Investor’s column: The importance of long-term care

I have been in the business of giving investment advice for a while now. I have had long-term relationships with clients beginning from pre-retirement to the end stages of life.

I would like to share stories of two of my clients.

The first was referred to me by an existing client. She lived alone in a modest home in a small town south of Venice and was of modest means. The returns on her investments, modest as they were, helped her pay her bills. We’ll call her Mary. When I first met Mary, she was still driving and able to get around to her activities with few limits. She had her local social circle. She was active in her church.

As time passed, Mary became less mobile and was having trouble with her legs. Standing was getting more difficult and she began to rely on friends to get her places. She remained mentally sharp, though she began to be more isolated. She was getting to the point where she needed assistance, but she had no long-term care coverage.

One of her grown son’s offered to take care of her if she would buy him a truck, which she did even though I advised her she couldn’t afford to do so. After several months, he decided he could not make a go of it here, so he left. He took the truck and left her alone.

Jump ahead a few months and I receive a phone call from her telling me she is in Tennessee with another son. She was selling her home in Florida. She was led to believe that her house would sell for $500,000. She had big plans for selling the home and would go into a retirement home. The house sold for less than $200,000.

A few months later, I received a call from her son saying they were going to put her into a nursing home. They were trying to qualify her for Medicaid.

I assume that she is now in the nursing home. She is still mentally sharp but needs help with some of the activities of daily living. I can’t imagine a worse ending than being mentally sharp and having to spend the remainder of life in a Medicaid-approved nursing facility. She is in a state in which she had never lived surrounded by no one she knows.

If she had long-term care coverage, she could still be in her own home.

The second client was a widower with three grown children who married for the second time to a woman who had never been married. They had many happy years together. They lived in a nice condominium overlooking the Gulf of Mexico. They went north for the summers. They played lots of golf together and traveled.

He was in his 80s when he was diagnosed with dementia. His wife took care of him day and night, with no assistance from his children. Finally, she needed help. They both had long-term care coverage, so she had a home health care aide come to the home a few times a week. Then more often as the disease progressed. Finally it was time for him to go to an assisted living facility. He died about three months later.

Because he had long-term care coverage, he was able to stay in his home, with his loving and caring wife, for about two years longer than if he didn’t have coverage.

One in five people will require care for five years of longer, and the average annual cost of a full-time home health aide is $43,680.

Explore long-term care options with an adviser – it will allow you to have the ability to stay in your home longer. It also can help to protect your assets for your beneficiaries, among other things. Long-term care coverage should be a cornerstone of any investment plan.

This story was originally published October 16, 2017 at 11:16 AM with the headline "Investor’s column: The importance of long-term care."