Christopher Leone | HVS Financial

HVS Financial Launches the Most Comprehensive, Accurate Long-Term Care Calculator To Help Boomers Plan for LTC Costs in Retirement

May 17, 2012 By Christopher Leone 2 Comments

HVS Financial Launches the Most Comprehensive, Accurate Long-Term Care Calculator To Help Boomers Plan for LTC Costs in Retirement

Danvers, Massachusetts (May 17, 2012) ~ It is an indisputable fact that healthcare expenses rise exponentially in the final two years of life, and the main source of these costs are assisted living facilities and nursing homes. According to the Department of Health and Human Services, 70% of individuals over 65 will need some level of long-term care (but not everyone will qualify), and the average expenditures can range from $20,000 to $150,000 per year in out-of-pocket expenses. Another significant problem is that these figures are based on today’s dollars, offering little in the way of long-term projections to help people plan for the future.

In an effort to provide financial institutions and advisors with more realistic calculations for long term care planning, HVS Financial recently added the industry’s most comprehensive and accurate long-term care cost projector to its RetireMark suite of retirement planning software tools. The LTC cost projector offers an extensive range of calculations and reporting features including:

a forecast of when a person is most likely to need long term care
a projection of future costs based on expected length of nursing home or assisted living stay, residency, and health issues.

According to HVS Financial’s President and CEO Ron Mastrogiovanni, “Although Baby Boomers are beginning to educate themselves about the threat of rising healthcare costs in retirement, the proverbial elephant in the room is long term care,” he explained. “These costs could exceed three quarters of a million dollars for some people. However, very few are actively planning for this event. Our mission is to offer the most accurate, effective software planning tools that provide advisors with concrete data to help clients prepare for the tremendous impact of future LTC costs.”

While planning for the final two years of life may seem excessive to some, HVS Financial believes that there is growing concern that a lifetime of saving and hard work may go to LTC facilities, rather than children or other family members. “We believe that with a little foresight and stable investments, nobody has to lose his/her lifetime savings—assets that could be passed down to devoted family members—to a hospital, nursing home, or LTC facility,” he concluded.

About HVS Financial (www.hvsfinancial.com)

HVS Financial is a software firm specializing in healthcare cost planning and health risk assessment tools and solutions. It is one of the only firms in the country that builds solutions that address healthcare and long-term care costs individuals will face during retirement.

What do 97% of all retirees have in common?

May 15, 2012 By Christopher Leone 2 Comments

Nationwide recently released its Survey on Healthcare Costs, and the most startling statistic—actually the very first statistic cited—was that of the retirees polled who were age 65 and older, 97% stated that they were enrolled in Medicare.

How many human-related activities can be measured at 97%? Do 97% of Americans finish high school? Have a bank account? Get regular haircuts?

NINETY SEVEN PERCENT.

Despite the fact that more than nine-tenths of Americans will eventually subscribe to Medicare, most financial plans never address what it actually costs.

Ultimately it ends up being an afterthought—a line item in the expense column during the planning process. This may be why the vast majority of Americans are under the false assumption that Medicare is actually free (or at least extremely affordable). It is also why the financial services industry must address this variable as 78 million Boomers march to retirement.

97% of retirees deserve to know what their future holds:

Part A – No premium for those who qualify, but there are some hidden costs like deductibles and co-pays for services (For more on Part A, click here.)

Part B – a $99.90 monthly premium for those earning under the average amount plus other deductibles, co-pays, and excess charges (For more on Part B, click here.)

Part D (Drug Coverage) – Premiums (also based on income), deductibles, co-pays & other charges based on the terms & conditions of the insurance company selling the plan. (For more on Part D, click here.)

MediGap – This form of coverage takes care of the co-pays, deductibles, & excess charges of Parts A and B, but here are fairly high premiums. (For more on MediGap plans, click here)

Other Out of Pocket Expenses – Medicare does NOT cover dental, vision, hearing, podiatry, or routine exams/physicals. Medicare will only cover procedures after a beneficiary has been admitted as an inpatient to a hospital.

Medicare Advantage Plans – are administered by private insurance companies and must follow the rules & regulations of Medicare. They offer the same coverage as original Medicare (with the exception of a MediGap policy), but also provide opportunities to purchase coverage for non-Medicare services like dental, vision, hearing, podiatry, and routine physical exams.

These seemingly small monthly premiums may not seem like much, but factor in all of the additional out-of-pocket expenses—the co-pays, uncovered medications, eye exams—over the long-term, and the cost of simply staying alive can utterly consume the savings of unprepared retirees.

A healthy 60-year-old couple earning less than $170,000 per year can expect to incur over $685,000, just in Medicare costs, through age 90. If that same couple happens to make $1 more than the allotted $170,000, they can expect to pay over $825,000 over those same 25 years.

With projections of this magnitude likely to affect almost our entire population, one question begs to be answered:

How can industry professionals, whose sole purpose is to help people plan for retirement, ignore the greatest expense of 97% of their clients?

Filed Under: Medicare Tagged With: Financial Planning, Health Care, Health Care Costs, health care costs in retirement, Health care costs; retirement; financial planning; financial advice, health costs, HealthCare, HealthCare Costs, healthcare costs in retirement, healthcare expense in retirement, Medicare, Medicare Advantage Plans, Part A, Part B, Part D, planning, Retirement

The Short Take on the Debt Ceiling & Medicare

August 7, 2011 By Christopher Leone Leave a Comment

With the Debt Ceiling issue made into law last week there has been a lot of talk about what may happen with Medicare and Medicaid. These programs make up roughly 23% of the federal spending per year and the overall costs have been increasing at an extraordinary pace with no reversal of this trend on the horizon.

These increasing costs, unfortunately, have placed a very big bulls-eye on the backs of these two programs but, as of right now with the new law and the first rounds of cuts coming in the form of $917 billion that is to be reduced over the next 10 years they will not be affected.

This is great news for now but by November 23, 2011 it can all be changed.

Yes, in less than 3.5 months the super committee that has been assembled to make suggestions on what should happen next with the Budget has been asked to find at least an additional $1.2 trillion in reductions over 10 years. This super committee can look at anything in the Budget and propose cuts to anything it deems necessary, like Medicare & Medicaid – it can also advise that taxes need to be raised too.

And for even some more bad news, if Congress can’t agree on a new Debt Deal by November 23, 2011 this new law has triggers that will automatically cut $1.2 trillion across the board starting in 2013. These cuts will include a 2% reduction in Medicare payments to hospitals & other types of services.

Will this super committee get the job done or will politics get in the way?

The answer to this question may just be the devil in the details. The big difference between this super committee and the ones in the past is that even if this committee does nothing, if Congress allows bickering to get in the way and if November 23rd comes & goes with nothing passed the Budget will be cut automatically and done completely out of the control of Congress.

So, as of right now there is good news for Medicare & Medicaid, but, and there is always a but, it doesn’t look great in the very near future for both programs.

Even a 2% rate reduction to payments to hospitals will affect most Seniors. According to Rich Umbdenstock, the president and chief executive of the American Hospital Association “cutting hospitals will mean decreased access for seniors, that’s why the total Medicare program – including caregivers – should be exempt from cuts that could overload emergency rooms, shut trauma units and reduce patient access to the latest treatments”.

May Congress heed his advice and put this to rest once and for all

Filed Under: Healthcare

Medicare Handbook for 2011

May 30, 2011 By Christopher Leone Leave a Comment

Medicare Handbook

From Medicare.gov, the organization that provides the official rules and regulations of Medicare for all Seniors over the age of 65

Filed Under: Healthcare, Medicare

Market Commentary – A review of the Permanent Portfolio Fund

April 26, 2011 By Christopher Leone Leave a Comment

Several people recently asked me about the Permanent Portfolio Fund, a fund currently knocking the leather off the ball. I’ve included my review of the fund below.

PRPFX has performed extremely well historically in comparison to its peers. The largest holding in the fund is gold and from a sector allocation standpoint, the fund is concentrated in basic materials, financials and energy. The fund also has 30% of the portfolio invested in fixed income.

Years ago, this type of fund was referred to as a balanced fund. Then they evolved to become asset allocation funds and were usually structured to be less volatile than traditional equity funds. I actually agree with this fund’s strategy with the exception of having such a large exposure to metals.

The fund places itself in the conservative allocation group but it is not conservative. The fund carries above average risk for a conservative fund but does generate returns to justify the inherent level of risk built into the product. The fund has returned 6.68% year to date with around a 70% exposure to equity type investments which is excellent. The S&P has returned 6.34% with a 100% exposure to equity. Also, the performance of the S&P does not include trading costs or fund fees. So this fund did a great job with only 70% in equity. There is only one way to achieve this level of performance and that is to take on more risk. There is no magic in this business.

From an expense ratio standpoint, Permanent Portfolio is a no load fund and has an expense ratio of 0.77% which is very reasonable. The category average is 0.82%. The fund began operation in December, 1982 and has been managed by Michael Cuggino since May of 2003.

Would I recommend this fund? Yes, but the buyer of the fund needs to be aware that a large percentage of the fund is in gold, silver and Swiss Francs. You can’t dispute the fund’s performance. But, this is not a fund you can ignore. Investors in this fund must keep a close eye on this fund because of its large concentration in precious metals. I am overweight in the same sectors but not to the same extent.

By buying this fund or any other fund, you need to insure that the overall risk of the portfolio does not increase significantly. Software available through your broker or advisor can display sector weightings compared to an appropriate benchmark such as the S&P. Being significantly overweight in a sector may significantly increase the overall volatility of your portfolio. Make no mistake about it, this fund has done an excellent job and it is a good holding to have in a portfolio but, may not be a good fit for you given the current makeup of your portfolios.

According to Morningstar a firm specializing mutual funds claims that the management has been lackluster and that investors could have replicated the fund’s performance through ETF’s. Morningstar also stresses the risk of the fund given its rather large exposure to gold and silver because historically, precious metals can drop like a rock. I have more faith in the management than the Morningstar analyst. I believe the management can reduce its precious metals exposure quickly should metals start going south.

Bottom line, this is a solid fund with excellent performance and reasonable expenses but given its focus, analyze your sector weightings before adding this fund to your portfolio.

Ron

Filed Under: Investing

The Elephant in the Room

March 17, 2011 By Christopher Leone Leave a Comment

What is interesting is that based on LIMRA and Ken Dychtwald studies investors want to discuss the issue of Health Care in Retirement with advisors but, advisors are just not prepared or comfortable with the topic. Many in the industry feel that it is better to ignore the elephant on the table. For example, they believe that bringing up healthcare costs when people can’t even cover basic living expenses is a mistake. But, managing health is “basic” and on the consumer’s radar. As a matter of fact, according to Dychtwald, investors want financial advisors to help with the healthcare cost issue. Recently surveys have been by some of the largest firms in the Financial and Health Industries that found that the biggest issue Boomers have with Financial Advisors is that they are not prepared to discuss healthcare costs, Medicare, etc. or have a basic overall knowledge of the topic.

Filed Under: Healthcare, Retirement

Taking Aim at Retirement Planning Void

February 10, 2011 By Christopher Leone Leave a Comment

Tom Cochrane of Annuity Digest gives an interesting insight of HVS and how Health Care will/has impacted the Financial Industry

Read entire article

Filed Under: Healthcare, Investing

Calculate your Health Care Costs in Retirement

February 5, 2011 By Christopher Leone 2 Comments

Check out one of HealthView’s simple interactive tools to get an idea of your projected health care costs in retirement.

The cost of your health care will most likely be the greatest or second greatest financial burden you face in retirement.

It is important to note that an individual’s life expectancy can vary by 20 years and annual health care costs can vary by 50% based on one’s health profile. The simple HealthView tool displays health care costs and life expectancies for healthy men and women.

Understanding your personal situation and expected health care costs in retirement is a critical step to planning for your future financial needs. HealthView provides financial advisors and their clients with projected health care costs and life expectancy information based on the individual’s health status, lifestyle and history of medical conditions.