(inquisitive music) - "Dying Broke", that's the title of a "New York Times" series, examining how the financial costs of long-term care are devastating many American families.

Tonight we're gonna give you tips on financial planning for the future and what you can do if you're currently struggling to help a loved one.

But first, our Phil Luciano breaks down the concerning numbers and statistics affecting millions of American families.

(somber music) (somber music continues) (somber music continues) (somber music continues) Joining us now is Daryl Dagit, a financial advisor with Savant Wealth Management and Mitchell Forrest, he is a Family Caregiver Information and Assistant Specialist with the Central Illinois Agency on Aging.

Thank you both for coming in.

- Thank you.

- Thank you.

- Mitchell, give us a little bit of an overview about your organization and how it helps people in Central Illinois.

- Yeah, sure.

First of all, we're funded through the state and federal government through Illinois Department on Aging, primarily to help people stay independent in their house for as long as possible and avoid need of early nursing home skilled care use and offer them options to help them do that.

And just know that it's a possibility if, even if they're living with a chronic disease or disability, that with a little bit of help you can maintain your independence for a long time.

- Does that help include in-home care?

- Yes, absolutely.

The Community Care Program through Illinois Department on Aging can offer home care aides, Meals on Wheels, emergency medical alert.

There's even a medication dispensing device that sends, you know, the right meds at the right time and you just take that out of a tray and if you don't take it, there's an alert that starts and a caregiver will be notified.

So a lot of wonderful services that really help people stay independent for a long time.

And, you know, we direct people primarily to those services and providers that can do that.

- When it comes to at-home care, when it comes to paying some of those bills, are, do you find that some of your clients are shocked at how expensive it can be?

And are they prepared for that?

- Absolutely, it is a big shocker because I know, for instance, in my mom's case, she lived in Champaign-Urbana and we started to pay for around the clock home care.

And fortunately, through my dad's hard work and savings, we could do that for a while, but we were spending about 11,000 a month for around the clock home care.

And it was wonderful.

We were very fortunate.

We found a wonderful company that was dependable, reliable, very professional, and kept me abreast of what was happening.

'cause I lived in the time in Mackinac, so I was one of those long distance caregivers.

But yeah, that is not sustainable for very long, for very many people.

- Yeah, that's over a hundred thousand dollars a year.

Daryl, that's a lot of money.

You help people plan for their futures.

Are enough people planning for the distant future when it comes to, you know, maybe turning 65, retiring, and then if they have health issues, are they prepared for either long-term care or in-home care?

- Yeah, that's one of the first steps in planning is looking at, we call it the potholes.

When you're on a trip and you're planning out that trip, what are the potholes you're gonna hit?

And in the case with long-term care, there's many ways to look at that.

You have in-home care, you have assisted living, you have daily daycare for adults.

You have, you know, what we call the nursing home situation.

And then you have hospice at the end.

So it's the idea of how do you plan for all that?

And also having to look at the longevity of the family members and the health of the family members.

So it gets a little bit more in depth on the planning and it's looking at, you know, we always wanna plan for the long life living to 90, into our nineties, but then what happens if you're, you know, end up disabled in your seventies.

Your chances of living longer are higher than if you are disabled in your eighties or your nineties.

So there's a lot of different things go into it on that.

But yes, that it's a big area of planning for us.

- Nobody likes to pay for insurance until you need it.

And then you realize how important it is.

As a general rule of thumb, do you have an amount people should set aside in preparing for potential situations like this?

Or what do you tell people who come to you with their money and say, "I don't wanna be caught."

- Yeah.

- With my pants down.

- Everyone's situation's different.

We have some come to us and say, "The kids can fight over whatever's left," and we have some that wanna actually leave a legacy, and some that wanna do charitable giving.

So as you plan that, you have to plan differently for each one of them.

So it does come down to looking at the consequences.

And it's not just financial.

We were talking about that a little bit off air a while ago.

It's the emotional issues that come with that.

The, you know, with the children have to take care of you if you haven't planned.

The best analogy I can give is, you know, when you get on an airplane, they tell you to put your air mask on first and then take care of the child.

So same thing here as you start, you know, to prepare for, you know, life as you age, you know, you do have to have that knowledge, okay, am I going to self-pay?

Am I going to buy insurance?

Am I gonna do a hybrid plan of that?

Or maybe a little of both.

And it does go into some complex planning as we do prepare for that.

- And if someone say, goes to a financial planner like yourself when they're in their thirties, are they continually coming back, say in their forties, okay, certain things have changed, I'm looking at this, do I need to shift my money around?

Do you see that?

- Yeah, financial planning, it's like hitting, trying to hit a moving target all the time.

In finance, things are changing constantly.

You know, people have major events, changes in their life.

There's, you know, the markets, of course, a lot of different things play into that.

Their jobs, you know, different advancements in medical now, people are living longer.

So now we're finding more and more in the nursing home later in life because, you know, now we get new knees and new ankles and keep walking.

- Yeah.

- And participating in life.

So yeah, it does come to a point where you have to look at it and go, okay, what are the consequences?

What monies do you have available?

And some individuals, they may have a nice pension, they may have, you know, nice savings or have, you know, their required distributions on their IRA monies coming in from their 401(k)s they saved during life and they can draw from that.

Others can't, there might be a spouse at home.

So there's, again, you have to look at each situation individually and determine what is that number.

- Mitchell, the cases you deal with and the people especially you deal with, is there a commonality in terms of maybe people say, "Oh, I wish I would've done that," or "I wish I would've done this," when it comes to preparing for their future, - Sometimes it hits people in acute situations where relative goes into the hospital and has a heart attack or a stroke.

And so they have to start thinking on their feet right away.

And they come to us when, you know, they can't, they don't know where to turn.

So it's kind of a, for them it begins to be a crisis moment.

And so, yeah, I mean, people do reflect back and gosh, I wish I would've done some financial planning.

I wish I would've thought to talk to my mother or father about what are their wishes, you know, is there a preference of different long-term care or are you, you know, set, determined to stay in your home for as long as possible?

So, and like you were saying, knowing the different ways that long-term care can be offered, whether it's in the home, in adult day healthcare, or assisted living, supportive living, or in a skilled care facility.

So that's what, one thing we're about is help people, empower people to have the resources and information they need to make those decisions and start to have those discussions like you were talking about.

One thing I would add to the financial piece is making a will and having a power of attorney for healthcare and or property.

So there's no confusion or anxiety about, okay, what happens if dad can't make decisions anymore due to a dementia and he can't keep track of his checkbook and balance that and pay the bills, who can do that for him?

And so having that power of attorney in place can be really, really important.

And so we have a contract with Prairie State Legal Services to help seniors 60 and over access an attorney at no cost to help them with those kinds of things.

- Well that's great.

That point you made the power of attorney and the will, I'm sure makes things easier, especially towards the end.

Are there any other legal things people should be thinking about now before they're in this situation?

- There are quite a few.

We also, to expound on that would be, you know, the full estate planning, looking at the whole picture, you have beneficiaries on things.

We see a lot of times where individuals maybe started working through their sister, their mother, father on is a beneficiary, forget about that.

Life goes on and then all of a, you know, they've worked at the same place for 30 years and something happens and we have money going to the wrong place.

The State of Illinois does have a situation where you do have a will if you die without one, but you don't want it.

- Okay.

- Yeah, it is gonna split the money up between the, you know, the, the surviving spouse and the children.

And maybe if that's a point in time where the surviving spouse may need the money moreso at that point in time.

So it's, that's, we call it kind of the 101 of financial planning.

That's where you kinda start is on the estate plan looking at, you've worked hard all your life, you've done without, you've saved, and where's that money gonna go?

You know, make sure it's gonna go where you need it to go.

And a lot of times it's for a rainy day situation such as long-term care.

- Mitchell, you mentioned some state programs.

How is the State of Illinois helping people who are at an advanced age that maybe don't have all the funds they need for in-home care or even a nursing home?

- We're thankful that the Department on Aging offers the Community Care Program, which mentioned earlier, if someone is eligible, 60 or over and also eligible for Medicaid, they can receive home services, home care aids, emergency medical alert, Meals on Wheels, adult day health services, or some combination of those to help them stay in the home.

And it also includes an assessment to say, okay, even with all of these services in place and with your neighbor checking on you once during the week, it's still not enough to safely live here by yourself and give you that kind of information and suggest, okay, maybe it's time to start talking to family and thinking about another housing option like assisted living or long-term care.

- Okay.

What are some of the main questions people have who reach out to you?

Whether it's, do you have a lot of children of elderly parents who are saying, "What do we do now?"

It's gotta be a scary and confusing time in their lives.

- It is, it can be very scary.

So a lot of people come to me with that basic question.

I don't know where to turn.

You're the first person I called.

You're the agency on aging.

And mother suddenly had a stroke and she can no longer balance her checkbook.

She can't drive anywhere safely anymore.

So, we might link her with transportation assistance, which we have also through the Agency on Aging or, but there, it can be very, like you said, emotional because this is your family member, somebody you've loved and cared for you for so many years.

And now to see that role flipped and accept responsibility, okay, now I need to be the caregiver for mom or dad.

It can be very difficult.

Sometimes, even counseling is needed.

There's a high rate of depression among informal caregivers.

So, we have, with a grant through the Department on Aging, help caregivers like that access some counseling support groups through a grant with Bradley University Counseling and Research.

We also help grandparents raising grandchildren.

So that's a whole nother caregiver, which unfortunately, it's prevalent in the area where we have an age range of 40-year-old grandparent all the way to 85 who might've raised generations of grandchildren under the same roof.

And so you can imagine, you know, you're retired at 60, 65, and suddenly DCFS says, "Okay, "this child needs, needs a guardian right now.

"Mother can't take care of him or her anymore.

"We need you to take care of this child," and your whole world changes.

- Sure.

- So, yeah, there's a variety of ways that we help support those people, whether it's with counseling or respite care.

Respite is a grant that we have just to give a caregiver an occasional break in their caregiving by providing a substitute caregiver through home care or OSF Senior World where they, somebody can go have some social interaction and care while the caregiver is able to have a break.

- Daryl, you've been doing this a long time.

When people are planning out their futures, I'm sure they're thinking, oh, gonna retire at 65 and I want Daryl, I want enough money to be able to travel and help my kids and blah blah blah.

Do you have to say, we also have to talk about the unpleasant later in life discussion?

You have to remind them of that?

- Yeah.

- Or people more or people these days, are they more cognizant of what they need to think about?

- No, it is tough discussions and we usually start out with estate planning and that kinda leads into all the pitfalls that could happen along life.

You know, we always plan for the best long life, but again, we're always looking at the contingency plans and the big thing is to have a plan.

It's not necessarily is it the best plan, but to have a plan and make sure your family knows what that plan is and how to execute it, if and when the time happens.

It doesn't have to be, like I said, the best plan.

You might be working towards the plan and something happens before it's fully funded, but at least they have an idea of how that plan's gonna go and how it's gonna work out.

- I'll throw this question out to either one of you.

I recently had a relative who passed away, but he had been in assisted living for a few years and I'd always heard stories about, well, you have to be broke before Medicare or the government's gonna help take care of you.

And I kind of understand what that means, but can either one of you explain a little bit more about that?

- I think it sounds like Medicaid.

So what, what people don't think about when going into a nursing home situation is that Medicare does not cover you staying in a nursing home forever and ever.

It's after a hospital stay where Medicare can help with rehabilitation, but after a hundred days, you know, that's not available anymore.

So you're dependent on Medicaid or self-pay or long-term care insurance or VA benefits might be an option to help.

But yeah, Medicaid means right now you have 17,500 in assets to qualify.

So it's, you've depleted a lot of your resources, very limited income to be eligible for that.

So yeah.

- Daryl, are there ways people can protect their money, quote unquote when they're in a situation like this?

- There are, that kind of goes down a legal road.

I'm not an attorney.

- [Mark Welp] Okay, all right.

- I'll stick to my CFP training.

But there are ways they can do that.

The government does have a, you know, 60 month or five year look back.

So anything you try to do later in life prior to, you know, that disability long-term care event could be clawed back.

So you do need to consult with an attorney and make sure that you're doing things correctly if that's the direction you want to go.

And that's probably where you hear a lot of the horror stories of, you know, if you do something like that and the kids aren't on board with it and you know, all of a sudden you get kicked outta the house and all those assets are removed from your name, you have no control.

So you wanna be very, very careful and consult an attorney, talk to an attorney about it, and see if that's the right fit for you.

What we run into is the major savings for individuals these days are their 401k and that that's an individual retirement account that they have that does have to be used up before they can go on to, you know, any kind of government programs.

And if you try to get out of those programs like a 401k or an IRA, you have a substantial amount of tax due.

If you try to cash your whole amount out in one year, you're paying ordinary income tax on that.

So sometimes it's not cost effective to, you know, to try to do something like that.

But again, it's going back and taking a look early on, okay, what, you know, what do I have to pay for long-term care?

I have social security, I have a pension.

Do I have VA benefits?

There actually are VA benefits to help out for assisted living.

You know, there's a lot of other programs available where Mitch would be, you know, more in tune to what those programs are on the government side that can actually help individuals in passing from that retirement, you know, to the grave so to speak.

- Well, before we let you guys go, Mitchell, just some parting words that of advice that you might have for people watching this who may be nearing that retirement age or know that they have parents who are in that situation.

- Yeah, so just don't be afraid to have those difficult discussions with family about what your preferences might be as far as long-term care.

And know as far as your insurance and planning, make sure that coordinates with your primary care provider and that it can cover the prescriptions that you need.

If you're unsure about that, please, you know, talk to a Medicare specialist.

We have some on staff and there's others in the community that would be glad to help.

So we have the difficult discussions and please prepare a power of attorney at least at a minimum for long term.

Thinking about what you would want if you could not answer for yourself.

- And advice from you Daryl.

- Yeah, similar, I just went through the situation.

Had mother-in-law had gone into assisted living this last year.

There was no, she refused to do all the paperwork even though we keep telling her to do it.

She didn't wanna think about it.

It does make it much easier if all that paperwork is completed.

You need power of attorney for medical and power of attorney for property.

- Okay.

- Make sure you have both those.

You can actually get 'em for free online.

You can go to just Google, you know, power of attorney, state of Illinois statute power of attorney, and there's one there you can fill out.

Most of the hospitals, if you go in, they'll do a power of attorney or living will for you right there at the office or business office.

So you can check out those as well if you don't have the money to do it.

And then again, the the will doesn't have to be anything fancy, just has to be done.

Have your, you know, your loved ones know where everything is.

It's probably the big key.

Where is that original will?

- [Mark Welp] That can always be revised, right?

- It can always be revised, but you wanna make sure they know where that's at, where all the information is they need.

And it used to be in the old days, you would wait for the mail to come in, you find out where all their assets were.

Now you need it's electronics, so make sure you have access to the electronic information as well.

Where do they hide the password booklet or?

- Yeah, yeah.

Well gentlemen, great advice, not a fun subject to talk about, but extremely important.

Daryl Dagit with Savant Wealth Management and Mitchell Forrest with the Central Illinois Agency on Aging.

Thanks very much for joining us.

We appreciate your insight.

- Thanks for having us.

- Thank you.

- Back now with Phil Luciano.

Scary numbers that you dug up from that story.

- Oh man, it's one of those things.

You think you're heading in the right direction.

You work hard all your life and then something happens, medical or otherwise and what are you gonna do?

Where are you gonna end up?

And granted you can't plan for everything but there was a mention of long-term care insurance and there's a problem there.

I think there's only like three or 4% of Americans, three or 4% have it.

If they have it.

It oftentimes doesn't pay for what you need done for your household situation.

And if you want it, a lot of times you can't afford it.

And that's part of the "New York Times" breakdown.

It's like, goodness, where are we headed?

So all those things those guys are talking about, it's great to do as much as you can.

- [Mark Welp] Yeah.

- But sometimes it's just - Kids, I guess if you learn anything from this, start saving early.

I know I didn't start saving as early as I should have, but you gotta do it.

- Gotta stick in there.

- All right well we appreciate our two guests coming on and giving us some cool information on that.

And I learned a lot just in that segment about I'm gonna go run to a financial planner I think after this.

Let's talk though about, you've gotta see this coming up in just a minute.

What are we in for this week?

- Well, it's our first all new episode of the year.

I'm kind of excited about that.

And one story that's interesting, a lot of people in Peoria, around Peoria know about the black bear.

It was in Jumer's when Jumer's were still around.

Then it moved to Thirty-Thirty, which is now Intuition and it's got a rehab recently.

A redo, a makeover including its tongue.

It's got a new tongue.

- Wow, that's great.

Does it stick it out?

Do you get to see it.

- Say tuned and then check it out and you got a segment too on the show.

- Yeah, we've got a story about a cool playground at a school in Normal.

It's unlike any playground that you've ever seen.

It's an environmentally conscious playground but still fun for the kids.

Multimillion dollar playground.

It's very interesting.

You gotta check it out.

- And they got a role in setting it up.

It was really neat seeing what these kids can do.

- Yep so we got great stuff on your first all new episode of "You Gotta See This" for this year.

And we're gonna be here every week showing you great stuff happening in Central Illinois that'll put a smile on your face for half an hour.

Just forget about your long-term care.

Just watch "You Gotta See This".

It'll be fun.

That is our time for right now.

Check us out on wtvp.org to find past episodes of "At Issue" and "You Gotta See This" with Phil and Julie and we will see you right back here next week.

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