Outside Economics

What's Up With AARP and Long Term Care Study?

Posted by Wendell Brock, MBA, ChFC on Fri, Jun 30, 2017

This week an article I saw caught my eye…every three years AARP conducts and publishes a scorecard on how each state performs with regard to caring for our elderly, primarily centered around long-term services and support, basically long-term care. There were five main areas of focus for the study, Affordability and Access, Choice of Setting and Provider, Quality of Life and Quality of Care, Support for Family Caregivers, and Effective Transitions. Now people may say what does this have to do with me? I am working, I have a family, and saving for retirement, I am not interested in long-term services for the elderly.

That may be the case, but if you are on the earth and living, then you have parents who may still be living, and at some point you will have to assist them. Or you are older and you can see the top of the mountain you have been climbing for the past 30 plus years and retirement is getting closer; perhaps you need to stop for a moment on the journey and rearrange the gear in your pack, pickup a few tools to make the decent down the mountain much easier and more secure.  Either way this is for you.

Here are some highlights on this interesting article that are important for us to learn.1497018516323_2484036_1497017731134.jpg

Most states saw some improvement in fact more improved than declined. Few had meaningful improvement over 10 percent in any one category. The study reported: "Most notably, the majority of the states had no meaningful change in each of the five measures in the Affordability and Access dimension. The cost of Long-term Services and Support (LTSS) over time remains much higher than what middle-income families can afford, and most adults do not have private long-term care insurance."                                     Source: State Long-Term Services and Supports Scorecard, 2017.

It was interesting to see that there was no improvement in the vast population of this country in regards to people becoming more prepared for their future by purchasing Long-term Care Insurance.

One area where there was significant improvement was in the area of Family-Centered Care. Family caregivers provide the majority of care for the elderly and recognizing their needs is a positive signal. The article discussed the success measured across the following three main areas:

  • Family caregivers are assessed for their own needs;
  • States have adopted spousal impoverishment provisions in Medicaid home and community-based services; and
  • States have enacted the Caregiver Advise, Record, and Enable (CARE) Act to notify the family caregiver before the person is discharged from the hospital and to instruct the caregiver on how to perform follow-up medical/nursing tasks."

Families that care for their parents are true angels and it can be so difficult for them, many work and have children at home complicating matters more. Receiving some support in the form of education and understanding of what needs to be done to take care of your partents is huge.

One area where improvement was not so dramatic was in Effective Transitions. Effective Transitions is the process of moving a person from a hospital to a nursing care facility to recuperate and then back into their community. The aim is to help people who have been in nursing homes 90 or more days to transition back into the community. Only a few states saw improvement in this area.

The benefit of this is that people are really more comfortable in their own surroundings, in their own home, which is where they should be. The challenge is that only about 5 percent of people  on average who have been in a nursing home greater than 90 days transition back home. Receiving care at home is less expensive as well - saving retirees thousands of dollars.

The bottom line is that state law, best practices and the way people are cared for are changing. If people want to be cared for in their advanced age, it is best to make a plans now, if your parents are retired or over age 50, talk to them about their plans. The government has a plan for you - you will be cared for in one way or another, it may not be a the way you would like, but you will get care! Let your family members know what your plans are and make your wishes known (in writing). Helping those closest to you understand what to do to help is one of the kindest things you can do. Nobody wants to improperly care for a parent or other family member.

Educate yourself on the ins and outs of Long-term Care, learn the differences between assisted living, home health care, and nursing home care. What are the long-term care triggers, and how do they work? Review your budget and look at how you would pay for the different levels of care. Part of your plan may include obtaining some long-term care insurance, make sure the premiums are guaranteed for life. It can be difficult to pay into a policy for several years only to get an unaffordable premium increase.

For more information on other long term articles you can look hereor here. To see how your state did in the AARP study you can look here. The report was well done and offered some real insights into the overall needs of one of our nation's most valuable resources, our seniors.


I wish my wallet came with FREE refills! ~ Anonymous

Topics: Long term care, Long term care insurance, Long-term Support and Services

If YOU Want to Be The Only YOU - Get ID Protection

Posted by Wendell Brock, MBA, ChFC on Fri, Jun 23, 2017

Financial planning is the wise use of your assets to make maximum use before and after tax dollar. As an advisor who consults people on financial planning topics, I am constantly looking for ideas and ways to help people use (and I would add “protect”) their assets wisely. 

With the advent of the internet connecting the mobile phones, personal computers, tablets, etc., communication and information has never been easier.This certainly presents many challenges as well.   Keeping information and identities safe is a constant growing problem.identity-theft-online-fraud.jpg

The following short report about cyber crimes caught my eye: 

Losses from cyber crimes rose 24% in 2016: FBI

Reuters 6/21/2017 - Thomas Reuters - Business Insurance

(Reuters) — Losses from cyber crimes rose 24% percent in 2016 to over $1.33 billion, according to a report by the Federal Bureau of Investigation's Internet Crime Complaint Center.

The center, which was set up in 2000 to receive complaints of internet crime, received 300,000 complaints during the year from hacking victims.

Businesses lost $360 million to cyber criminals, who tricked them into wiring money using fraudulent emails that appeared to be from corporate executives and suppliers, according to the report released on Wednesday.

IC3 said it received 2,673 complaints last year from victims of ransomware, with losses totaling over $2.4 million.

In May, the WannaCry ransomware attack infected 300,000 computers in more than 150 countries, disrupting factories, hospitals, shops and schools.

Ransomware is a form of malware that encrypts data on infected machines, then typically asks users to pay ransoms in hard-to-trace digital currencies to get an electronic key so they can retrieve their data.

While consulting on a de novo bank we were starting in Illinois, the banker and I were visiting about bank crime and he mentioned that what will be the biggest problem is “Identity Theft” he said that the average bank robber may only get away with approximately $3,500, while the average identity theft case gets away with just over $17,000. He then mentioned, I don’t know why anyone would want to rob a bank - you get the FBI after you and a lot of prison time; while ID theft is a local matter, so no FBI and the local police are so overwhelmed that they don’t know how or can’t follow up on the crime. Consequently ID theft and cyber crimes go largely unsolved. (Please note I am not suggesting people join in becoming cyber criminals.)

The robbery is not just of money, it is perhaps more importantly your time.

The Federal Trade Commission, FTC, reports that on average, recovery from ID Theft can take 200 hours of work and up to six months. They have some good information and more tips on their website. That is a lot of time and effort to restore your good name, which means it will take a person almost eight hours per week of work for six months - who has an extra eight hours per week? And yet people are forced to spend the time to clear things up.

In an effort to help protect my clients more from such a horrible crime as ID Theft, I have started recommending people have some sort of ID Theft protection. As more criminals move to cyber space, I am sure it will get worse before it gets better. And whatever better is, it will take time to develop and deploy, in the meantime protect yourself.

For more information about protecting the only YOU click here. This will take you to ID Shield one of the premier companies that protect your Identity. As a point of disclosure I did sign up to represent ID Shield, simply because I believe in their valuable service.


"For me life is continuously being hungry." ~ Arnold Schwarzenegger 

Topics: Financial planning, Identity Theft, ID Theft

Six Tips To Becoming Self Reliant

Posted by Wendell Brock, MBA, ChFC on Fri, Jun 09, 2017

Recently I was in a meeting and the thought occurred to me; why do people even attempt to have a financial plan? What is the purpose of having a financial plan? Why take the time to create a financial plan and put forth the effort to implement it and follow through with it? The answer to these questions may sound obvious, but as I have studied financial planning and worked in the financial industry for the past 30 years, I have concluded that people have an innate desire to be self-reliant. However being self-reliant is a learned trait while we may have the innate desire, we have to act on it, and learn self-reliance.


What does it mean to be self-reliant? According to Dictionary.com, the adjective originated around 1826 and means, “relying on oneself or on one’s own powers, resources, etc.” Another definition, one that is a little broader is this: The ability, commitment, and effort to provide for the spiritual and temporal necessities of life for self and family. Both definitions explain the necessity to provide for one’s self.

The second definition is more comprehensive. My thinking is; how can you be self-reliant if you are not mentally or spiritually in the game? Can someone provide for self and others without that inner strength that comes from being mentally or spiritually prepared? I believe that self-reliance is more than just a good job and a fat bank/retirement account(s).

Self-reliant people not only have a good source of income, they have money in the bank, investments, as a friend of mine would add some food storage, debt free, and they are spiritually and mentally able to care for their own. This is a challenge in todays world where people are pulled in every direction, often wasting time and money. In some cases, children don’t have a complete understanding of what it took to earn the money they are now spending. 

With the challenges of providing for one’s self and family, may I submit that it would also include the necessity to continue to learn and improve one’s self. Consistently learning and integrating new concepts of truth, would help a person accomplish a goal of self-reliance. For example read good books, work with a mentor, be a mentor, help someone else reach their goals.

How does someone become self-reliant? Here are six ideas that will help you become more self-reliant:

  1. Pay yourself first: Take some money out of each pay check and send it to savings (savings accounts, retirement accounts, investment accounts). The discipline of saving money and living on less than one’s income is a critical part of self-reliance.
  2. Using a family budget: Using a budget is one of the basic principles of good money management. See more here
  3. Risk management: Risk management is taking care of the risks we are exposed to on a daily basis. There are four things that can be done with the risks: 
      1. Keep the risk yourself and personally pay for the things that may happen
      2. Control the risk through behavior
      3. Prevention - don’t engage in behavior/activity that would enhance the risk
      4. Transfer the risk through some means of insurance.
  4. Be prepared: Things happen in life that cause great pain or financial difficulty (loss of a job, divorce, death of a loved one, business reversal, etc.) These trials may cause us to stretch and grow in ways we never knew we could, so finding, and developing coping skills is critical (developing the mental/spiritual side of self-reliance).
  5. Daily improvement: Find something to do on a daily basis that will help you improve various aspects of your life. For example each morning, I spend time, praying, reading, writing in a journal, exercising, and meditating. 
  6. Become debt free: Debt is truly a bondage that never sleeps, never eats, is always your companion where ever you go; becoming debt free is a blessing of self-reliance. Get out of debt!

These steps towards complete self-reliance take time and work. Don’t be too hard on yourself if you are not self-reliant in the next year - keep working towards it. “Claim progress”, as my wife would say. Map these things out how you personally might implement them in your own families’ and measure your progress. And then realize that life happens and each of us can experience a reversal.

Reversals that can cause a person to be completely wiped out and they have to start over, some people go through life with no issues at all (at least not that we see), so be patient with people around you as we are all be on the road to self-reliance, we aren’t at the same level, or we may have just suffered a reversal.

Finally, remember that there is always hope; keep the embers of hope alive by working on the above six items in some manner, as part of your financial plan regularly measure and keep track of your efforts, and you will become self-reliant.



"Strive not to be a success, but to be of value." ~ Albert Einstein

Topics: Budget, self-reliance, self-reliant

Understanding the Amount of Life Insurance YOU Need

Posted by Wendell Brock, MBA, ChFC on Fri, Jun 02, 2017

The question is often asked how much life insurance do I really need? It is different for each person; however there are some basic formulas and a rule of thumb that help.

A rule of thumb is typically developed after going through so many iterations and calculations that the rule becomes a basic truth. Calculating the amount needed for life insurance is no different, as over the years many individual needs analysis have been calculated that a rule of thumb has been developed and it is quite accurate. That rule is basically 10-20 times a person’s annual income.Ins family.jpg

Now when this rule of thumb does not work, is if there is only one bread winner in the home and the stay at home spouse has little to no income. The stay at home spouse still has significant economic value to the family. Another case where the rule may not work is in the case of insuring children. (See article about insuring children here.) Children have great economic value in a family, and should a family lose a child, that is a grievous experience to go through. Receiving a death benefit, would provide the money so the family could take the time needed to grieve; while not necessarily needing to go back to work right away to pay the bills for a funeral. 

To get a more accurate amount of the life insurance to buy, a needs analysis is performed with a simple formula which helps zero in on the particular amount for one’s circumstances.

First, let’s review the purposes of life insurance, generally there are three major reasons for it: 

1. Financial care for loved ones in case of premature death 

2. Pay for final expenses of the decedent

3. Provide liquidity for the estate (business buy out, estate tax burden, complete a project, pay off a certain debt, assist with retirement income, provide a charitable gift.)

What it should not be used for is to profit from the death of a loved one. Also a person must have an insurable interest in the person they are placing the policy on. 

The formula for developing the needs analysis is basically Income needs for however many years, plus expenses that will need to be paid, minus current assets, including current life insurance policies. I like to print out a form and work the numbers by hand, simply because it makes the process more real. You can download a worksheet here

When I was a young adult my father passed away. He had a small life insurance policy, I am sure it was not much, simply because my parents could not afford much. But it was a great help to my mother when he did pass away. His policy did not pay for every little item we could have used or needed, but it did pay for several important cares of life, including his funeral expenses. I am the youngest in the family, and at the time of my father’s death I was in college, unmarried, and working part-time. My mother was a school teacher and getting closer to retirement. The value that small policy had on our entire family could not be calculated in simple financial terms, as it blessed our mother for years. Remember money is an emotional thing, its not just numbers. That peace of mind for my mother was incredible and I thank God for the agent who helped my father get the insurance. 

As you calculate your insurance needs don’t just look to the here and now, look off into the future as well. Needs can and will change over time. Many people these days find themselves raising grandchildren, thus putting them back in the position when they were young parents, affects their need for life insurance. 

These long-term needs should be covered with some permanent life insurance, while other short-term needs should be covered with term insurance. Often this can be - again a rule of thumb - approximately 20-40 percent of the total life insurance need. It is something that each person should consider and work with their agent to determine the proper amount in view of their long-term goals.

In the end, life happens and each person is left with needs and wants. We may not take care of all the wants, but each of us can make a serious dent in covering the needs with some form of life insurance - it is an inexpensive way to provide financial peace of mind for our loved ones.



"Gold is money, anything else is credit." ~ J.P. Morgan

Topics: life insurance, term insurance


Wendell W. Brock, MBA, ChFC

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