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In Joyful Hope

Financial

Preparing for the future requires preparing financially - for your own care and for what will happen to your material blessings after your death. 

This is not financial advice, but may give you some things to consider as you work with a financial advisor.

Questions to ask your financial advisor

Benefits:

  • Social Security - When you are eligible, start with the website and create a Case ID.  Once you have your Case ID, make an appointment with your local SSA Office.
  • Medicare - After reviewing all possible Medicare and Medigap/Supplemental Plans, you may want to consider working with a local, reputable health insurance agent to review your particular situation to determine the optimal Medicare and Supplement Plan.
  • Medicaid - Review this site to see if, how, and what it means to qualify for Medicaid.  Check out AARP's tool for Medicaid in Maryland or any other state.
  • Group Health Care and/or Long Term Disability - Are you eligible for group health care or long-term disability due to former employment, military, or spousal benefit?  Review all former employer benefits to verify whether you and your family are eligible for retiree health care and/or long-term disability.
  • Existing Long Term Care Policy - If you have an existing long-term care insurance policy, review the terms of use with a local, reputable health insurance agent.
  • Long Term Care Policy - Visit this site and review steps 8-11 of the book for considerations on purchasing a new long-term care policy.

If there are still outstanding expenses beyond what these cover, you may want to consider these family resources:

  • Does your loved one have an existing life insurance policy?  It may be convertible into a long term care policy.  This may reduce current expense but the value may be significantly lower than the life insurance death benefit.
  • Home Equity Line of Credit (HELOC) - Assuming you have at least 10% equity in your home, applying for a HELOC should provide you the lowest comparable interest rate to borrow against to meet expenses.  nb: A HELOC is a variable rate loan tied to the Prime interest rate (currently 3.25%) and interest rates are expected to increase in the coming years.
  • Dependency - If you provide > 50% financial support to your elderly/disabled family member, it may be tax-effective for you to declare him or her on your tax return as a dependent.  This will provide an additional exclusion ($3,950 tax credit in 2014) as well as a possible increase in itemized deductions due to medical costs (above 10% AGI limit).  For more details, please consult your tax advisor.
  • Gifting - If you are not declaring your loved one as a dependent (providing <50% support) and you have taxable securities that are highly appreciated (+1 year), it may be beneficial to gift these securities to your elderly/disabled family member if he or she is in a lower tax bracket.  For more details, please consult your tax advisor.

 Other steps you may want to take:

  • Purchase a "2nd to Die" Life Insurance Policy - This policy protects your dependents in the event of your death.  If you have a spouse, consider the 2nd to Die; if you are single, consider the Straight Life Policy.  How much will it cost to replace you and your income?  This is a very important consideration and often the most important and responsible step to take care of your dependents.
  • Update your Estate - Make sure your wills and Advanced Directives are fully updated and accurately reflect any changes.