Julie is a widow who recently turned 90 and continues to live in her own home. Until just a few years ago, Julie was very active, including frequently skiing at mountainous venues that required substantial travel.
She lives comfortably on a pension and social security benefits and has had a modest portfolio with IWC for more than 20 years. IWC has regularly reviewed her portfolio and supported her in developing and maintaining an estate plan aligned with her legacy wishes and the blessings of her large multi-generation family. She also has in place a long-term care policy purchased more than 20 years ago that has enabled her to live a life of passion with peace of mind.
Recently, Julie’s children have noticed an increasing need to assist mom with what is known as instrumental activities of daily living (IADLs). These generally describe the level of independence that a person can sustain rather than their functional status. IADLs include factors such as transportation and shopping, managing a household, communications (i.e., phones and mail), along with personal finances. In addition, although there has not been a formal diagnosis, they’ve noticed memory issues that have caused some problems.
While Julie’s children have been strongly supportive and provided assistance as they are able, they have talked to mom about the future and toured several facilities where she might have more immediate and reliable support for her care needs as they inevitably expand. They narrowed down the choice to a few and came to us to help evaluate based on cash-flow considerations and what would need to change financially as part of any transition. They are happy about her longevity but also concerned about the potential costs if intensive care in the form of assisted living and nursing/memory care is needed. Julie has agreed to move forward with a transition over the next year to an independent living situation and to sell her home.
After meeting with Julie and her daughters, we were able to put together a customized cashflow tool that enables Julie to compare cost options for independent living. The tool also evaluates projected costs associated with future assisted living and memory care should that be needed.
Our analysis was able to illustrate that the long-term care policy she purchased years ago will minimize the long-term cost impact on her assets. Due to the strong inflation features of the policy, the most expensive years are those where Julie is able to remain in an independent living status. Julie and her family were able to arrive at a consensus regarding an appropriate facility that will be comfortable and provide a continuum of care knowing that future expenses can be managed for more than a decade. IWC will work with Julie and her trusted contacts to manage her portfolio as the transition proceeds to protect any additional income needed for her care.
* This example is for illustrative purposes only. Actual performance and results will vary. The example does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted.