On May 1, 2004, United India Association organized a seminar on Retirement, Estate Planning and Long Term Care. The speakers were Ms. Sangita Joshi and Richard A Belofsky from Prudential Financial., with more than 40 people in attendance.

Puran Dang, Past President of UIA, introduced the speakers. Richard got everyone going with a little ‘Jeopardy’ with answers such as a) 5% in 98, 1-2% in 03 b) 3.6% from 98-03 c) $265 and $87B. The questions to those a) What was the average money market rate b) What was the average return for S&P 500 c) What is the average daily cost of a nursing home and d) What is the price current price tag President Bush requested to fight terrorism?

This was followed by a discussion on estate planning and various themes including will I outlive my money, how will a pay for illness, is my estate planning up to date. These are important points to consider because if you are a couple 65 years today, there is a 1 in 2 chance that you will live to 92 and a 1 in 4 chance you will live to 97. For some, this might mean more years in retirement than in their working career. In order to have a comfortable retirement, once must diversify income sources, guarantee 25-50% income, dollar cost average even during retirement and consider stretch IRAs. In addition, one must make sure that they have these basic documents up to date: Wills, Durable Power of Attorney, Health Care Proxy and Trusts. “Some of the common estate planning mistakes that people make are leave everything to spouse, fail to have a current valid will, choice of wrong executor, improperly arranged life insurance and failure to have and communicate a master plan,” said Richard.

Sangita discussed the need for Long Term Care (LTC) Planning. The fastest growing segment of the population is those who are 85+. Typically, 80% of the people receive care at home or in a community based setting while 20% do so at nursing homes while one pays 25% of the cost from out of pocket. With average costs between $200 – 300 per day, in the New England area, it is important to plan for it. The only way for Medicare to pay for these costs is to transfer all your assets so that your net worth is less than $2,000. This is not a viable option for most of us as this can lead to loss of control, misuse of funds, consequences on college financial aid for children, financial difficulties for yourself, lawsuits and lost of cost basis. So in order to protect your assets, avoid being a burden to the family, have access to quality of care and maintain your standard of living, it is important to plan for long tern care and have long tern insurance. “Even though LTC insurance might be expensive, the cost of not have LTC has be far greater,” said Sangita. There are a number of ways to pay for the premiums including use of portion of interest income, partner with adult children and tax incentives.

In summary, people don’t plan to fail, they fail to plan!!

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