The Parent Care Dilemma
By Dana Sippel, CPA, CFP®
Caring for aging parents is a huge burden that catches many middle aged adults by surprise. Many times the care providers are still raising their own children and juggling work responsibilities when their parents require care. The demand for informal health care from family and friends is expected to double by 2050 as our society ages. The costs can arrive in terms of both time and dollars.
The Congressional Budget Office estimated that in 2011, informal caregivers provided over 11 billion hours of unpaid care and together with their elders, spent over $3 billion on community based care. These costs are over and above the traditional nursing home, continuing care communities and hospice care that cost $36 billion annually. Many of us at West Financial have witnessed first-hand our clients spending tens of thousands of dollars on care for aging parents or other relatives. So the question becomes, how can you most wisely manage the time and money required to care for your aging parents, friends and relatives? Here are several ideas to help ease the burdens:
Locate your own professionals and get involved in your family’s care. You can cut care costs significantly if you are willing to find health care professionals yourself, rather than working through an agency. An agency has administrative costs and builds in a profit margin that adds to the hourly rate. The median home health care worker pay rate through a licensed agency is $19/hour. Be aware that you need to perform diligent background checks and follow applicable federal and state laws for work hours, workers compensation and payroll taxes. If you decide to provide some care yourself, you may be able to claim care benefits on some long-term care policies.
Find the tax breaks. Many elder care costs qualify for a tax deduction as a medical expense. Expenses that normally may be taken on the parent’s tax returns, in some cases may be claimed on supporting children’s returns. In some situations, costs for home improvements that are considered medically necessary may also be deductible on tax returns. A portion of the entrance fees or ongoing costs for some continuing care communities may also be tax deductible.
Wartime veteran’s benefits. Special benefits are available to certain military personnel that served during wartime. Generally veterans must have served their country for at least 90 days and 1 day during a war to qualify. There are millions of families that are eligible for these benefits and many never make any claims. Be sure to check with your local State Veterans Affairs Office to see if you may be eligible for Aid & Attendance pension benefits.
Transitioning to a permanent facility. There may come a time in every patient’s care when a permanent long-term care facility becomes the best option. If a dementia issue becomes prevalent, or round-the clock care is required, you may want to consider a facility. With care costs approaching $20/hour, 24-hour care could come to $175,000 per year. At this cost, a nursing home may be a more cost effective solution.
Assisting an ailing parent, relative or friend can be an emotionally draining experience. If you have these concerns in your family, please give us a call. We have experience in these matters and a network of professionals to help get the care your loved ones require.
By Kimberly A. Cox, CFP®
With the U.S. health care landscape rapidly changing, one up-and-coming business model, especially in the Washington DC area, is the growing practice of “Concierge” medical care. This new, predominantly primary care, model goes by many names – subscription medicine, retainer-based medicine, membership medicine, and more. There are now over 200 concierge doctors in the DC area.
The structure of concierge medical practices vary in as many ways as they vary by name, but the basic format is meant to enhance the patient-doctor relationship by allowing physicians to care for fewer patients.
Concierge medicine requires an annual retainer or membership fee that is paid by the patient and is not covered by insurance. This fee varies widely, from $200 to $5,000, or more, per year. Some concierge practices are cash-only and do not accept insurance of any kind, however, most do take insurance but require personal payment for any services not covered by insurance.
Concierge practices can be a solo practitioner, a multiple doctor practice, or represent a network of physicians and provide a variety of benefits that can include:
We have heard multiple stories from our DC area clients who are having trouble finding primary care physicians who are accepting new patients. Joining a concierge service may be an answer if you are experiencing this troublesome trend.
The Importance of Setting Goals
By Glen J. Buco, CFP®
As 2013 comes to a close, I thought it would be helpful to review the importance of goal setting and the periodic review of the goals you establish. Goal setting is valuable in that the process provides focus on what you want to achieve in your life and helps you to steer clear of distractions. Setting lifetime goals gives you the overall perspective that shapes many other aspects of your decision-making.
The following broad guidelines will help you to set effective, achievable goals:
“What you get by achieving your goals is not as important as what you become by achieving your goals.”
Henry David Thoreau
Take Time for a Vacation
By Kristan L. Anderson, CEBS, CFP®
As I write this, I am hours away from a well-deserved (in my opinion) vacation from work. Paid time off is possibly one of the most coveted of employee benefits. So, it is curious to note how people often do not use all of their earned vacation time. Here in the U.S. we earn fewer vacation days than workers in most other countries. However, according to the Expedia® Vacation Deprivation® study, we tend to leave approximately two days unused on an annual basis. In contrast, French workers generally use all of their 30 days of vacation and respond that they still feel vacation deprived.
The reasons for not taking earned vacation time range from not being able to afford a vacation to feeling like taking time off may negatively impact employment. If an employer offers full or partial rollover of vacation time, people are more likely to not take all of their time for the year. A survey conducted by the Society for Human Resource Management (SHRM) indicates that 73% of employees with limited rollover plans will have three or more unused days each year. In comparison, employers with “use-it-or-lose-it” plans report only 36% of employees with three or more unused vacation days each year.
Certainly, time away from work can be stressful if you start thinking about all the work piling up once you are gone. In this respect, American workers are better able to disconnect from the office while on vacation. Approximately 67% report that they check emails and voice mails on vacation, versus 93% of French workers who regularly check in while on holiday. If you are able to disconnect, taking the time away offers multiple health benefits including contributing to higher positive emotional levels, less depression and lower blood pressure. Some studies indicate that women may especially benefit from taking vacations.
From a business perspective, taking time away from the day-to-day work activities gives the brain a chance to rest and think more creatively. The end result could be an innovative approach to a persistent work issue. Not taking your vacation time doesn’t necessarily result in greater productivity, either. Being physically present at your desk does not always mean that work is getting done at all times. Taking a vacation allows the body to recharge and leads to greater productivity. It also helps that U.S. bosses are generally perceived to be supportive of their workers taking vacation time.
Whether you take one or two long holidays, combine a long holiday with several shorter trips, or take many short holidays, it is important to incorporate time off for your mental and physical well-being. So go ahead and take that vacation and send us a picture. Buon viaggio.
2014 Retirement Plan Limits
The IRS recently announced cost-of-living adjustments to retirement plan limits. The following chart summarizes the relevant changes:
Should Senior Secured Loans be part of my investment portfolio?
Senior Secured Loans are a form of private debt financing made to medium to large-sized companies. Over the last ten years, this investment asset class has grown, creating a secondary market as well.
Here are some pros and cons regarding the Senior Secured Loans market:
At West Financial Services, we view fixed income as the safe, stable and more liquid income-oriented portion of your portfolio. Because Senior Secured Loans are volatile, low grade and leveraged, they do not meet our criteria for fixed income. However, we will consider adding them to specific client portfolios at the client’s request.