drive back and forth from San Diego to Las Vegas to take him to his doctor’s appointments; I had to find creative ways to remind him to take his medication, coordinate when groceries would be delivered to him, etc. I cannot tell you how we managed that, but again, we did it by the grace of God.

A few more years passed, and I continued to care for him. Then in November of 2019, a week before Thanksgiving, he suffered a stroke. His health never recouped after that, and I was forced to put him in a nursing home where he could be adequately cared for. He hated every minute of it, and so did I. The last thing you want for your parents is to take away their independence. His dementia worsened, his health diminished, and my father died after being taken to the hospital on June 23, 2020. He did not have life insurance. His funeral was the last thing I paid for.

My dad was my best friend. I don’t tell this story to make you feel sad or pity me. I love my parents dearly, and if I had to do it all over again, I would. I know they would have done the same for any of their children. The lack of financial planning doesn’t only create a problem for the individual; it also has a substantial impact on your loved ones. What if things were different? What if there was a savings plan, life insurance, disability insurance, and a financial strategy? What if my parents came across an article like the one you are reading now, and it created the awareness needed for them to react and realize that life, in fact, does not play fair? There are a lot of “what ifs,” and it’s my job to eliminate those what-ifs for my clients.

So, how do we make a plan? Everyone’s financial picture and overall goals are going to look different. However, where we start is pretty standard.

First

Get very clear about your balance sheet. Figure out what you own and what you owe. The number one answer I get as to why some don’t do this is, “I don’t make enough” or ” I don’t have enough.” You do not have to be raking it in to identify these two things. It is essential to know what you have. Once you have a clear picture of this, you can decide what you want your future balance sheet to look like. Then, identify short, mid, and long-term goals. It is critical to be very clear about how you want our money to work for you.

Second

Identify what forms of asset protection you have in place and what you think you need. Think of asset protection as the roof over your balance sheet protecting what you are building. You wouldn’t have a house without a roof, so why should your balance sheet be any less protected? Umbrella insurance, life insurance, disability insurance, and overall estate planning are some of the things you want to look for. Once you identify what you have, you can locate the holes you may have in your roof.

Third

You want to identify what your cash flow looks like. How much are you bringing in for the year before taxes? Ideally, the goal is to save twenty percent of your gross income. Don’t worry if that number seems too large at first. Twenty percent is what we are working towards; it is not where we have to start. It is also not a hard cap. If you feel like you can and want to save more, that is a personal preference.

Finally

Create a budget sheet to know your fixed and variable costs each month. It is advantageous to see what you have left after your expenses. You can now identify where you might be overspending and what you might be able to cut back on.

These four steps may sound obvious and trivial, but they are crucial to creating an efficient financial plan. I have found disorganization to be the biggest proponent of stress and confusion, which leads to a paralysis of financial decision-making. A clear-cut picture of your net worth, protection, and cash flow can indicate where to pivot next.

We share our stories in hopes that they will impact others. I hope this article encourages you to act.

 

 

 Ashley Nichols J.D.

Ashley Nichols J.D.

Financial Planner

 In analyzing where my strengths lay and where I thought my time would be of most value, I realized that most are in need of financial planning and guidance. That is when I decided to pursue finance and is where my passion thrives. My responsibility as a financial representative is to ensure that my clients have an understanding of where they are today financially and to assist them in creating a roadmap of where they want to be, whether it be in the near future or long term. 

We will provide you useful and timely information you can use to be #financiallyfearless

5 Ways Women Can Support Their Financial Health Long-Term

Purse Strings Approved Professional

Blog Series

5 Ways Women Can Support Their Financial Health Long-Term

Self love hug as esteem and confidence for being woman tiny pers

Women’s contributions to society are boundless. But even as they continue to trailblaze the labor market and find greater financial power, one critical wildcard remains—longevity.

On average,

      • Women earn less than men—about 82 cents to the dollar, according to NBC News.
      • They are more likely to take breaks from their career for child support and/or caregiving, resulting in an over 1 million dollar gap in lifetime earnings, according to Merrill Women and Money report.
      • Women are also expected to live longer than men, according to the CDC.

Looking at these facts, something doesn’t add up.

The impacts of COVID-19 on schools, childcare, and work, have caused even further setbacks for women in the workplace. Overall, women have lost a record 5.4 million jobs throughout the pandemic—1 million more than men.

It’s essential that women find long-term financial stability and wellness. But how can you plan for longevity when it seems like the odds are stacked against you?

Our TFS team would love to walk with you on this journey and help you build a plan completely tailored to your unique situation. Today, we’re going to explore avenues for women to consider longevity in their long-term financial plan.

How Does A Longer Life Expectancy Impact A Woman’s Financial Plan?

According to the CDC, the average life expectancy for women is 80.5—about 5.5 years longer than men! This data suggests that it’s rather likely that a woman will outlive her spouse. It’s also likely that women will be the primary caregivers for their spouses.

That’s roughly five extra years of living expenses, healthcare, lifestyle needs, taxes, and more, all of which could be supported by one income instead of two. Social Security benefits alone will be reduced by at least ⅓ and possibly up to ½. This presents several important considerations and potential lifestyle changes.

The impact on your lifestyle rests on several moving pieces:

      • Your investments (401k, IRA, brokerage, any inherited accounts, etc.
      • Insurance policies
      • Healthcare needs
      • Social Security
      • Pension income
      • Retirement goals
      • Spending habits
      • Estate plan

Longevity predictions should be baked into your and your spouse’s retirement plan from the start. Doing so will help each of you prepare to take care of the surviving spouse. Planning early can help mitigate financial stress and uncertainty in the future. Let’s dive into the top ways that women can prioritize their financial health throughout retirement.

1. Consider Your Health—Physical and Fiscal

Physical health is an essential component of longevity planning. Everyone’s health situation is different and should be accounted for on a case-by-case basis. Some elements that could impact your health long-term are:

      • Current health and underlying conditions
      • Family health history
      • Lifestyle habits

Staying active in retirement is an excellent way to promote your health long-term. Even so, it’s expected that 70% of people 65 or older will require long-term care at some point, and in Washington, such care doesn’t come cheap.

Most recent data revealed that the average cost of nursing homes in WA runs at $266 per day—a solid $38 higher than the national average. With the average stay in a nursing home running 28 months, you’re looking at over $210,000 in nursing home expenses alone. That’s almost $30,000 more than the average 401(k) balance at 70—$182,100.

All that, and an AARP study also found women comprised over 70% of residents in nursing homes, making long-term care a critical consideration for women.

Those numbers aren’t counting any other long-term care requirements like home caregivers before or after the nursing home stay and other medical expenses like surgery, ongoing treatments, or regular Medicare payments.

Healthcare costs and funding can easily absorb a significant amount of your nest egg, making it necessary to properly plan for. All of these numbers lead to one question:

How can you pay for it?

Tips To Prepare for Long-term Care Costs

      • Long-term care can be funded from multiple sources.
      • Long-term care insurance
      • Personal investments
      • Medicaid

There is another option for Washington residents. The state recently passed an initiative to create a publicly operated long-term care insurance program. How will the state pay for it? They’ll issue a new tax. Starting January 1, 2022, W-2 employees will be subject to a 0.58% payroll tax on all earned income. The tricky part about this tax is that there is no income cap, so all earnings for W-2 employees will be subject to this new tax.

Is there a silver lining? If you have your own long-term care insurance policy, you can opt-out of the tax and the program.

Keep in mind that everyone’s situation will be different and that these are simply general ideas to consider as you look at how long-term care could fit into your longevity plan.

Long-term care insurance can be a good way to bring flexibility and options to your care plan. We like to view it as a supplemental tool to your other retirement resources. It may not cover the full cost of your care, but it could go a long way to preserving your nest egg, future inheritances, and other retirement assets to support your desired lifestyle.

But long-term care insurance can be costly and isn’t right for everyone. Generally, our rule of thumb is that if the premiums consume more than 7% of your income, it’s too expensive.

For those with robust retirement resources, they may be able to divert some funds from their nest egg to pay for the cost of care.

While Medicare doesn’t cover the costs of long-term care, Medicaid can kick in should you qualify. In many cases, qualifying for Medicaid means dipping into nearly all remaining assets and as such might not be an option you want to rely on.

Keep in mind that states have “spousal protection” provisions that allow for a healthy spouse to retain more assets. It’s designed to help people keep enough for living expenses while also allowing their spouse to receive long-term care via Medicaid.

2. Create a Social Security Plan

Building a strategic Social Security plan with your spouse is vital for longevity planning. Social Security benefits are based on lifetime earnings and indexed for your highest 35 working years.

What if you don’t have 35 years in the workforce? The Social Security Administration inputs a “0” in your formula, which can have drastic impacts on your full benefit amount. This can affect women who may have taken time away from work to raise their children or care for a parent or relative.

For married couples, Social Security planning is critical. Our team can help you build a plan that maximizes the surviving spouse’s benefits. Survivor benefits are among the more complex elements of Social Security. Let’s take a look at the basics.

A widow or widower qualifies for survivor benefits if,
They are at least 60 years old
Have been married for more than 9 months before the time of death

There are several exceptions including if you have a disability or if you’re caring for a minor child—which allows you to apply earlier.

Survivors are eligible for 100% of their late spouse’s benefit should they claim at full retirement age. Claiming before full retirement age results in a reduced benefit. If you were receiving spousal benefits, the SSA will likely automatically switch to the survivor benefit once the death was reported.

It’s important to note that you won’t receive benefits both off of your work record and survivor benefits—the SSA will pay the higher of the two amounts.

While implications are complex and vary greatly from couple to couple, below are some general guidelines to consider.

Maximize the higher earner’s benefit.

Consider a restricted application—file for the lower benefit first, then switch to the higher at 70. While this type of application was removed from spousal benefits, it’s still a viable option for survivor benefits.
We know how critical Social Security planning is for longevity. Moving from two benefit checks to one can cause a dramatic drop in benefits—likely more than many people anticipate. It will reduce your benefit anywhere from 35-50%, and the discrepancy is worse for couples with similar earnings. Our team would like to help you make a plan for Social Security benefits throughout retirement.

3. Prioritize Your Investments

Women are strong investors. They tend to be more values and goals-based, save more, maintain realistic expectations, seek counsel when needed, and take a long-term view of their portfolio’s performance, according to a Fidelity study.

While women are steady investors, they tend to face several financial obstacles when it comes to retirement planning. A Merrill Lynch benefits report found that women enter retirement with an average of $70,000 less than men. This could present a significant challenge as they are also positioned to outlive men by about five years.

Women need to prioritize their investments to and through retirement. A strong investment plan tailored to your goals, values, risk tolerance, and more can put you in a better position to support your lifestyle longer.

Women also tend to be more risk-averse than their male counterparts. While risk is inherently personal, a certain amount of risk is necessary to sustain a 30+ year nest egg.

We’d be remiss to talk about longevity and not bring up inflation. Your portfolio needs to consider the impacts of inflation on your total nest egg. $1 today certainly won’t equal $1 10 years from now, making it critical that your portfolio is positioned to withstand the effects of inflation.

It’s all about building intentional portfolios and creating a withdrawal strategy meant to stand the test of time.

4. Account for Changes In Spending and Goals

According to Fidelity, 60% of women are concerned about outliving their retirement savings. This is a common fear among many pre-retirees. How can women prepare their finances to last well into the future?

Let’s take a look at a few ideas.

      • Avoid spontaneous overspending early in retirement
      • Know spending goals and habits
      • Create a strong cash flow plan

Consider lifestyle changes should you outlive a spouse—downsizing, moving to a retirement home or closer to family, etc.
Preserving your nest egg is all about maximizing the resources available to you. We’d love to help you build a plan that works for you.

5. Work With A Team You Trust

Planning for a long life is a beautiful, exciting, and sometimes challenging experience. It’s critical to know that you don’t have to undergo these life transitions alone. Our team at TFS is positioned to guide you through life changes and help bring confidence and clarity to your money.

Is your retirement plan built to support your life? Let’s talk about it together.

Dale Terwedo, CLU®, BFA™, CFP®, ChFC®, CPRC

Dale Terwedo, CLU®, BFA™, CFP®, ChFC®, CPRC

Certified Financial Planner and Founder, TFS Advisors

You may be wondering how your lifestyle will change as you move through retirement, and how to create a plan that reflects the lifestyle you want during this new chapter in your life. Things may feel unstable as you gear up for retirement, and we’re here to help provide clarity and understanding to your situation. Our goal is to empower you to be self-sufficient in your role as the “CFO” of your household, while also freeing you up to spend your time and energy to enhance, protect, and focus on your family, community, and interests.

We will provide you useful and timely information you can use to be #financiallyfearless

The Basics of Long-Term Care

Purse Strings Approved Professional

Blog Series

The Basics of Long-Term Care

HSA Heath Savings Account

New York Life Insurance Company and New York Life Insurance and Annuity Corporation

Aging is a fact of life and it comes with certain realities. While most of us probably don’t want to picture ourselves eventually needing help with daily activities, more than half of Americans turning 65 today will need some type of long-term care during their remaining years. As this type of care is not generally covered by private health insurance or Medicare, it’s important to create a plan to help protect yourself and your family from the financial and emotional impact of a possible long-term care event.

What is long-term care?

Long-term care encompasses a variety of services that assist those who can no longer perform everyday activities on their own. These activities, known as activities of daily living (ADLs), include dressing, eating, and bathing. A chronic illness or a physical impairment can lead to a need for long-term care, but it’s most commonly needed as the result of a cognitive issue, such as Alzheimer’s disease. Care services can be provided in the home, a community setting, or a facility such as a nursing home.

How much does long-term care cost?

On average, women need about 2.5 years of long-term care and men an average of 1.5 years. The national average for a home health aide is $23.27 per hour (so for example, 20 hours of care per week would cost more than $24,000 per year), while a private room in a nursing home averages $103,660 per year.

Long-term care costs can quickly add up and can have a significant impact on your retirement and the assets you’ve worked so hard to accumulate. Understanding the various long-term care planning options available is critical to helping you put a plan in place to ensure you have access to the type of care you prefer while protecting your finances.

How to plan for long-term care.

Depending on your age, health, means and needs, there are several ways to address long-term care.

Long-term care planning options:
    • Standalone or traditional long-term care insurance plans generally provide the most robust long-term care coverage based on the premiums paid, can be customized to suit your needs, and offer the option to receive care at home, in an assisted living facility, or a nursing home.
    • Linked-benefit or hybrid plans combine long-term care insurance with life insurance, providing broader coverage and greater flexibility usually at a slightly higher price point since you are insuring multiple risks.
    • Riders, such as chronic care riders on life policies, offer the most basic coverage, allowing a portion of the policy’s death benefit to be accessible should you become chronically ill.
    • You may be able to pay for long-term care out-of-pocket (self-fund) if you have significant assets. While this may be an option for some, it’s often valuable to weigh the benefits of private insurance versus self- funding as there are additional advantages that come with private insurance including care management and risk sharing, which can benefit you in the event of a catastrophic long-term care event.
    • Medicaid does cover some long-term care services (unlike Medicare, which most people are surprised to learn does not cover long-term care) but you need to spend down most of your assets to qualify and you need to receive care in an approved facility.

When to start planning for long-term care

Health and age are key factors used in determining eligibility and rates for private long-term care solutions, so it’s best to explore these options when you are in your 40s and 50s.

It’s never too soon to start planning for long-term care. The peace of mind you’ll have knowing you’re protecting your family and retirement can be an important benefit of creating a plan, even if you elect to just protect part of your risk with a smaller amount of coverage.

Roger Silvera, LUTCF®FSCP®

Roger Silvera, LUTCF®FSCP®

Agent

We will provide you useful and timely information you can use to be #financiallyfearless