Consumer studies continue to identify health care and long-term care costs as top concerns. Advisors helping clients prepare for retirement need to be able to help clients address these issues. In these videos, Jamie Hopkins and Kishon Pinckney interview Peter Stahl, one of the leading speakers on this subject.
Health Care Savings Tools
In “Preparing for Retirement Health Care Costs,” Stahl provides an overview of the funding vehicles that can be used to fund retiree health care costs. Options discussed include Health Savings Accounts (HSAs), Roth IRAs, employer 401(h) accounts, and insurance products. What many of these tools have in common is the ability to pay for health care expenses in retirement without incurring additional taxable income.
Health Savings Accounts
In “Utilizing Health Savings Accounts (HSAs) in Retirement Planning,” we dive deeper into the use of HSAs. Stahl describes who can maintain an HSA, the tax implications, and how they can be helpful in retirement planning. For those who are eligible to contribute to them, the account can be held until retirement at which time tax-free distributions can be used to pay retiree medical expenses. Withdrawals from HSAs in retirement to pay health care expenses have a big tax advantage over withdrawals from an IRA, which are treated as taxable income, could increase Medicare premiums, and subject a larger portion of Social Security benefits to tax. The biggest limitation is that HSAs are only available to workers who choose an eligible high deductible health care plan. Contributions are no longer allowed once an individual is enrolled in Medicare.
Hybrid Long-Term Care Products
The video “Custodial Planning with Hybrid Long-Term Care Products” provides an overview of the hybrid long-term care products that are being used today to fund custodial care. If you haven’t noticed, these have become the dominant player in the long-term care insurance market. In 2015, only 105,000 traditional long-term care policies were sold while 220,000 hybrid policies were sold. Stahl focuses primarily on life insurance long-term care hybrids as these are the most popular. He describes how they work and who might be interested in this solution to financing long-term care.
Your Clients’ Retirement Income Education
Your clients all want to retire someday, and you want to help them reach their goals. But are your clients prepared to help themselves? A recent survey of retirement aged Americans revealed that nearly three quarters of those who took a basic retirement income literacy quiz failed it.
It’s important for financial advisors to be aware of the areas of retirement planning where clients need more knowledge. Many of your clients need more education or should revisit their conceptions of retirement income principles. Join us for a webcast where we will unpack the results of the 2017 RICP® Retirement Income Literacy Survey and give you the facts on America’s troubling lack of retirement income literacy.
This blog is part of a series by Professor David Littell, Director of the RICP® program and Co-director of The American College New York Life Center for Retirement Income. Each post in this series features a video or videos from the Center offering valuable retirement income planning tips for advisors and their clients. Many of the experts in these videos are featured in the RICP® program curriculum.
What Is The Bucket Strategy?
The bucket strategy is a way to think about asset allocation by conceptualizing a portfolio as a series of “buckets,” each of which contain assets of varying risk...