S1 E15-Long-Term Care Planning: Protecting Your Future with Alecia Barnette
In this episode Jess sits down with Alecia Barnette, who is the Senior Vice President at Financial Independence Group. Alecia shares her personal journey into the business, driven by a desire to protect families from the emotional and financial strains of unexpected care needs. Through personal anecdotes and expert advice, she highlights the importance of proactively planning for long-term care, emphasizing the need for comprehensive plans and alternative options like asset-based long-term care. She also addresses the significance of educating financial professionals and clients alike, urging them to have open conversations and consider insurance solutions for their future.
Highlights:
It’s so important to practice proactive long-term care planning to avoid the financial and emotional consequences of unexpected care needs.
When it comes to long term care a lack of planning can often tear families apart
It is vital for financial professionals to educate themselves and their clients about insurance solutions for long-term care planning.
There are many benefits of asset-based long-term care plans, which offer flexibility, tax-free benefits, and the ability to pass on unused benefits to children or charity.
Contact our guest:
https://www.linkedin.com/in/alecia-barnette
twitter- @aleciabarnette
Guest's Email:
alecia@figmarketing.com
Transcript:
Jessica Weaver 0:02
Hello money greens. Hello listeners, welcome to Women behind the millions. I am your host, Jessica Weaver. And I am so excited because we are going to be talking about probably something that we don't want to think about. But it's always on our mind. It is always on our mind. We have Alecia Barnette with us today, she has been over 25 years of experience in the care planning industry. So yes, we're talking about long term care today ladies. She assists the leading financial planners and professionals to help them implement long term care into their practice. So we're gonna get kind of a behind the scenes of the support that us as advisors get so that we can best support our clients and investors of people that we serve. Her main purpose is to assist financial professionals in protecting their clients, their families, from both the physical and the emotional consequences of unexpected care needs. So thank you so much for being on here today, Alecia, this is a good one.
Alecia Barnette 1:01
I'm excited, I really appreciate it. And it's a passionate topic that I have, making sure that your clients are prepared for that unexpected loss of a long term care event. So excited to be here. And thanks for having me.
Jessica Weaver 1:13
This is a topic that is on the minds of most of my clients I work with especially alot of single women because they're up against well. What about me, what happens to me if I'm at that point, and financially, I can't take care of myself, physically, mentally, I become dependent, or how many times are the women the caretakers?
Alecia Barnette 1:35
I would say the women are caretakers more than they're not the caretakers. And thats one of the reasons that women especially need a plan in place because someetimes taking care of others will make you chronically ill as well and that leaves you with no one to take care of you when the time arises. So as far as women being caregivers as well , I can give you a great example of what care might look like. I am the oldest daughter and closest proximity of my mother who is single, uh she's been twice deceased I have 3 other siblings and she got COVID last year and I'm an hour and fifteen minutes away. I actually took off work, drove every day for two weeks to go feed her, go take her medication, to look through you know the glass door to make sure she was okay. My brother who was 10 minutes away times and my other siblings who are over 4 hours. Ask me how many times my brother Jessica came over to help my mother. Zero times. I love my brother, I would say that in front of him, as well, he you know, he knows, he knows he's not a caretaker, he'll go over and change the lightbulbs, fix electrical problems and things like that. But that's oftentimes, you know, oftentimes what it will look like when someone needs care, you know, your life doesn't end someone else's does. And especially for us working females who you know, might have to give up their careers any decent child would feel obligated to do. So really it is it's about it's a love insurance, it's about taking care of your family, and making sure that you have someone to provide the care
Jessica Weaver 3:16
A love insurance. That's a great phrase, you bring up the medications. And that's something that you don't think of right away. But that's probably the most important piece is making sure they're taking the right medications at the right time, or that they actually are even taking them at all during those kind of situations. But we often share some statistics with our ladies during events, things like that, but 80% of nursing homes are women, I believe 70% of long term care claims are women, 80% of the caretakers end up being women. So the statistics are not on our side in the event of needing long term care in the future. So instead of avoiding it, we're gonna dive into that topic today, but I'm curious first, Alecia, what got you into this space and wanting to help serve financial advisors so that we can best protect our clients?
Alecia Barnette 4:08
Absolutely. So it's kind of funny, my dad was in the business and I said I would never ever do it kind of similar to you. I was like, I'll never do this. And here I am, you know, over 25 years later, one of the reasons that I got into the business, I was helping him part time and I really just became passionate about you know, the subject matter and ended up leaving my profession and staying in the business. But most importantly, I think one of the, I guess, profound reasons is I saw how it affected my family. Both of my grandparents needed care. They were both single, their their husbands had pre deceased them. And I just watched it just destroy lives. My my grandmother on my dad's side needed care for eight years. And yes, and I watched my mother take care of her mother. And it caused, you know, it caused some some issues between the siblings because my mom took on, you know, a lot of the caregiving, she didn't have a plan. And so her plan was my mom. So it just I've seen it destroy a lot of people long term care doesn't bring families together, it tears families apart. And for that reason, I try to go out and educate as many people as possible and help them as well.
Jessica Weaver 5:24
Yes, how many times when you're meeting with those people, because I know you meet with advisors, and you present to their clients, the people that they're working with how many times the people who are most interested have had a loved one go through it?
Alecia Barnette 5:38
I would say it's definitely more often than not, more people are motivated when they go through a care experience. It's either that or, you know, maybe they're not healthy. And unfortunately, if you're not healthy, it's too late. So you know, you are if you're touched by long term care experience its definitely a motivator, because you see the physical and emotional consequences and financial consequences.
Jessica Weaver 6:00
And you don't want to have to do that to your children. Or if you don't even have children, then relying on, you know, just tossing it up in the air and seeing who's going to be there to support you isn't the best plan to have in place, and what a vulnerable state, it can leave you when you don't have a plan, you don't really have anybody that you can rely on or you just feel like a burden to you. That it can be such a vulnerable state.
Alecia Barnette 6:29
Absolutely. And you'll lose your choices too. Because if you don't have a plan in place, whether that's an insurance plan, or just a plan, knowing where you want to receive your care, who you want to provide the care, and then you're you're having to reactively plan when the time needs it. First of all, it makes it harder, because you're going through an experience, you're, you know, it's like trying to buy homeowners insurance, when your house is on fire, it's always you know, you can't do that. So preparing is important, especially knowing where and who you want to provide the care and how you can avoid some of the pitfalls of not having a you know, preparation, or a plan in place at the time.
Jessica Weaver 7:10
It sounds like you're trying to be more proactive than reactive too, well, my mother just had a fall, or we just got a cancer diagnosis, or now we're dealing with Alzheimer's. And now we're trying to pick up the pieces as we go, which I was just talking to a client and her father has Alzheimer's, Alzheimer's, he always handled the money. So now they're going back to see, well, some bills were double paid, some bills weren't paid at all. What in the financial, while teaching the mother who's never handled the finances before in her life, giving her some tools to grasp onto that and today we're in a virtual world. She grew up with the checkbook, paper statements. Now it's all virtual, huge learning curve there on top with figuring out how to manage her husband who has Alzheimer's and it's getting worse and worse. So Alecia, what would be the components of having a plan for long term care? What does that entail?
Alecia Barnette 8:06
Absolutely. Well there's a couple of different ways, excuse me, ways to mitigate against the risk. There is traditional long term care, and what we call asset based long term care. And I like to use the analogy, owning your contract versus renting it. So you know, traditional long term care is the cheapest way to buy the most amount of long term care benefits. And those benefits are going to cover homecare, assisted living, nursing home, adult daycare, hospice, we're going to cover all of the different types of care that you might need to receive and help, obviously pay for those and give you more choices. And then you have the alternative types of plans called asset based long term care. So again, I like to use the analogy renting versus owning. Traditional is not bad but if you don't use it, you lose it. Sometimes the rates can go up and there's no exit strategy. These alternative, yes, and these alternative plans that you can use are fantastic. They're there, the government has allowed certain life insurance or annuity contracts to be accessed while alive tax free for those same type of benefits. And then if you don't ever use it, someone's going to get a benefit, whether that's your children, whether that's your favorite charity, it's not going to be wasted. And it's going to still provide those same choices.
Jessica Weaver 9:23
Is that where you see the trends going more and more are the these are the more innovative products as they I get the same complaints. Well, what if I never use the long term care insurance? It's kind of like disability insurance. Well, if I'm never disabled while I'm working, that's the hedge. That's the protection that we have in place. Do you see more people going towards these hybrid models where it's a life insurance annuity combination?
Alecia Barnette 9:49
Absolutely. And I've seen that trend. It's probably been progressive over the last 15 to 20 years. Historically, it was all traditional because there weren't these new innovative products, but over the years, we've seen, you know, these massive rate increases. And and that's painful, especially for people on fixed incomes. And again, you know, if you wake up an angel and you never need any care, there's no benefit and that that bothers people. So, yes, I would say of all the policies that that your clients buy, I would say, 90%, are the asset based long term care products for those alternatives to traditional long term care, because of the value proposition you get with them.
Jessica Weaver 10:34
Yes, unfortunately, there is a guarantee that we will pass away at some point. So like you said, somebody's gonna get something for the money you put in there. Also when we hear a lot, especially with the traditional long term care, the complaints are right, what if I never use it, they can increase my rate. So it's hard to put into an overall retirement plan, when there's this variable of how much the policy is going to cost you down the road. And now you're in retirement, and you don't want so much of your annual budget going towards this policy anymore? You'd rather use that let's be honest, to travel, to do something with your house, have some fun.
Alecia Barnette 11:12
Absolutely. I agree. 100%. And one of the things too, you have to be concerned with, if you have a traditional plan is if those costs do go up, and you can't afford it, then typically, people are going to have to drop their policy, or they're going to have to reduce their benefits. And then it defeats the whole purpose of having the plan.
Jessica Weaver 11:31
Now its a watered down version of what you needed in the first place. That's a good point, Alecia. When should people start thinking about these kinds of policies?
Alecia Barnette 11:40
Absolutely. You've never been younger and healthier than you are now. So you know, I always say the younger you are, the healthier you are, and really, the less expensive it is. So you know, some people say 60s, absolutely not. The younger you can buy these policies, the more cost effective they're going to be. That's not to say if you're if you're older, which 60 is young, but if you're even in your 80s, there are solutions. So, you know, again, I recommend, I recommend younger, but there are still solutions available, just know that the older you are typically the more health ailments that you have, and less options available at those older ages.
Jessica Weaver 12:17
Sure, sure. And let's think about it this way, it's not like we're sidelining this money for long term care, because it's in a life insurance or annuity, it's so put to work for you, it can still grow. And you can use that money, whether it's for long term care or as an inheritance or to live off of if you end up never needing long term care. So just know that the money is still going to be working for you its not sidelined anymore, or just kind of wasted as an expense. And we talked about multitasking our money where we give every dollar in our world more than one purpose. So I love these products, because it's doing just that. One, it's helping to grow your money, it's also helping to protect your money if you do need long term care or to pay for long term care, it could be an inheritance, a lot of them have some tax benefits to them as well as the money is growing, or as an inheritance depending on what kind of product you use for it as well. So this can cover a lot of different purposes for $1 of your hard earned money.
Alecia Barnette 13:22
Absolutely. And it's definitely as you said, there are there are tax benefits. And there's this is a more tax efficient way to really pay for care. Because if you don't have a plan, your money is your plan. So you know, they asset still on the balance sheet, if you live in need long term care, you have benefits. If you wake up an angel and you don't need long term care, someone has a benefit. And if you change your mind, you have that exit strategy. So it's really an effective way a better way to self fund the rest.
Jessica Weaver 13:51
How do you see advisors approaching their clients in regards to this topic, because it is a very emotional topic. It's kind of like trying to get our clients to do estate plans where some people they they view if I think about this then I'm manifesting it to happen to me, it's an omen, it's gonna happen. How do you see advisors approaching their clients about it?
Alecia Barnette 14:13
Absolutely. So, you know, statistics probably everybody's heard them. Well, you gave a few at the beginning. And the statistics really say that 70% of people over the age of 65 are going to need care. One in five, check this out, will need care five or more years. Here's the problem. Yeah. Here's the problem, though. Most people are think they're in the 30%. So they don't put a plan in place, which is why it is so important to talk to your clients and make sure they have a plan in place. Because again, this is this is more of, I guess, Family First, finance second, but it's an important conversation to have because you're protecting your clients against the catastrophic loss of a physical and emotional care need. And so we try to educate people one of the things things that I do is I come and I do educational events for your clients, so that we can educate on why you need it, how you mitigate the risk and things like that.
Jessica Weaver 15:11
Yes, that's huge. The education and awareness is key. And understanding what are the true costs because every state is a little different. I'm in New Jersey, and the nursing homes can be 10 to 15,000, a month, a month, for those who are listening. And those of you who have witnessed this with your loved ones and know, and have seen the price tag that is associated with it. So looking at, based on how many assets I have, right now, how long could I even survive in a nursing home, assisted living, and then if I have a spouse, well, they need money to live off of if you're in a nursing home, or if you pass away, they still need assets to live off of. So integrating this into the plan. And like I said, 70%, that's those are high odds. And the average is the average stay still two to three years?
Alecia Barnette 16:02
It is, so just keep in mind that that's facility care. That is not home health care. So when you hear those numbers, they're kind of skewed, because they're typically for those statistics are from Medicare, Medicaid, and that doesn't include home care costs. So
Jessica Weaver 16:17
People start the home first, usually, and they
Alecia Barnette 16:21
Absolutely, and people that have plans Jessica are 90%, 90% of them start in the home, because it keeps you in the home longer, because you feel like you have the ability to again have more choices with care because it's being paid for by someone else.
Jessica Weaver 16:35
Yes. Do you is that what seems to be the preference for people is to start in the home? Is that what you see?
Alecia Barnette 16:41
Absolutely. And you know homecare is less expensive, it's typically about half the cost, there's a great resource in fact, those of you listening, if you go to long term care.gov it's got some fantastic, just general information about long term care. And then there's a really cool link, it's a cost of care link, and it will take you to the Genworth cost of care survey, and you can actually type in your local area and it shows you the nursing home cost, assisted living cost, home health care cost, and people don't understand as you said, how expensive that is, unless you've been in that situation. And that's today's dollars, that's not, you know, if you're 55, you might need not need care for 30 years, I mean, we you just simply don't know and that care is going, the cost of care is going to go up.
Jessica Weaver 17:28
Yes, the inflation in the health care industry is, you know, 5-7%, on average and that was before this hyperinflation that we're dealing with right now. So that's 30 years of it increasing by conservatively, 5% at least, absolutely. Oh, that's a great tool. And that's something that advisors can do with their clients to get a good idea of really how much is this going to, to cost them. And it is true that they're skewed that starting in the home, I'd even think of that piece. But you also see a piece where you know, you have Alzheimer's, you could be in a home for 10 years. And you need the kind of care for 10 years.
Alecia Barnette 18:08
In fact, in fact, the new statistic that I've heard is it's around 10 and a half years for an Alzheimer's claim. So that's the average claim. And that's that's a long time. We're living longer and we're living healthier. You know, you might have Alzheimer's and have that cognitive impairment, but no other issues. So you're being kept alive. Unfortunately, in your mind, you're not. And that's going to require a lot of assistance for a lot of time, a long time.
Jessica Weaver 18:39
Yes, that's scary. I think that's one of the biggest fears that most of us faces, the Alzheimer's and I know, friends whose parents are going through it and I have clients who are going through it, their parents are going through it and it's like a prison in your own mind. And the families, you feel horrible for everybody who's dealing with it. We're and I'm curious if you've been doing this research, this is coming up too, ways to help reduce the chances of things like Alzheimer's and aging and there's so much science now behind managing our stress today that can help to prevent those to keep our minds healthier than they've ever been. So is this something that the coming up for you with your conversations with advisors and clients?
Alecia Barnette 19:20
It is in fact there are some new solutions coming out that have what's called a Wellness Benefit that work on these these types of exercises with their brain and things that you can do to not not prevent because sometimes, you know, Alzheimer's is unpreventable, but it can at least help you manage it better and prolong the ability to use your mind. And I think we're gonna see more of this and those solutions. So, you know, if the insurance companies are figuring it out, then certainly there there is a rhyme or reason to being able to do such exercises and things that will help you mentally be more alert and aware in the future.
Jessica Weaver 19:56
Yeah, I'm curious if there are good some benefits to people who do stick to these new behaviors, activities and maybe reduce your premiums or give them some bonuses because it's going to help out the insurance companies and the people who are there insuring, as well. I remember reading one that was if you walk one mile a day, it reduces the chances of Alzheimer's by 48%. And then Wow, a mile a huge commitment, but to reduce it by almost 50% that seems worth it.
Alecia Barnette 20:27
That's huge. I had not heard that statistic. But that's fantastic. Yeah, yeah,
Jessica Weaver 20:32
So getting out there- walking, so our body knows, the more we can move our body and use our brain, the body isn't going to think we're decaying, which is what happens as we get older, the body starts, the cells die off and we don't, we produce new cells to take over. So the more active we can be, the more social we can be and reducing our stress, especially before sleep, so that we can get that good night, strong night of sleep, is key. It really seems to be helping. And I love that there's more science coming out about this, so we can be more proactive in our own health for it. So well, thank you so much for spending time with us, Alecia, any final thoughts? Or what would be next steps for people? I'm curious, it's got me thinking about it, I want to deal with it. What are good next steps?
Alecia Barnette 21:23
Absolutely. So if you're a financial professional, certainly, you know, educate yourself on why there's, there's a need some of the solutions out there, which is what I'm for, which is what my team is here for. If you're a client, make sure you proactively talk to your financial professional, about the different solutions out there. Because, again, even if you don't buy an insurance plan, you need to have a plan in place. And just talking through that with your financial professional is going to help you put that plan in place so that you can share that with your family and those that you love, so that they know how you want to be taken care of. So I would encourage you all to make sure, again, for those that are financial professionals reach out to Team Barnette and let us help you understand some of those solutions and have those proactive conversations with your clients. In fact, you know, we'll go that extra mile and certainly be happy to do an event so that those listening can jump on a call and really be educated on the whys and the how's and things of that nature.
Jessica Weaver 22:24
Yes, and it's good just for our clients to get another perspective, another voice in their head, so they know where we're coming from what we're seeing and as, especially as we're collaborating with other advisors here at the Women's wealth boutique, things like that, I would definitely take advantage of it, we're gonna get you there for an event. It's a huge topic among especially my clients. A lot with single woman coming up to retirement and we just had this and as a plan B. We don't want to have to go to plan B. But it gives them a lot of a huge sense of security, having a plan B. And even talking about the vulnerability when you don't have a plan. That's where so many people who are elder gets scammed. People can sense that right away. So it helps with that elder care abuse and the fraud that comes at that time of your life. But you brought up another point, Alecia, we should definitely end with is, letting your family know what your wishes are, and that you have a plan in place and who to talk to about it when it comes to that time. I don't think people do this enough. And then it's a huge surprise, or people are just trying to pull pieces together. They feel very lost, overwhelmed, confused and talk about stressed. It's a huge burden that gets thrown at them. Letting them know is such a good point. Alecia, thank you for sharing that.
Alecia Barnette 23:48
Yes, ma'am. Glad to again, glad to be here. Glad that we're able to talk about this subject matter. I'm very passionate about helping people and I hope everybody got a few nuggets out of this podcast today.
Jessica Weaver 24:00
Yes, I feel we could probably talk for hours on this subject, especially with Baby Boomers coming into retirement that's going to be huge demographic of needing Long Term Care down the road. That's something we want to think about. I talk about retirement, we always are thinking about daydreaming on the beach, on the cruise ship, right? Enjoying never having to set our alarm clock but very little are we enjoying or thinking about being in a wheelchair in a nursing home playing bingo all the days of our lives. I want to share with you one quick story my grandmother she lived till 98, her sister was 100 they were at the same it was independent and then they progressed to assisted and then my grandmother she had dementia the last few years had was in the nursing home. But I would go and visit her and the one day I was sitting with her in this common area and her friends are all coming around and the one came over and he goes Fred, I heard a rumor about you and Fred's like- what did you hear? He goes- I heard you were dead. This was a rumor that was going around the nursing home. And I was in complete shock. And I didn't know what to do to cry, to laugh? He says- I'm not dead, I'm still here. They all just started laughing, they all have their sense of humor still, but it isn't something like we like to see our our loved ones in but the more we can have a plan, the better options we can have for them and to find the right whether it's at home, or the right kind of facility for them. So thank you so much, Alecia, any last words you want to share with us?
Alecia Barnette 25:37
No, ma'am. I think we covered a lot. And again, happy to be here. If we want to do a second podcast, you know, I'm available to share and some of the solutions out there. And, again, just make sure you're having those proactive conversations and we're here to help you.
Jessica Weaver 25:53
That is a great idea. We should do a follow up with more in depth on what are the solutions, what are the innovative ways that we can approach this so it's not a something that keeps us up at night, but we can know that we are secure and protected if something were to happen to us. So thank you so much, Alecia. Thank you to our listeners. Thank you to our money Queens listening and supporting our show women behind the millions. We'll see you on our next
Alecia Barnette 26:18
Thanks so much, bye