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ChoiceNews
JULY 2012
LIFE LESSONS
Randy Schmidt, CFP®
Think back to January 2011 – the news stated things were
getting better. The markets went up in the first few months
of the year, then “uh oh”…things weren’t growing as fast as
some had expected. The markets continued to decline until
the fourth quarter of the year, then “whalla”, they took off
once again. As Yogi Berra once said, “It’s déjà vu all over
again” We went through the first three months of 2012,
and all appeared to be
improving. Now, things aren’t
so rosy after all.
Growing up, my family
attended a number of auction
sales. Since I didn’t get into
farming, it felt like that was just
a neat part of my childhood.
Watching the behavior of
the markets is eerily similar
to attending an auction sale.
For anyone who has ever attended a sale, this may make
more sense than to those who haven’t. Think of how people
respond to something that seems like a “must have”. The
auctioneer gets going and the excitement is high. The price
seems to climb higher and higher. For the casual observer, it
appears as if people are going crazy; “They are paying WHAT
for THAT?” Take a look at a recent example in the markets
– Facebook. The hype and excitement pushed the stock
price to an obscene level. Remember, the reason that people
go to auction sales isn’t to overspend but to find a deal. The
best time to go is when the mood is solemn. People are
reluctant to spend money on anything no matter how cheap
it is. Sounds a lot like what happens in the stock and bond
markets.
Whether we are at an auction or investing in the markets, the
challenge is to find out if we are getting a good deal. No one
knows what the merchandise we purchase at an auction will
be worth six months from now, nor will we know what the
investment we purchased will be worth six months from now.
However, if we are careful about what we buy and purchase
them for the right reasons, they will add value to us over the
coming years.
committed to your future
Although the current mood in the world may seem somewhat
gloomy, we continue to invest in “your” business. We have
two new individuals joining our team: Mandi LucchesiCalati and Kathy Lothschutz. Mandi was recently the
assistant branch manager for our Cedar Springs branch. She
will be assisting us with account maintenance. If you have
any questions regarding your account, feel free to contact
Elizabeth or Mandi. Kathy has been working for her family
business in addition to working as a teller at our Ravenna
Office. She is very hardworking and has decided to include
working with us as part of her weekly schedule. Kathy will
be assisting with our marketing and scheduling. You may be
hearing from Kathy soon for future events and meetings.
I hope everyone has a great summer. And if you are ever
in the area, please stop in and say “hi” to our new team
members and us. n n n n n
UPCOMING EVENTS
JULY
Wednesday, July 4th
Independence Day
Office Closed
Thursday, July 26th
Inland Workshop
ChoiceOne Bank – 6 pm
Thursday, July 19th
Technology/ID Theft Workshop
Moss Ridge Golf Club – 6pm
SEPTEMBER
Monday, September 3rd
Labor Day
Office Closed
Saturday, September 22nd
1st Day of Autumn
Sunday, September 9th
Patriot Day
OCTOBER
Saturday, October 13th
Client Referral & Appreciation
Event
Klackle Orchards – 3 pm
Tuesday, October 16th
Securing Social Security Workshop
Moss Ridge Golf Club – 12 noon
MAKING A DECISION ABOUT
LONG-TERM CARE INSURANCE
Kelly Potes, CFP®
of needing such expensive personal care. But the fact is, due
to the high cost of premiums, this coverage may not be an
appropriate solution for everyone. While there are no hard
and fast rules, the Society of Actuaries suggests:
n
It may be hard to envision that we will ever need assistance
with basic daily living tasks like bathing, dressing or eating.
But the reality is, the longer we live, the greater the likelihood
that we will find ourselves in need of long-term care.
Consider this statistic: 70 percent of people age 65 or older
will require long-term care services at some point in their
lives.1
After spending
years building
2-5 Years
up your nest
1-2 Years
egg, just a few
20%
12%
years of paying
long-term care
expenses could
1 Year
More than
20%
17%
or Less
5 Years
threaten your
retirement.
31%
Without
provisions,
None
the need for
long-term care
can also put an
enormous emotional, physical and financial strain on family
members.
Estimated Years of LTC Needed After Age 65*
*American Association for Long-Term Care Insurance, 2011 LTCi Sourcebook
THE COSTS OF LONG-TERM CARE (LTC)
Long-term care can be extremely expensive, depending on the
level of services you require and the duration of time that you
need care.
Nursing Home Care: One year in a nursing home can
average more than $50,000, and depending on the region
could reach twice that amount.
Assisted Living: The average monthly fee for an assisted
living facility is about $2,000, which includes rent and most
additional fees. More specialized care could cost significantly
more.
Home Care: Hiring an aide to come in a few days a week,
2-3 hours each day, to help with self-care tasks like preparing
meals, bathing and dressing, can run $1,000 a month or
more. If more skilled care is needed, the costs can be much
higher.2
Should You Consider LTC Insurance?
Long-term care insurance can offer protection against the risk
committed to your future
n
If you have savings less than $250,000, you may not
want to buy private insurance. Should you require LTC
but have limited resources, Medicaid may provide some
coverage.
If you have assets of over $2 million, you may not need
to purchase LTC coverage. Should you need long-term
care, you may be able to self-insure and pay costs as they
arise.3
If you fall somewhere in between, consider designing a longterm care policy with premiums that are affordable and make
sense for you.
Changing some provisions of the coverage may help bring
costs down.
VARIABLES THAT IMPACT POLICY COST2
Daily Benefit Amount - the fixed maximum amount that
the policy will pay daily for any long-term care services you
receive.
Benefit Period - the minimum number of years you can
expect to receive benefits. The majority of patients requiring
long-term health care use it four years or less.
Deductible/Elimination Period - addresses how many days
you receive care before your long-term care insurance begins
covering expenses. Until that point, you will have to pay for
care out-of-pocket.
Inflation Protection - helps insure your benefits keep pace
with the rapidly rising costs of health care.
Dual Policies/Pooled Benefits - allow shared care options
for couples
to create a
combined pool
of total benefits
that can be used
by either or both
spouses.
Another option
is to explore
some of the
hybrid products
available on
the market that
combine life
insurance or annuities with some long-term care benefits. If
the benefits are not needed while you’re alive, the policies pay
a death benefit to your beneficiaries.4
Regardless of your personal circumstances, waiting to address
long-term care options until you actually need care can
significantly impact your financial situation and the quality of
life for you and your loved ones.
Discuss these issues with your financial representative and
incorporate some long-term care provisions into your financial
strategies.
Guaranteed interest rates are based on the claims-paying ability
of the underlying insurance company. Surrender penalties may
apply. Additional benefits and riders may increase the cost of the
premium or reduce the interest rate earned.
Sources: 1) U.S. Department of Health and Human Services,
National Clearinghouse for Long-Term Care Information, www.
longtermcare.gov. 2) America’s Health Insurance Plans, AHIP.
com 3) Howard Gleckman, “Should You Buy Long-Term Care
Insurance? Maybe Not” Forbes.com, January 18, 2012. 4)
Joseph A. Tomlinson, “Is Long-Term Care Insurance Worth it?”
Financial Planning Magazine, September 2011. 5) Some LongTerm-Care Insurance is Better Than None, SmartMoney.com,
December 28, 2011. 6) “Is Long Term Care Right For You?” The
Washington Post, January 23, 2012. n n n n n
ELIZABETH’S EXPRESSIONS
Elizabeth Ford
I just returned from a long weekend in Minnesota where we
went to visit some friends and attend a graduation party. My
boys enjoyed a successful
weekend of walleye fishing,
and my daughter and I
enjoyed the relaxation and
socializing.
For the remainder of our
summer my son will be
attending basketball and
football camps, along
with keeping the yard mowed. As for my daughter she will be
doing some babysitting, housework, and also turning 16! My
husband is still travelling with his job and enjoying the work he
does, and when he’s home we enjoy kayaking as a family. I am
enjoying my summer gardening, watching my children grow,
and just spending time as a family!
For all of our clients I hope you have a safe and pleasant
summer. n n n n n
ChoiceOne EVENTS
Technology/ID Theft Workshop
Thursday, July 19th
Securing Social Security Workshop
Tuesday, October 16th
Cybercriminals & Hacktivists – Viruses & Phishing. There
are ways you can protect your assets, your family and your
future, and it begins with awareness. We strongly recommend
you attend this informational and educational FREE
presentation, and learn how you can protect yourself from
becoming a victim. Guest speaker will be Nathan LaSalle,
Security Awareness Trainer with Jackson.
Today, Tomorrow & for the Future. This is a FREE
event that every retiree should attend. Hear what’s going
on with the Social Security program, what solutions are
being considered to sustain it for the next generation and
receive answers specific to your situation. Featured speaker
will be Gail Buckner, a Retirement & Financial Planning
Specialist of Franklin Templeton Investments.
6 pm – Dinner will be provided
Moss Ridge Golf Club, Ravenna
12 noon – Lunch will be provided
Moss Ridge Golf Club, Ravenna
Invitations will be mailed. Give us a call or email [email protected] for more information. Guests are welcome!
13
OCTOBER
SAVE THE DATE!
CLIENT REFERRAL &
APPRECIATION EVENT
2012
As a Thank You for your business, we invite
you to join us for a fun-filled day in the country! There will
be great food and plenty of activities. Take a wagon ride
out to the fields, pick your own pumpkins, jump on the
inflatables or make your way though the corn maze. We’re
sure you’ll find lots to do and have lots of fun!
When: Saturday, October 13, 2012 from 3pm – 7pm
Where: Klackle Orchards, 11466 W Carson City Road
Greenville, MI 48838
If you have questions, want more details or wish to RSVP,
please call 888-259-4468 or 616-678-4961, or email
[email protected]. Seating is limited.
CFP* and CERTIFIED FINANCIAL PLANNER™ are marks owned by the Certified Financial Planner Board of Standards, Inc. This mark is awarded to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements. Investment Centers of America, Inc, (ICA), member FINRA, SIPC, a Registered Investment Advisor, is not affiliated with ChoiceOne Bank or ChoiceOne Investment Center. Securities, advisory services and insurance products offered through
ICA and affiliated insurance agencies are *not insured by the FDIC or any other federal government agency *not a deposit or other obligation of, or guaranteed by any bank or their affiliates *subject to risks including the possible loss of principal
amount invested. ICA does not offer tax or legal advice.
PO Box 248
Kent City, MI 49330
Phone: 616-678-4961
Fax: 616-678-5102
Web: www.choiceone.com/investments
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