The Peace of Mind Pathway™ – Phase 3: Nurture

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Retirement planning doesn’t stop once your strategy is in place. Life keeps moving—and so should your plan.

Phase 3 of the Peace of Mind Pathway™ is called Nurture because it reflects the care, attention, and proactive updates your retirement plan needs to stay on course. From market shifts and tax law changes to evolving goals or unexpected life events, the Nurture phase is about keeping your plan relevant, responsive, and in sync with your life.

A Recap of Phases 1 and 2

If you haven’t yet explored the first two phases of our retirement planning process, here’s a quick recap:

  • Phase 1: The Peace of Mind Roadmap – This is your foundational plan. We get to know your goals and build a retirement plan that addresses income, taxes, healthcare, investments, estate planning, and more.
  • Phase 2: Implementation – Once your Roadmap is built, we put it into action. We guide you through investment allocations, creating an income strategy, estate planning, healthcare planning, and executing your retirement tax planning

Phase 3: Nurture ensures your plan remains aligned and effective over time.

Why Nurturing Your Plan Matters

Your retirement plan isn’t a “set it and forget it” situation. Much like a car on a long road trip, it requires regular check-ins, adjustments, and upkeep.

We proactively offer two strategy meetings each year to help keep your plan on track:

  1. Financial Plan Strategy Meeting (early in the year)
  2. Tax Strategy Meeting (in the second half of the year)

In between, we’re always here. If you experience a life change—a home sale, health shift, inheritance, or new goal—just let us know. We’ll schedule a time to review your plan.

Financial Planning Strategy Meeting

This first meeting of the year is all about evaluating your plan’s health and making any necessary adjustments.

Key Discussion Topics:

  • Revisiting your financial plan: We stress-test your plan against current market conditions and inflation rates.
  • Adjusting for life changes: Buying a new car? Expecting a grandchild? Thinking about a second home? We revise your plan accordingly.
  • Income review: We reassess how much income you need and how we’re withdrawing it. This aligns your retirement income strategy with evolving goals.
  • Cash flow and tax withholdings: Are you withholding too much or too little? We help you avoid tax penalties or overpayments.
  • Required Minimum Distributions (RMD): If you’re at or nearing RMD age (currently 73 or 75), we ensure you meet all requirements.
  • Beneficiary reviews: Many people forget to update beneficiaries. We make it a routine task to avoid mistakes that could derail your legacy plans.
  • Investment strategy for retirees: As you age, your risk tolerance may change. We ensure your investment strategy reflects your current outlook.

Tax Strategy Meeting

Your second strategy meeting is all about tax planning. It’s led by Taylor Wolverton, CFP®, EA, our in-house tax strategist.

What We Review:

  • Last year’s tax return: We look for trends, overpayments, underpayments, and missed deductions.
  • Current year income: We assess how much income you’ve realized and project forward.
  • Roth conversion strategy: Is it advantageous to convert traditional IRA dollars to Roth? We run the numbers.
  • Qualified Charitable Distributions (QCDs): For charitably inclined retirees, this strategy allows you to give directly from your IRA, reducing taxable income.
  • Donor-Advised Funds: We evaluate whether contributing to these accounts fits your long-term giving goals.
  • Tax withholding analysis: Are you on track to avoid a surprise tax bill or refund next year?
  • Quarterly tax payments: We verify accuracy and make adjustments if needed.

As one client shared after his meeting with Taylor and Nick:

“Dagmar and I had our first tax review meeting with Taylor and Nick yesterday. In summary, it was a very productive meeting. They were well prepared, very knowledgeable about the financial software tool they used, listened good to questions/input and provided interesting ideas how to minimize our tax burden in future.”

This level of proactive tax strategy in retirement—that goes well beyond just filing returns – is rare, and it’s central to achieving confidence and peace of mind.

Ongoing Education and Communication

Retirement is complex, but staying informed doesn’t have to be. That’s why we provide ongoing access to resources that help you understand what’s happening and why it matters.

This includes:

  • Client events throughout the year on key topics like long-term care, tax updates, and investment strategies
  • The Secure Your Retirement podcast and blog, where we break down timely financial topics in a simple, conversational format
  • Every-other-Monday market updates, helping you understand the markets in plain terms

We started these updates during the pandemic—and the positive feedback made them a permanent part of our Nurture phase.

Why You Can’t “Set It and Forget It” in Retirement

Some people enjoy handling all their financial planning by themselves. But in our experience, even the most dedicated DIY investors can miss crucial opportunities. The landscape of financial planning for retirement is complex. Tax laws change. Markets shift. Medicare rules evolve.

Without nurturing your plan through regular updates and strategy sessions, you risk falling behind and missing valuable adjustments.

It Takes a Team

The Nurture phase is where you truly feel the benefit of our team-based approach. Your plan is continuously supported by:

  • Financial planners
  • Investment specialists
  • Tax professionals
  • Estate planning experts
  • Medicare and healthcare advisors

With all these elements working together under one roof, we help you stay on course and optimize every aspect of your retirement strategy.

This Is What Long-Term Confidence Looks Like

Nurturing your retirement plan is about more than just numbers. It’s about knowing someone is watching the details, adjusting as needed, and keeping your best interests front and center.

If you want to explore how we help clients stay on course through every season of retirement, we offer a complimentary 15-minute call. It’s a simple way to get answers—and see if our process is right for you.

Schedule your call and take the next step toward clarity and confidence in retirement.

May 19, 2025 Weekly Update

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We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.

Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for May 19, 2025

CLICK HERE TO WATCH THE UPDATE

The Peace of Mind Pathway – Step 2 – Implementation

Radon and Murs discuss the second step in the Peace of Mind Pathway—Implementation. This is where the planning becomes reality. After building your personalized retirement roadmap, it’s time to put your financial planning for retirement into motion. ...

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The Peace of Mind Pathway – Step 2 – Implementation

In The Peace of Mind Pathway™: Your Roadmap , we laid the foundation. We got to know your goals. We clarified your income needs, investments, taxes, and healthcare decisions. Now, it’s time to bring that plan to life—with care, clarity, and coordination. That’s where Implementation, the second phase of our Peace of Mind Pathway™, comes in…

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The Peace of Mind Pathway™ –Implementation

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Retirement isn’t a single decision. It’s a series of carefully timed moves, thoughtful adjustments, and proactive strategies.

In The Peace of Mind Pathway™: Your Roadmap , we laid the foundation. We got to know your goals. We clarified your income needs, investments, taxes, and healthcare decisions. Now, it’s time to bring that plan to life—with care, clarity, and coordination.

That’s where Implementation, the second phase of our Peace of Mind Pathway™, comes in.

From Paper to Action

After the planning work in the Peace of Mind Roadmap™ phase—including your Introduction, Planning, and Strategy meetings—you now have a complete financial plan built around your goals.

Phase 2 is where that plan comes to life.

Implementation means more than just opening accounts or shifting investments. It means putting strategies into action: transitioning accounts, adjusting investments, initiating estate planning, coordinating tax strategy, and handling key retirement decisions like Medicare or long-term care. It’s the moment when your plan starts actively working for you.

We serve as your single point of contact through it all—keeping everything aligned, simplified, and fully coordinated.

What Happens During Implementation?

Implementation looks a little different for everyone, but this phase includes:

Every part of this phase is implemented with clarity and care.

Transferring Your Assets

Once you decide to move forward, we begin by transitioning your assets into your new accounts. This includes:

  • Opening IRAs, Roth IRAs, and brokerage accounts as needed
  • Signing transfer paperwork
  • Moving investments “in-kind” (without selling them during the transfer)

We know this is a big decision, one we do not take lightly. We monitor and communicate every step of the process to help you feel confident and informed.

Common Question: Will I Miss Market Gains During the Transfer?

No. With in-kind transfers, your investments move as-is, so you stay fully invested and there is no disruption to your exposure in the market.

Activating Your Investment Strategy

With assets in place, we can see your full financial picture in real time and begin fine-tune and apply your investment plan using the bucket strategy discussed during the Peace of Mind Roadmap™ phase:

  1. Cash Bucket – For near-term spending and emergency reserves
  2. Safety & Income Bucket – Structured for reliable, predictable income and reduced risk
  3. Growth Bucket – For long-term growth and inflation protection

This structure is designed to bring clarity and calm, by aligning your portfolio with your risk tolerance, income needs, and long-term goals— ensuring a steady stream of income, even in volatile markets.

Estate Planning (Simplified & Included)

If you don’t already have an estate plan in place, this becomes one of the top priorities in the implementation phase. Your Peace of Mind Pathway™ includes guidance on:

  • Wills
  • Powers of Attorney
  • Health care directives
  • Revocable living trusts (when appropriate)

Even better, your estate plan is flexible. If you make changes down the road, you’re not penalized. Updates are easy, quick, and all included as part of your relationship with us.

Retirement Tax Strategy: From Talk to Action

Taxes can be one of the biggest expenses in retirement, and retirement tax planning is not something to be ignored or delayed. Implementation starts a proactive approach by:

  • Analyzing your current and projected tax brackets
  • Developing multi-year tax strategies to reduce lifetime tax burden

This isn’t just a one-time meeting. Tax strategy includes year-round support from our in-house tax strategist, Taylor Wolverton, CFP®, Enrolled Agent. She helps you with:

  • Roth conversion planning
  • Withholding optimization (to avoid April 15 surprises)
  • Charitable giving strategies, including:
    • Qualified Charitable Distributions (QCDs)
    • Donor-Advised Funds (DAFs)

Tax strategy is ongoing, flexible, and customized to your evolving needs.

Frank and Lily came to us unsure if a Roth conversion was worth it. Five years later, their strategy reduced their lifetime tax burden by over $300,000—all from a series of quiet, confident moves that started in Implementation.

Medicare & Healthcare Coordination

Healthcare decisions matter—for both your well-being and your wallet in retirement. Whether you’re retiring before 65 or approaching Medicare eligibility, finding healthcare plan that fits your timeline and budget comes into focus in the Implementation phase.

We connect you with our in-house Healthcare Professional specializing in Medicare, Shawn Southard, who offers:

  • Medicare Parts A, B, C, and D guidance
  • Help choosing between Supplement and Advantage plans
  • Private insurance strategies before age 65

These are important decisions. We make sure you don’t navigate them alone.

Long-Term Care Planning

We take a realistic, balanced approach to long-term care planning. For many, this is one of the biggest unknowns in retirement.

Fortunately, options have improved significantly in recent years:

  • Hybrid policies with better benefits
  • More affordable premiums
  • Flexible coverage for different levels of care

Implementation includes a thoughtful discussion about whether insurance is necessary and how much coverage fits your needs.

How Long Does Implementation Take?

Implementation is a deliberate process. It doesn’t happen overnight—and that’s by design. This means taking small, intentional steps to ensure clarity, comfort, and confidence. Every situation is different, but here’s a general timeline to help set expectations:

  • Day 1–10: Asset transfer begins
  • Day 30–45: Investment strategy finalized and deployed
  • Months 2–6: Address estate planning and tax strategy
  • Months 6–12: Dive deeper into healthcare and long-term care planning

This step-by-step process ensures thoughtful decisions at every turn.

Flexibility is Built In

Your plan is never set in stone. Implementation is just the beginning. If your goals change or life throws a curveball, we continue to adapt your Peace of Mind Pathway™ with you.

And remember: everything you see here is included in one transparent fee. You won’t get separate invoices for tax strategy, estate planning, or Medicare coordination. We keep it simple.

What Comes Next?

Implementation is not the end of the journey—it’s the beginning of your retirement lifestyle. Once your plan is in motion, we move into Phase 3: Nurture. This includes monitoring performance, adjusting to life changes, and maintaining regular communication.

Stay tuned for Phase 3: Nurture, where we walk through how we continue supporting you for the years to come. Until then, if you’re curious about what Implementation could look like for you, we offer a complimentary 15-minute call.

Schedule your call and learn how the Peace of Mind Pathway™ can help you move from planning to progress—with confidence.

March 24, 2025 Weekly Update

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We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.

Here are this week’s items:

The Retirement Checklist Challenge

Radon Stancil and Murs Tariq discuss the Retirement Checklist Challenge, a structured approach to evaluating how prepared you are for retirement.  The goal of the challenge is to help you assess your readiness by scoring yourself on 34 key factors that contribute to a Secure Retirement Plan....

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The Retirement Checklist Challenge

Radon Stancil and Murs Tariq introduce a Retirement Checklist covering Retirement Income Planning, Tax-Efficient Retirement Strategies, Medicare and Retirement, Long-Term Care Planning, Risk Management, and Estate Planning for Retirees. The goal of the challenge is to help you assess your readiness by scoring yourself on 34 key factors that contribute to a Secure Retirement Plan….

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Retirement Checklist Challenge: What’s Your Score?

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Today we’re going to walk you through the Retirement Checklist Challenge. This checklist covers five crucial areas: income planning, medical and healthcare, advanced financial planning, risk management, and tax-efficient strategies. Whether you’re preparing for retirement or already retired, this checklist helps you assess your preparedness and identify areas that need attention.

The goal? Score as high as possible—ideally, a perfect 34 out of 34! If your score is lower, it might be time to consult a financial professional to bridge any gaps. At the end of this blog, we’ll tell you how to get your complimentary copy of the Retirement Checklist so you can find your score. Let’s get started!

The Five Key Categories of the Retirement Checklist Challenge

1. Income Planning: Will Your Money Last?

One of the biggest fears retirees face is running out of money. Even if you’ve saved diligently, market downturns, unexpected expenses, and inflation can impact your financial security. The Retirement Checklist Challenge ensures you have a solid plan in place by addressing the following questions:

  • Do you have a clear budget or spending plan for retirement?
  • Have you identified your essential and discretionary expenses?
  • Do you know where your income will come from? (Social Security, pensions, investments, rental income, etc.)
  • Have you considered tax implications on different income sources?
  • Have you optimized your Social Security strategy to maximize benefits?
  • Do you have a strategy for withdrawals from retirement accounts (401(k), IRA, etc.)?

Understanding your income sources and how they align with your retirement budgeting is essential for maintaining financial stability.

There’s more information about this in the article “The High Net Worth Guide to Secure Your Retirement”.

2. Medical and Healthcare Planning: Are You Covered?

Healthcare costs can be one of the biggest expenses in retirement. Planning ahead ensures you’re not caught off guard by unexpected medical bills or long-term care needs. Here are key considerations:

  • Do you understand your Medicare options and have a plan in place?
  • If retiring before age 65, have you considered health insurance options?
  • Have you factored in potential long-term care needs?
  • Do you have a Health Savings Account (HSA) or other healthcare funding strategies?

Medicare and long-term care planning are critical components of a secure retirement plan, ensuring you have adequate coverage for the future.

3. Advanced Financial Planning: Are Your Finances in Order?

Beyond basic budgeting and income planning, financial planning for retirement involves evaluating fees, estate planning, and overall financial structure:

  • Do you understand the fees associated with your investment accounts and financial advisor?
  • Have you reviewed your estate plan (wills, trusts, power of attorney)?
  • Have you updated beneficiary designations on retirement accounts and insurance policies?
  • Are you utilizing wealth management strategies that align with your long-term goals?

Many retirees overlook estate planning, but having these documents in place protects your loved ones and ensures your wishes are carried out.

4. Risk Management: Are You Prepared for Market Volatility?

Market fluctuations are inevitable, so having a risk management strategy is key to preserving your wealth:

  • Have you assessed your risk tolerance as you approach retirement?
  • Does your retirement investment strategy include non-correlated assets?
  • Do you have a plan in place to protect against market downturns?

Having a balanced mix of assets, including alternative investments, can help minimize risks while still providing growth opportunities. If your risk exposure feels too high, adjusting your portfolio to align with your retirement goals may be necessary.

5. Tax-Efficient Strategies: Are You Minimizing Your Tax Burden?

Taxes don’t stop when you retire—strategic tax planning can help maximize your savings and reduce unnecessary tax burdens:

  • Have you considered Roth conversions to minimize taxable income later?
  • Are you taking advantage of charitable giving strategies for tax efficiency?
  • Have you planned for Required Minimum Distributions (RMDs) from retirement accounts?
  • Do you have a strategy to minimize Social Security taxation?

Tax planning isn’t just about filing returns—it’s about implementing proactive strategies to reduce what you owe over time.

How to Get Your Retirement Checklist Score

This challenge isn’t just about completing a checklist—it’s about ensuring you have a secure retirement plan in place. If you’re working with Peace of Mind Wealth Management, our goal is that you easily score 34 out of 34!

What If Your Score Is Low?

If your score is below 30, don’t panic! It just means there are areas where you may need professional guidance. Whether it’s retirement income planning, Social Security strategies, estate planning, or risk management, we can help tailor a strategy that fits your needs.

To get your copy of the Retirement Checklist Challenge, simply email us at info@pomwealth.net or call our office at 919-787-8866 and request the Retirement Challenge checklist. It’s a fillable document that allows you to assess your readiness and identify areas for improvement.

Secure Your Retirement with a Plan

Retirement isn’t something you should leave to chance. Taking control now means enjoying financial stability later. The Retirement Checklist Challenge helps ensure you’re on the right track, giving you peace of mind as you approach retirement.

If you’d like more information on this topic, check out the article “Retirement Planning: The Key Steps to Retiring Comfortably”.

Once you find your score, you can schedule a complimentary 15 minute call to discuss your questions with us. Check out the calendar to find a time for your 15 minute call.

March 10, 2025 Weekly Update

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We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage. Here are this week’s items:

The High Net Worth Guide to Secure Your Retirement

Murs discuss the essential steps to creating a comprehensive financial plan designed for high-net-worth retirement. Joined by Nick Hymanson, CFP®, they walk through the emotional and financial transition from accumulating wealth during your working years to distributing that wealth to fund your retirement. …..
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The High Net Worth Guide to Secure Your Retirement

When you’ve spent your life building wealth, transitioning from work to retirement can feel overwhelming. At Peace of Mind Wealth Management, we specialize in financial planning for retirement, and through our years of experience, we’ve seen what works—and what doesn’t—when preparing for this major life milestone. In this retirement planning guide, we’ll explore the key strategies high net worth individuals should consider……
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A High Net Worth Guide to Secure Your Retirement

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When you’ve spent your life building wealth, transitioning from work to retirement can feel overwhelming. At Peace of Mind Wealth Management, we specialize in financial planning for retirement, and through our years of experience, we’ve seen what works—and what doesn’t—when preparing for this major life milestone. In this retirement planning guide, we’ll explore the key strategies high net worth individuals should consider, including managing sequence of returns risk, structuring your retirement investment strategy, planning for long-term care, and optimizing retirement withdrawal strategies.

So, whether you’re wondering “is it time to retire?” or trying to decide “when should I retire?“, this comprehensive guide will walk you through what it takes to secure your retirement.

The Shift From Work to Wealth

For many high-net-worth individuals, the hardest part of retirement isn’t financial—it’s emotional. After decades of saving, shifting from earning a paycheck to relying on your wealth can feel uncertain. The fear of running out of money or not having enough for the lifestyle you envisioned is real, but with the right strategy, it doesn’t have to define your retirement.

Along with the fear of running out of money comes questions like:

  • What if the market crashes early in my retirement?
  • How can I protect my wealth from unexpected downturns?
  • What’s the best way to create income in retirement?
  • How do I protect myself from rising costs like healthcare and inflation?

These concerns are valid. Fortunately, there are proven strategies to protect against these risks.

Managing Sequence of Returns Risk

One of the most significant but least understood dangers to high net worth retirement is sequence of returns risk. This risk refers to the impact that the timing of poor market returns can have on your retirement savings, especially when you’re making regular withdrawals.

Consider this: Two retirees each start with $1 million. They withdraw the same amount annually and average the same return over a decade. But one retiree experiences negative returns in the early years of retirement, while the other experiences those negative returns later. Even with the same average return, the retiree who faced early losses may run out of money much faster.

This is why managing sequence of returns risk is critical. Having a retirement investment strategy that prepares for market downturns from the start helps protect your assets, ensuring you can keep paying yourself for decades to come.

The Three Bucket Strategy: Building a Solid Investment Foundation

To mitigate sequence of returns risk and stabilize your retirement income, we often recommend the Three Bucket Strategy. This retirement investment strategy divides your assets into three distinct categories:

  1. Cash Bucket: This is your easily accessible money. It’s held in high-yield savings or money market accounts and is designed to cover emergencies and short-term expenses. For some, this might be $20,000. For others, several hundred thousand dollars. The right amount depends on your comfort level and cash flow needs.
  2. Safety and Income Bucket: Designed to provide predictable income with limited or no market risk, this bucket covers your essential expenses. The goal is to generate a stable return—typically in the 4% to 8% range—to fund your retirement withdrawal strategies without worrying about market volatility.
  3. Growth Bucket: This is your long-term growth engine. Invested in the market through stocks, ETFs, and alternatives, this bucket is meant to outpace inflation and support your financial needs 10, 20, or even 30 years into retirement.

By strategically allocating your assets into these buckets, you create a system where your essential income is protected while your long-term assets continue to grow.

Long-Term Care Planning for High Net Worth Individuals

Another major concern for retirees is long-term care. Costs for assisted living, nursing homes, and in-home care have risen dramatically and show no signs of slowing down. For high net worth individuals, long-term care planning is essential—not just to cover costs, but to protect your estate from being drained by healthcare expenses.

We work with our clients to create long-term care planning solutions that align with their overall retirement income planning goals. This may include hybrid long-term care insurance, self-funding strategies, or incorporating long-term care costs into the safety bucket of the Three Bucket Strategy.

Tax Strategies in Retirement

A major piece of risk management for high net worth individuals is managing taxes. Many retirees hold significant assets in pre-tax accounts like 401(k)s and IRAs. Without proper tax strategies in retirement, you may pay far more than necessary in taxes over your lifetime.

Tax planning should be integrated into your retirement checklist and considered before you retire. Strategies may include:

  • Roth conversions during lower income years
  • Tax-efficient withdrawal strategies
  • Managing Required Minimum Distributions (RMDs)
  • Coordinating Social Security and pension income with other taxable income

 

Crafting Your Peace of Mind Pathway

At Peace of Mind Wealth Management, our process for planning retirement revolves around what we call the Peace of Mind Pathway. Think of it as a GPS for your retirement journey. We help you define where you are today, where you want to go, and how to navigate the bumps along the way.

The Peace of Mind Pathway has three key phases:

  1. Roadmap: We analyze your current financial picture, define your retirement goals, and identify the best path forward.
  2. Implementation: We put your custom plan into action, from investment adjustments to cash flow planning and risk management.
  3. Nurture: We continue monitoring your plan, adjusting as life changes, tax laws shift, and markets evolve.

This process ensures your plan is not only set up correctly but remains optimized for your evolving needs.

Is It Time to Retire? How to Know You’re Ready

Whether you’re five years away from retirement or contemplating if now is the time, having a clear plan is essential. High net worth individuals have more moving parts in their retirement strategies, which means more opportunities—but also more complexity. The earlier you start planning, the more options you have to protect and grow your wealth.

At the end of the day, retiring comfortably isn’t about hitting a magic number. It’s about having a strategic plan that provides reliable income, protects your lifestyle, and gives you peace of mind.

To learn more, read the article “Is It Time to Retire? Key Considerations”.

 

Ready to Secure Your Retirement?

By building a thoughtful plan that includes strategies for retirement income planning, risk management, long-term care planning, and tax strategies in retirement, you’ll be well on your way to retiring comfortably and living the life you’ve worked so hard to create

Schedule your complimentary 15 minute call with us if you have any questions about A High Net Worth Guide To Secure Your Retirement.

October 14, 2024 Weekly Update

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We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.

Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for October 14, 2024

CLICK HERE TO WATCH THE UPDATE

Long-Term Care in Retirement – Annuity and Life – Side by Side

In this episode of the Secure Your Retirement Podcast, Radon and Murs discuss the final installment of their series on hybrid long-term care solutions, focusing on annuity versus life insurance. They provide an in-depth comparison of these two options, highlighting the…

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Long-Term Care in Retirement – Annuity and Life – Side by Side

In our recent blogs, we’ve talked about Long-term care planning; it’s importance in retirement planning, the challenges folks can face when choosing an option that best fits their needs, and some solutions that have developed in recent years. Traditional long-term care insurance policies have become less attractive due to frequent premium increases and availability issues. As a result, hybrid solution…

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Long-Term Care in Retirement – Annuity and Life Comparison

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In our recent blogs, we’ve talked about Long-term care planning; it’s importance in retirement planning, the challenges folks can face when choosing an option that best fits their needs, and some solutions that have developed in recent years. Traditional long-term care insurance policies have become less attractive due to frequent premium increases and availability issues. As a result, hybrid solutions, such as hybrid annuities and hybrid life insurance, have gained popularity.

Now that you may have a better understanding of the various options for long-term care planning, in this blog, we’ll break down the key differences between hybrid long-term care annuity and hybrid life insurance policies. By offering insights into their pros and cons, we’ll guide you through a side-by-side comparison to help you understand which approach might fit your long-term care needs. By the end of this blog, you’ll have an even better understanding of the types of long-term care insurance and how they can help you secure your retirement.

First, a quick refresher on hybrid annuities and hybrid life insurance solutions.

Understanding Hybrid Long-Term Care Annuity

Hybrid long-term care annuity is a solution that combines the benefits of an annuity with long-term care coverage. This approach allows individuals to leverage their investment for long-term care needs while maintaining certain financial guarantees.

One notable product in this space is the Equitrust Bridge. This policy guarantees issuance, which means that even if you have health conditions that would normally disqualify you from traditional life insurance or long-term care policies, you could still qualify for coverage. It simplifies the process through streamlined underwriting involving just a Zoom interview, without the need for medical exams or blood tests.

The Equitrust Bridge policy features a coverage ratio based on age and health, which determines the amount of long-term care benefits. For instance, a 55-year-old individual with a preferred health status who invests $100,000 would have a coverage ratio of 325%, translating to $325,000 in long-term care benefits. The coverage ratios vary by age, with older applicants receiving slightly lower multipliers.

Another essential feature of the Equitrust Bridge is the vesting schedule, where full access to the long-term care benefit base is achieved over five years. This policy also includes a 2% inflation rider, ensuring the benefit continues to grow over time to accommodate potential increases in care costs.

Exploring Hybrid Life Insurance for Long-Term Care

Hybrid life insurance, such as the Lincoln MoneyGuard Long-Term Care Insurance, offers a different approach to addressing long-term care needs. With this solution, you can secure long-term care coverage while simultaneously ensuring that a death benefit is available for your beneficiaries if you do not end up needing the long-term care benefits.

The Lincoln MoneyGuard product allows for flexible payment options. For example, a 60-year-old individual could pay annual premiums of $9,422 for ten years, after which no further premiums would be due. In return, this policy provides guaranteed long-term care coverage, which increases with a 3% compounding factor, making it more robust compared to the 2% inflation growth in some annuity-based products.

One of the key advantages of the Lincoln MoneyGuard policy is its guaranteed death benefit. Even if you don’t need long-term care, your beneficiaries will receive at least $120,000, which is the amount of the death benefit in the example provided. Over time, the policy’s long-term care benefits grow significantly, reaching $10,469 per month by age 85, with a total benefit base of $525,000.

However, Lincoln MoneyGuard’s underwriting process is more involved than Equitrust Bridge’s, with standard medical exams and a health questionnaire. This means that individuals with significant health issues may not qualify for this coverage.

Side-by-Side Comparison: Hybrid Long-Term Care Annuity vs. Hybrid Life Insurance

Now that we’ve provided an overview of each option, let’s compare them side-by-side to help you consider which may be a solution for you:

  1. Underwriting Requirements
    • Equitrust Bridge (Hybrid Annuity): Guaranteed issue, with a streamlined process that requires only a Zoom interview for cognitive and physical assessments. Suitable for individuals with health concerns who may not qualify for traditional long-term care or life insurance.
    • Lincoln MoneyGuard (Hybrid Life Insurance): Involves full underwriting, including medical exams. Best suited for individuals in good health, typically between the ages of 60 and 65.
  2. Funding Options
    • Equitrust Bridge (Hybrid Annuity): Usually funded with a single lump sum payment. This makes it suitable for individuals who have accumulated savings or are looking to reposition funds from a non-qualified annuity.
    • Lincoln MoneyGuard (Hybrid Life Insurance): Offers flexible payment options, such as spreading payments over ten years or opting for a lump sum payment. This makes it more accessible to those who prefer a payment plan.
  3. Growth of Benefits
    • Equitrust Bridge (Hybrid Annuity): Provides a 2% annual growth on the long-term care benefits.
    • Lincoln MoneyGuard (Hybrid Life Insurance): Includes a 3% annual compounding increase, making the long-term care benefit larger over time.
  4. Death Benefit
    • Equitrust Bridge (Hybrid Annuity): Does not include a death benefit as a primary feature, although some residual value may be available if the long-term care benefits are not fully utilized.
    • Lincoln MoneyGuard (Hybrid Life Insurance): Guarantees a death benefit for beneficiaries, ensuring that the premiums paid are not lost even if long-term care is not needed.
  5. Tax-Free Long-Term Care Benefits
    • Both policies offer tax-free long-term care benefits once the insured qualifies by being unable to perform two out of the six activities of daily living (ADLs).
  6. Flexibility and Accessibility
    • Equitrust Bridge (Hybrid Annuity): Ideal for those looking to reposition existing assets, particularly from non-qualified accounts. The streamlined underwriting process makes it a good option for those with health conditions.
    • Lincoln MoneyGuard (Hybrid Life Insurance): Suitable for individuals who prefer the security of a death benefit and the flexibility of payment options. Best for those with adequate cash flow to handle annual payments.

Pros and Cons of Long-Term Care Insurance: Annuity vs. Life Insurance

Hybrid Long-Term Care Annuity (Equitrust Bridge)

Pros:

  • Guaranteed issuance with no medical exams.
  • Suitable for those with pre-existing health conditions.
  • Allows repositioning of assets, such as a non-qualified annuity, into a tax-efficient long-term care vehicle.
  • Offers tax-free withdrawals for long-term care needs.

Cons:

  • Requires a lump sum investment, which may not be feasible for everyone.
  • Five-year vesting schedule for full benefit access.
  • Lower growth factor (2%) on long-term care benefits compared to some life insurance options.

Hybrid Life Insurance (Lincoln MoneyGuard)

Pros:

  • Offers a guaranteed death benefit, ensuring premiums are not lost if long-term care is not needed.
  • Provides a higher growth rate (3%) on long-term care benefits.
  • Flexible payment options, including spreading payments over ten years.

Cons:

  • More stringent underwriting requirements, making it difficult for those with health issues to qualify.
  • May not be as suitable for those who prefer a single payment or have less cash flow flexibility.

Choosing the Right Long-Term Care Option

Deciding between hybrid long-term care annuity and hybrid life insurance largely depends on your personal circumstances, health status, and financial goals. For those with existing health conditions or older age, the Equitrust Bridge hybrid long-term care annuity may provide the best opportunity for securing coverage. On the other hand, individuals in good health who want the flexibility of payment options and a guaranteed death benefit might find Lincoln MoneyGuard a more suitable choice.

When considering these options, it’s important to think about how your long-term care retirement needs fit into your overall retirement planning strategy. Long-term care is a major concern for many as they approach retirement, and having a plan in place can help secure your retirement.

Conclusion

Understanding long-term care options is crucial for effective retirement planning. Hybrid solutions like hybrid long-term care annuity and hybrid life insurance provide innovative ways to ensure you have the coverage you need while offering unique financial benefits. By comparing the pros and cons of each, you can choose the solution that aligns best with your financial situation, health status, and long-term goals.

If you’d like to discuss these solutions and how they apply to you, you can start by scheduling a 15 minute call. A 15 minute call can be very productive in getting you started on answers to your questions and, if you would like, some guidance on what to do next.

Schedule your complimentary call with us to learn more about Long-Term Care – Annuity and Life Comparison.