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Visit yamava.com/palms to discover more. Radical Personal Finance, episode 23. On today's show, how do I help my parents prepare for the prospect of needing long-term care services when they are not financially prepared? Also, what do I do about my 401(k) which has high fees, limited options, and no clear fiduciary?

♪ Welcome to the Radical Personal Finance podcast for today, today being Friday, July 18, 2014. My name is Josh Rascheitz. I'm your host here with you every day. And today is going to be a Friday Q&A show. Going to be primarily handling two questions, the two questions I just mentioned, one about long-term care planning and the other about my 401(k).

And then if we have time, we'll get to some inspiring reading for the weekend. ♪ So these two questions today are going to be challenging. I don't expect them to be quick, but I do want to really give some good ideas to the people that have asked the questions.

As you know, I'm putting out these Friday Q&A shows every week, and I think that next Friday will be a lot better. So over the weekend, I should be able to get up and add the application on the website to allow you to phone in your feedback, so that way we can have a nice audio message that we can play on the air.

And I'm excited about that. It'll help us to get a better feel for you as a caller, as a questioner. It'll help us to get a little bit better of a feel and a little bit more personal, instead of the more impersonal emails and Twitter questions and answers that I've been answering so far.

So I should be able to get that up over the weekend, over the early next week, and then I will announce it on the show as soon as that is ready to go. And then I hope that you'll call them in. But today we've got two questions that we're going to deal with.

And then depending on how long the show goes, I've got a variety of articles that I'd like to talk about. If we get to them, if not, we'll push them to Monday. And so those two questions are going to be a question about 401(k)s and then a question about preparing for long-term care.

And I've struggled with which one to start with because neither of them are easy questions. They're both pretty difficult for me to work through. And I hope you'll see today kind of the real challenges of financial planning because these are both real people's situations. And I don't have enough information to really give a comprehensive, complete answer that's going to fully solve the listeners' questions.

But I'll try to give some ideas and point you in the right direction. And I think we'll lead off with the long-term care question. I think we'll start with that, and then we'll go into the 401(k) question afterwards. And so the long-term care question comes in from a listener.

And this listener asked that I not share his name. So we will keep this listener anonymous. And by the way, I'm always happy to do that. I will generally try, unless I goof up somewhere along the way and mention something. You know, the Twitter question coming in, I'll mention your Twitter handle.

But if you send me an email with a question, I'll never read your name except just maybe your first name. So feel free to lie about that if you don't want me to read that or feel free to say, "Please leave my name out of it." So this listener was writing in to me about a challenging family circumstance, and it involves long-term care.

And basically I'll summarize the facts for you. Again, I don't have complete facts, but I was able to figure out some of the information. I'll summarize the facts for you. This listener says, "My dad just had a stroke, and he's in the hospital. He's getting out of the hospital, but he's not doing well.

And he's 81 years old, and his mom is about 20 years younger, so I'm assuming 61 years old, 62, somewhere in that range. And evidently his health has not been good for a good number of years. He's actually been out of work for about 30 years due to some physical problems that he's faced.

And now he's just had a stroke. And then the good thing about the stroke is that as part of being involved in the hospital and as part of being involved in the medical system, they diagnosed him as having some advanced degree of dementia, which really helped the listener to understand a little bit more about what was going on.

His relationship with his father had been very challenging over the previous years, and now he understands a little bit better, ah, it was probably due partly to the dementia. And so that was really, in some ways, although it's not a pleasant diagnosis, in some ways it's really helpful to at least understand that there's some real chemical issue in the brain that would help to explain some of the off behavior.

But the problem is, what do we do? We're not exactly sure what to do. Mom and dad live alone. They're together. They're together with each other, but they don't live with any family. They're about an hour or so away from the sun, so quite a ways away. The listener says, "I'm not able to financially, "due to my situation, "I'm not able to make a large contribution." And so I inquired about some of the numbers, and he shared with me, "Dad has about $800 a month coming in in Social Security income.

"Mom works and makes about $18,000 a year doing various things." So if you add those numbers together, they give you an annual income of about $27,600. They have maybe about $5,000 of savings, and they have a paid-off piece of property, about three acres of land out in the country, maybe worth about $50,000, and then a mobile home on top of that that's falling into disrepair little by little.

And so he's an only child, and he says, "What do I do?" And my heart goes out to him, because long-term care planning is something that's near and dear to my heart. And I may have shared on a previous episode, my grandfather had dementia for, I think it was five or six years, somewhere about the age of about 90 to 95.

It's hard with dementia to always pinpoint, "Here's exactly the point where it starts." Many of you have worked through it with a family member with dementia or Alzheimer's. It's hard to point and say, "This was the day that it happened." But about five years is my memory is correct.

And it's just a steadily progressing disease where it just steadily gets worse and worse and worse. And it's so tough to see a loved one that you know, a loved one that you know and love going down. And you don't have any hope that they're going to get better.

And it's especially tough to deal with as a disease because it doesn't necessarily affect the body. It doesn't necessarily affect the physical health of the person who has the disease. So my grandfather, for example, he retired when he was in his mid to late 80s. I get dates confused just about every time.

He was 84, I think, is when he retired, something like that. But he was hearty and healthy and full of vigor and full of life. Retirement kind of did him in a little bit. Once he retired and actually sat down, he started to get old quickly. But then he started to face dementia.

And in working with dementia, I learned a lot kind of going through it as a young man trying to work and help my parents out. And it's really challenging. And one of the biggest challenges of dementia is that it doesn't affect you physically. So you don't--unlike some diseases where you maybe have a diagnosis of cancer and the physician may be able to estimate, well, this is your life expectancy, or some other diseases where you can say, well, this isn't necessarily expected to affect your life expectancy.

With dementia, it doesn't affect your physical health; it affects your mental health. So you may be healthy as anything, and so it's very unknown as far as how to plan for it. And yet it's extremely challenging and extremely draining to work through that from a care perspective. And so my heart went out to this listener.

And since I heard of his situation, I've just been thinking about the question and thinking about the question, trying to figure out what the answer is. And it's tough because in some ways there is no answer. And I'll try to do better than that. I'll try to give some ideas, but in some ways there is no answer.

And I'm going to say some things, and I know the listener is listening, and I just want to say my heart is filled with compassion and empathy, and I wish that I had some good answers for you. I don't know of any good financial answer for the situation because there's not a lot to work with.

And I'll give you ideas. I've got some ideas of some programs for you to research and just kind of walk you through how I would approach it. But at the end of the day, I don't have a good answer. But I want to bring a situation like this forward to encourage the rest of you to consider doing some planning up front.

Because if you'll do some planning in advance for these things, then it's not going to make them emotionally easier, but it may make them a little bit easier if there's some plans in place already. And this is essentially how I think about financial planning. I don't understand why people don't want to do financial planning.

This has been one of those circuits in my head that has never made sense to me because I guess I always joke about, well, you're going to die, so make sure you die with a will in force. Chances are this could happen. And for some reason that's never bothered me, but I know it really bothers some people to think about this planning.

But I tell you, when you see somebody go through a tough situation, it really helps you to say, well, I've got to do some planning. And you've got to do what you can. You've got to do what you can when you can. I don't think necessarily financial planning is the magic cure that's going to fix everything.

Not everybody is poor and broke because there's something somehow wrong with them morally or that they're just somehow not smart. That's not the case at all. There is bad luck that happens. There are situations that are beyond people's control. People get beat down. There are things that can happen, and that's across the board, that things can happen to all of us.

And so I don't think there's any amount of planning that can guarantee anything. But I do believe that no matter the situation, a little bit of planning and some ideas can make the situation better. We see this all the time in our culture. That's why there are stories that are constantly written about somebody who is sick and look at how even though they were sick or even though they were an amputee, they still ran the marathon.

I mean, bad luck can--if you're a soldier, bad luck. You walk over a bomb or an IED or a claymore or whatever they're called nowadays. You walk over a bomb and your legs are gone. That's bad luck. But once it's done, it's done. You've got to make the best of it.

So that's kind of how I think about financial planning. So I'm going to do my best to give this listener some ideas, some very practical ideas, some programs to research, but also some big-picture ideas. But none of this is intended to be cruel, and it's a little hard when it's impersonal where maybe you can't sense my empathy or my compassion, but I want to give you some answers.

But I also want to use it as a learning experience. First thing, this situation, the listener being an only child and having ailing, aging parents, and then this listener not being able to help his parents very much, this is the situation that we face generationally in this country. And right now it's especially prominent.

The term that goes for it is the sandwich generation. And I don't know if this listener has children or not, but it really doesn't matter. It's especially more difficult with children. But what happens is there are millions and millions of us throughout the country who are now finding ourselves in this position or who will find ourselves in the position in the future, who will find ourselves in the position of needing to care for our aging parents and of caring for our own children at the same time.

And this is incredibly challenging and incredibly stressful. And there are some demographic changes that have made this very challenging. And it comes down to the small number of children and the dispersion of families and the adjustments and changes in lifestyle. Now, I'm not going to make some values judgments on these things.

You do what you want with them. But these are demographic realities, and they're facing all of us, which leads to the need for planning. And I'm going to draw some generalizations. I recognize they're generalizations, and they may not apply in every case, but I think it's important to understand and to think about because this question does not need only a financial answer.

In the past, traditionally, how have we cared for our elderly and aged parents? Well, normally in the past, traditionally, the family unit was a lot tighter, a lot bigger, and a lot closer together. So in the past, we've had a society-- and again, I recognize I'm idealizing a little bit, but I still think it's valid to do so in this situation to draw the lesson.

In the past, we've had a society where the family units were much closer together. So we look at the Norman Rockwell painting of traditional U.S. America, and we see the family sitting down for dinner every day. Did that happen all the time? No. Were their families broken apart? Yes.

But more than there is now, the family unit was in many ways much tighter, much closer relationship. There was a much larger family unit, and the work among the family unit was generally more integrated. So in an agrarian society, it would be very normal that children would grow up working with their parents every day, working with their parents, spending time with their parents, helping in the family enterprise.

Traditionally, in the traditional view, this would be an agrarian enterprise, a farm. So on a farm, the children are working with the parents every day and really building this close-knit family. And then it would be unusual for the children to grow up and move very far away. Traditionally, in agrarian societies, generally, people will live somewhat close to where they were born and where they were from.

And usually, you would have a high number of children, a much higher number of children than we have now. So maybe an average of 5 to 6 to 7 to 8 children, depending on what part of the world that you're in. Well, if you fast forward to today and look at how different our lifestyles are-- OK, so before I go there, then as the parents age, traditionally, a farmer would never retire.

I have a grandfather who was a farmer, the other grandfather, not the one who had dementia, although he also was a farmer, rancher, earlier in his life. But I have a grandfather who was a farmer, and he never retired. He died at 93 years old, and he never retired.

He had to pull back. At the end of his life, he wasn't really able to go to the farm, but he was still working on paperwork. And so traditionally, as you aged, you were still part of the family, still part of the community, and you just simply took over some of the easier jobs that were less physically taxing.

But you were still part and still very engaged. So I think people, because they felt engaged and as part of society, in my opinion, I think people aged a little bit more gracefully, and the family was able to help. So if all of the work is centered around the home, and so on the farm you have the farmhouse, you have the fields and everything relatively nearby, and if all of the work is centered on the home, you're always going to have many people there working.

It's much simpler to have caretakers around to care for the aging parents. And so this makes, traditionally, people cared for their parents themselves. They've been able to produce and be productive, even though they're not necessarily earning an income. A grandparent can care for a grandchild much more easily. A grandparent can still help out with certain less physically demanding tasks.

And so this is kind of the historical view. Well, fast forward, and there's been this dramatic shift over a couple of generations, and the dramatic shift has encompassed a few things. Number one, instead of an agrarian society, you have an industrialized society. So instead of home-based employment, where the family unit is working together, we have out-of-the-home-based employment, where the family unit is split.

And traditionally, the male in this country may have been out of the house, and now it's more normal that both parents are out of the house. So this leads to a much more fragmented family. This leads to less time with the parents spending time with the children. This leads to the need to hire people for the raising of children, which is where you have the public education system comes in, and whether it's aspects of education, which is usually how it's thought of, or whether it's aspects of child care, which I believe there is, if you go and study it, there would be some evidence to say that that wasn't necessarily ignored when the system was established in the way it is, is that to make the transition to an industrialized society, and to incorporate both workers into the workforce, so that you can reduce the cost of the workers by increasing the supply of labor, go research it.

I'm not convinced of it, but certainly there is literature that would indicate that people were not surprised by that development. Then, if you were to go and research this, you would find that we need something to care for the children, so therefore you have school that happens during work hours, and this provides for the child care.

Well, this leads to a more fragmented family, where children and parents have a less intimate relationship with each other. They may be very busy, less together. We're not working on a common family enterprise, but we're each working on our own enterprises. Father and mother each have their own jobs.

Children are encouraged to have their own jobs, and it's unusual if you find a family that's working together. Then this leads to a geographic dispersion, so with the increase in monetary wealth, with the pool of jobs, it's very abnormal for people to stay close to where they are at home.

With the reduction of the number of children, you have a dramatic change, where now you have one or two children. You have one child, in the case of this author, and this child has two parents. Instead of five children and two parents. So you have this dramatic generational change.

Two children, two parents, one child, two parents. Then when you take that into a spouse, and you say, "Okay, we have a male spouse who has his parents, and a female spouse has her parents, and maybe there's one or two siblings among them." Now we wind up in a situation where we may have four parents and two children to care for the four parents, or two, three, four children, depending on the numbers.

Then in an age of changing family dynamics, it's more likely that it's possible that the parents are divorced, and now we have parents and step-parents. Now you're in a situation where instead of it just being one couple with a total of four parents, there's all the other step-parents involved.

So it changes the dynamic. This is the reality that's facing the Social Security system, of the reduced number of workers that are working based upon the increased number of retirees. This is the challenge that's facing us demographically in this country. Well, it hits close to home when it comes to long-term care, because that means that all of the responsibility for the care of the parents, should the child choose to assume that responsibility as a child, is placed upon one or two children.

This can be very challenging. So with these demographic changes, it leads to a difficult situation. I point it out because it leads to a need for a whole new area of planning. It is simply how do we care for ourselves as we age? In the past, it was simple.

Family. That was the answer. It's that the family will care for me, so there's no problem. The family had the capacity. But how on earth do you have the capacity nowadays? How on earth do you have the capacity if you have children that are working, financially challenged, not able to necessarily do extremely well economically for them, and now they are faced with the challenge of supporting and being responsible for their parents as their parents need to care as they get older?

So then that leads to the natural growth of the government programs that are in place. That leads to those government programs being overly taxed, which is what has happened with the government programs for care. One of the things that I have observed in paying attention to it is that while the expansion of traditional health insurance benefits has been steady over time, where those programs have been--the government has little by little increasingly picked up the expansion of those-- expanded their care up to and including the Affordable Care Act and the changes that that has brought in the health insurance marketplace, it has been the--quietly over the last couple of decades, it has been the exact opposite in the areas of long-term care.

And long-term care meaning ongoing custodial care, not for a critical illness that is expected to get better, but ongoing custodial care for something that is not expected to get better. And so if you go back and you trace the history of the tax law--I won't do that today in a Q&A show-- but if you go back and trace the history, little by little, benefits have been removed consistently and steadily, even to the point of one of the things that got very little news, except among the professional advisor community, was there was a component of the Affordable Care Act called the CLASS Act.

And I think that CLASS, if my memory is correct, stood for Community Living Assistance Something or Other, something like that, Community Living Assistance Program, and it was basically a federally organized version of long-term care insurance. Well, the program was such a disaster, actuarially speaking, and everyone knew it was and everyone said it was, that it was just quietly eliminated about--I think it was a year or so after it was passed, maybe a couple of years--the dates are fuzzy in my mind.

So the benefits that are available, the government benefits, facing this demographic problem, the government benefits have been steadily reduced, have been steadily drawn back because there's no money available to pay for them. And so this is a big, big area of planning that we need to pay attention to, especially as we're responsible for guiding people.

I'm not going to go deep into long-term care plan today, but I'll tell you the one that ticks me off is when people put an age in for long-term care. "Well, you should start planning for long-term care at age 60." Guess what? You should start planning for long-term care as soon as you're around, but you need to figure out where it comes in in your terms of financial priorities, and I'll cover that another time.

But if you can ever prove to me--this one drives me nuts-- if you can ever prove to me an age where all of a sudden it makes sense to plan for long-term care that age and it didn't before that and it doesn't after that, it's absolutely ridiculous to put an age on this.

Plan for it when you can, and I promise we'll do extensive, in-depth planning shows on long-term care. So we need to do planning, and this is going to be a very challenging situation for this listener. And I don't know how challenging. The listener's father may be in excellent shape after he comes out of the hospital and may be able to care for himself, but then again he may need full-time care on an ongoing basis.

And so it's impossible for, obviously, me to know, and I've just had an email that I'm answering publicly here, but I hope that I can have some thoughts and some ideas. So where I want to start with this is anytime you're starting with long-term care planning, start with the non-financial stuff.

Don't start with the numbers, because no matter what the numbers are, just start with the non-financial stuff. And the biggest misconception about long-term care is that it's a financial planning situation. It is, and you can do some things with financial planning, but I say start with non-financial. And in this situation, I want to speak directly to this listener, you need to do some careful thinking and research on the impact that care and caregiving has on family.

It can be an incredible blessing to care for your aging parents. I consider myself very fortunate to have been able to serve and to honor and to love my grandparents as they aged. What a way to give back for those who have cared for you and provided for you.

And my parents are in excellent health, but should the opportunity arise to care for them, I will consider it an honor and a blessing to be able to serve them in a way to honor our parents. So it is an incredible blessing. It's also an incredible challenge. And I want to read you some statistics here.

And these statistics I'm pulling from, this is a little bit old, a 2004 National Alliance for Caregiving Survey. And there are a few different sources of this list of statistics that I'm going to read, but I think they hold valid. So first of all, the majority of care that is provided for people who are chronically ill is provided by informal caregivers.

And informal caregivers simply means family members, unpaid caregivers. So this would be you caring for your parents and providing the physical daily care that they need. Many children are going to be expected to care for their parents. And the challenge is that caring for the chronically ill parent often makes the caregiver chronically ill.

And this is an incredible epidemic that most people just simply aren't familiar with. But I guarantee if you've been involved in the care of a parent or grandparent, you're nodding your head with me right now, is that it is a tremendous challenge and a tremendous burden on the family.

It can be a joyful burden and an honor, like I said, but it's a burden. There's about 45 million informal caregivers in the United States, 21% of the adult population. So in 21% of households, there's an informal caregiver. 60% of these informal caregivers are women, 40% are men. Women still account for most of the caregiving hours per week, about 71%, although it is estimated that the percentages of men giving care will increase substantially because future families will have fewer children.

The median age of informal caregivers is 45 years old. 62% of informal caregivers are married. 41% have children under 18 at home. Informal caregivers contribute on an average $200 out of their own pockets per month to subsidize care, so just simply contributing money out of pocket to pay for people to give them relief from the care.

67% reported providing care between 8 and 20 hours per week. On average, an informal caregiver provides care for 4½ years. Informal caregivers provided services that if they had been provided formally would have cost around $350 billion, about the same as Medicare's total spending. 22% of informal caregivers to the elderly are depressed, around twice the rate in the population as a whole.

55% of caregivers living with dementia patients suffer clinical depression. I'm going to repeat that. 55% of caregivers living with dementia patients suffer clinical depression. It is incredibly challenging to care for somebody with dementia on an ongoing basis, and you need to be very, very careful, very, very careful to make sure that you are providing the support for the caregiver.

An elderly informal caregiver has a significant risk of death as a result of his or her sick spouse's hospitalization. The risk to spouses was highest when the hospitalization was for a chronic disabling illness like dementia. Quote, "What this shows is that people are interconnected, and their health is interconnected, and seeing a person that you love suffer, seeing them ill, harms you," said study co-author Dr.

Nicholas Christakis of the Harvard Medical School. Elderly informal caregivers run a 63% higher risk of dying from stress-related illnesses. Informal caregivers who responded that their health has gotten worse as a result of caregiving most commonly report a loss of energy and sleep, 87%. Stress or panic attacks, 70%. Aches or pain, 60%.

Depression, 52%. Headaches, 41%. And weight gain or loss, 38%. In addition, they tend to spend less time with family or friends, 69%, and at work, 37%. Abuse of the elderly by family members has risen significantly, 73% of caregivers listed prayer as the best way to cope with the stress and sadness of providing care.

Alzheimer's disease is a major cause of the need for long-term care. One in eight people 65 and older have the mind-destroying illness. Half of all people over 85 are affected. Ten million Americans are currently caring for a person with Alzheimer's disease and tend to be stressed to the breaking point financially, emotionally, and physically.

The challenges about distance between -- the challenges about distance from parents. This is a study from MetLife. 15% of caregivers leave at least one hour away from their parents. 33% provide care at least once a week. Respondents estimated that care and travel amounted to one full workday per week.

23% reported that they were the only caregivers their parents had. Nearly 50% stated they spent an additional 3.4 to 4 hours per week arranging or monitoring care. 40% reported providing direct assistance with the most difficult activities of daily living. Caregivers reported spending an average of $199 per month on travel, in addition to the $200 per month they spend to help their parents.

And so one quote here from this book that I'm referencing here is a quote out of a PBS documentary entitled "And Thou Shalt Honor It." And one woman when being interviewed replied, "When I got married, I never really understood the vow in sickness and in health. Now I do.

His sickness, my health. For it to be easy for me, it would have to be over for my husband. That's unacceptable. I often wonder, will there be anything left of me when he passes away? Will there be anything left for me?" It's probably a good place to stop. So I take a moment just to read those statistics because I had seen prior to my learning those statistics, and I learned that years ago.

I was reading those statistics from a manual that I had, a financial planning manual for a certification I got years ago called the Certification in Long-Term Care Planning. And when I read those statistics, it was the first designation that I went out and pursued after becoming a financial planner because of my experience with it and also because it was kind of an easier designation to get.

And when I read those statistics, I was just stunned. I had never had any idea. And, again, those are a little bit dated. I'm sure they're even more significant now. So I point them out to you just to be aware of them because this makes a big difference. Now, if you're aware of something, you can put plans in place to avoid the major problems.

So, for example, if you're aware of the fact that a tremendous percentage of parents-- I forget the statistics. I'll have to check them some other time. But if you're aware of the fact that there is a tremendously high divorce rate among parents who have either lost a child to death or who are dealing with a child who's disabled, then if you lose a child to death or you have a child who's disabled, you can plan for that and you can recognize, "My marriage is in danger.

I need to take extra special steps for this." Or if you're aware of the fact that the majority of lottery winners become broke or bankrupt soon after winning their lotteries, then if you win the lottery, then you can make plans and you can say, "Wait, I need some careful and special-- this doesn't have to happen, but I need to do something very carefully to make sure that I avoid it." So I spent a lot of time with those statistics to say, "You need to recognize," speaking to the listener, "You need to recognize that in the situation you described to me with an 81-year-old father and a mother who's 20 years younger who will be his primary caregiver, the tremendous amount of stress that she will be under and how that can affect her health and her happiness tremendously.

And you need to put plans in place to avoid that. You also need to recognize the tremendous stress that it's going to place on you and on your marriage and put plans in place to deal with that as best you can. It's going to be financial stress-- again, the average is $200 a month of contributions to pay a caregiver to give your parents some sort of extra help, plus $200 a month of travel expenses just to get there.

And you can understand if you live an hour away from your parents and you're going to travel there for one hour a week-- excuse me, at least a day or two a week-- that's going to bring a tremendous financial burden just doing gasoline and wear and tear on a vehicle.

So we need to make some plans that are going to help to improve this. Now, unfortunately, I don't have any good plans because you've got to look at the actual situation. You've got to say, "Well, what do my parents need? What do they have? Is there a way that we could somehow live together to diminish costs?" Now, that may or may not be possible depending on the situation.

"Is there a way that I can contribute financially? Is there a way that--?" You've got to find a plan. I'm going to talk through some of the benefits that you need to research to see what's available to you as far as for extra help. But the big thing is not going to be any kind of benefits because, frankly, there are none.

And I say that as a blanket statement. There are a few, but there's generally not much. And this is because it's an epidemic that we're facing in the country. And unless you've done prior planning and unless you've saved money for this situation, unless you have money to pay for a caregiver, a formal caregiver, or unless you have something like a long-term care insurance policy that can fund it, then there's not a financial solution.

There's not. You have to commit to providing the care and figuring it out as you go. Now, you shouldn't feel bad about not planning because the reality is that if you had started five years ago with this planning and you were sitting in my office and we said, "Okay, if your dad and mom as we're sitting there and your dad is 75 years old," and then considering some of the other health problems that you shared with me, I would have said there's nothing you can do.

It's too late. It's too late. After those health problems, after you have certain health problems, you can't buy insurance, and you don't have the money, and you're not working. So don't beat yourself up about not doing the planning in the past. Just recognize that it's going to be very much a non-financial answer, not so much a financial answer.

So continuing on, okay. I've got to pick up the pace here. So what do you need to do? You need to start researching. There is no one place that I would encourage--that I can send you to to say, "Here's the information. I'm going to give you some ideas of some things that I think you need to research and some programs to investigate," and a broad brush stroke of how they work to see, to see what may or may not be available to you.

But the key is you've got to become a researching hound to find the information that you need. It's not served up to you on a platter anywhere that I've ever been able to find. First of all, you said that your father was a Korean War veteran. This is good because there may be some veteran benefits, although it's usually unlikely.

So first of all, what about veteran benefits of the traditional--the health insurance benefits? You should know by this point what benefits your father is entitled to. And in general, the Veterans Administration will provide some long-term care benefits. And real quick, a quick thing you need to understand. Long-term care--when I use that word, what long-term care refers to is long-term care refers to something called a chronic illness.

And a chronic illness is for something that's not expected to get better. So the example here would be Alzheimer's. Alzheimer's is not expected to get better. There's no cure that anyone that I'm aware of, anyone has found for Alzheimer's. There's not really any treatment that I know that can be expected to improve it, although maybe it could be slowed down through brain stimulation and physical exercise.

I've read some of the studies on that, but I'm not aware of somebody saying we can improve the situation through this certain treatment program. So something like Alzheimer's, once you're diagnosed with Alzheimer's, it's something you have, and you're not going to get any--it's not expected to get better. Now, that would be compared with falling and breaking your leg.

Well, that's considered to be an acute illness, and it's something that is going to get better. So when I say long-term care, I'm talking about ongoing what's called custodial care, care with the activities of daily living, care with bathing, dressing, help assistance with toileting, with transferring between a bed and a chair, those types of things, those are all considered to be activities of daily living.

And if you spend some time--so that's custodial care. So when I talk about long-term care, I'm talking about ongoing custodial care, not, okay, you went into the hospital. Your father is covered under the Veterans System and also under Medicare. So that's going to take care of some of the hospital benefits based upon what part Medicare is he in, does he have a supplement plan or not.

That's all you should be familiar with that by this point. But the Veterans Administration provides limited long-term care services, but they do it based upon priorities. And so, as you should be familiar with by now, the veterans' benefits are divided into eight tiers, so tiers one through eight with some sub-tiers based upon whether or not a veteran has a service-related disability, so a disability that was related to their service in the military.

And so priority group one is veterans that have a service-related disability, that is 50% or more disabling, or veterans who were determined by the VA to be unemployable due to service-related--service-connected conditions. So if you are extremely disabled because of some injury that you received while being in military service, then you're in priority group one.

And in this situation, there's a very high chance that you will qualify for long-term care benefits under the veteran system. Priority group two would be veterans with service-connected disabilities rated 30% or 40% disabling. Priority group three, veterans with service-connected disabilities rated 10% or 20% disabling. Veterans who were former prisoners of war, veterans awarded the Purple Heart, veterans whose discharge was for a disability that began in the line of duty, veterans who were disabled because of VA treatment or participation in a VA vocational rehabilitation program, and it goes on down through the eight lists.

And if you go down into groups six, seven, and eight, there's sub-priorities. So in group eight, for example, group eight--priority group eight, veterans who agree to pay a specified copayment with income and/or net worth above the VA means test threshold and the geographic means test threshold. Sub-priority A, non-compensable 0% service-connected veterans enrolled as of January blah, blah, blah.

So there's all these sub-priorities. Go Google it. You'll find it right on the Veterans Administration website, all this information. You want to find out what group your father is in and just see if there's any chance of getting benefits. I do not know how far down this list they are currently providing benefits.

In the past, when I have researched it, it was only the first few, and basically as the costs have gone up and as the budgets have gotten more thin, the VA has had to cut back on benefits. So the best thing to do there is just become very close to the VA consultants that are at the VA and see if there's some program that they know of.

Now one thing that would not necessarily be connected to that priority system would be what's called the aid and attendance special pension. And so what this is is the special pension that will pay for additional amounts of money for a veteran who is receiving care at home. So I will put a link in--I'll put a link in the show notes here.

I'll put two links here, one from VeteranAid.org and the other from Benefits.VA.gov. And so the VeteranAid.org says, "Eligibility for the aid and attendance pension. Any wartime veteran with 90 days of active duty, one day beginning or ending during a period of war, is eligible to apply for the aid and attendance improved pension.

A surviving spouse, marriage must have ended due to death of a veteran or of a wartime veteran, may also apply. The individual applying must qualify both medically and financially. To see the periods of war that have been qualified by Congress, follow this link. To qualify medically, a wartime veteran or surviving spouse must need the assistance of another person to perform daily tasks such as eating, dressing, undressing, taking care of the needs of nature, etc.

Being blind or in a nursing home for mental or physical incapacity or residing in an assisted living facility also qualifies." And it goes on and talks about how to get eligibility. So this is an additional pension benefit that you may be eligible of in addition to the other monthly pension benefits.

So you would want to research this. You need to be housebound. And so this might be an option where even at housebound with in-home care, if your father needs in-home care, this may be something where you may be eligible for an additional pension. Now, depending on the income limits, you need to check out the income limits on this program and you need to look at the eligibility limits.

But this would be something that would be something to research and see if you would qualify or not. As far as any TRICARE benefits, TRICARE doesn't cover long-term care. Basically, that's the broad brush stroke because TRICARE is similar to health insurance. So let's just leave it there and not talk about any exceptions to any of that.

So the next program, Medicare and Medicaid. So in broad strokes, Medicare will not provide any long-term care benefits. So now that I've said that, here's what they will provide. Long-term care -- excuse me, Medicare will provide long-term care benefits if care is received in a nursing home following, I think it's a three-day hospital stay.

And the way they do that is they will pay for the first 20 days of care that are needed in a nursing home after a hospital stay. They'll pay for the first 20 days each 100%. And then they will help pay for days 20 through 100 as long as you pay a daily copay.

And I think the current daily copay rate is in the vicinity of about $150 a day. So if your father is getting out of the hospital and he goes into a nursing home, Medicare -- because he's in the hospital for a stroke, Medicare will pay for the first 20 days, and then for days 20 through 100, you'll pay $150 a day copay and Medicare will pick up the balance.

After 100 days, there are no more Medicare benefits available. So in general, Medicare is not a solution for ongoing long-term care. That's why I say Medicare doesn't provide any long-term care benefits. Now Medicaid, which is financial assistance for people for their health situations who are broken and who don't have any money and don't have any assets, Medicaid will provide long-term care benefits.

In general, Medicaid will provide long-term care benefits primarily in nursing homes. Now there have been some changes in this situation over the last few years where Medicaid has been testing various programs in different states to try to provide more in-home health care. And there's something that's -- this is a challenging area of government policy because when they try to provide in-home health care, that's cheaper.

It's cheaper for the -- it would be cheaper for the government to provide in-home health care for many people more so than providing for facilities. So just go with nursing home versus in-home health care to simplify our example. It's cheaper to provide in-home health care. Now the concern is that if those benefits are too generous, then what will happen is that because the majority of people receiving care are currently doing it informally with no compensation, so this would be your mom caring for your dad at home, she's not going to get any compensation for doing it informally.

Because they're currently receiving care informally, if Medicaid starts paying for people to receive in-home health care, the concern is that there's going to be caregivers coming from all over the place, coming out of the woodwork and saying, hey, pay us money or just pay for me to keep my family member at home and that way I can do less of the physical work of the care and yet they can still be at home.

So the concern is that if Medicaid starts paying for people to receive in-home health care, they can still be at home. They actually call this the woodwork principle and it's a big deal in government policy to try to figure this out. Now Medicaid is a state-run program, so each individual state will have their own benefits.

And again, various states are testing their programs. I don't know which state you live in. I live in Florida, so I'm somewhat familiar with Florida's Medicaid laws, but I'm not familiar with your state, and so I'm not going to make any comment about what your state will do. Just remember that as a big, broad brush stroke.

In general, Medicaid will provide for care. Most of the care they'll provide is for a nursing home. And this is kind of the constant challenge because very few people want their family members to be in a nursing home. Most people would prefer their family members to be in the comfort of their own home where they're familiar with the surroundings and they're comfortable and have the things that they value around them.

However, there are very few government benefits available for that. So you want to make sure that you are aware of that. If you feel that Medicaid is going to be a solution, if you check out your services and you check out the information on your state's Medicaid programs, you need to find out the qualification and how do you qualify it and what are the restrictions on qualifications.

In order to qualify for Medicaid, you have to have income and assets under certain strict numbers, and then you have to qualify medically. So you have to have income and assets under certain numbers. With each state, it's a little bit different. But in general, there are three different categories of assets.

There are what are called countable assets, which are called non-exempt or available assets in some states. There are non-countable assets or exempt assets. And then there are inaccessible assets. And so the key is to look at your parents' asset mix and figure out which of their assets under your state's Medicaid laws would be countable assets versus non-countable assets.

So countable assets are any personal resources that are owned or controlled by an applicant for Medicaid benefits. So these must be spent on care before qualifying for Medicaid. Usually this would include stocks, bonds, cash, investments, pension plans, annuities, a primary residence, life insurance, vacation properties, investment properties, basically any assets.

With a primary residence, there's almost always an exception for a spouse. So we'll talk about that in a second. Then you have the non-countable assets, which would be a small amount of money, usually a few thousand bucks. Primary residence, especially if there's a spouse that is surviving, a community-based spouse.

Maybe some life insurance, some term life insurance, or some kind of business assets, and maybe an inexpensive car for personal use, and then various personal items. In general, Medicaid, you're going to have to get rid of all of your assets except for those non-countable assets. As far as the primary residence, there may be a state, a cap on an amount of value that's set by your state.

It's usually either about a half a million or $750,000. So under this scenario, your dad's house would be fine. Then also there's usually exceptions for the spouse. The laws are generally written such that you're not going to be required to impoverish your mother in order to provide for your father.

In general, that's going to be the situation. Again, there are exceptions. So check your state's Medicaid laws to see what your actual situation would be. Then you're going to look at inaccessible assets. Inaccessible assets would be anything that the government says this has to be provided for the care.

So they're trying to -- maybe if this would be where you get into the situation where someone's trying to transfer assets to their children or transfer assets to a friend, and then the Medicaid administrator looks at it and says, "Well, this is a fraudulent transfer. Even though this asset isn't accessible to you, it has to be spent on your care before you're eligible for Medicaid." There is now a five-year look-back period for Medicaid eligibility.

So what that means is that on the date that you go to apply for Medicaid, there is a five-year look-back period under which the Medicaid administrator can technically undo any financial transactions that you have done or count them towards your Medicaid bill. So, for example, if you have half a million dollars of cash and you transfer that to your son and then you go and apply for Medicaid the next day, well, that transfer is going to -- you're going to have to spend that half a million dollars is going to have to be spent on your care before Medicaid will provide you with the care that you need.

So this is a much longer transfer period. So you would want to consider doing some Medicaid planning. Now, in your situation, it's going to sound pretty simple, but once you research your state's Medicaid laws, it might be worthwhile for you to just look at your parents' assets and prepare your father to qualify for Medicaid whether or not you choose to apply.

And so knowing that there's going to be a five-year look-back period and not knowing whether your father is going to live for 10 or 15 years, if he has any assets that are going to disqualify him for that, then you may consider doing some Medicaid planning. And I'm going to basically quit with that and stop there just because it's so state law dependent.

Now, you want to be careful with this because there may be other tax considerations. For example, maybe with their property -- so this would be where, as you're considering your plan, let's say that you mentioned your parents live out in the country and it's far away from you. That's probably not a place that's very conducive to your parents receiving care.

It may be a lot better for your parents to receive care in a town where there can be a caregiver that's nearby that can come by and help out. So you're going to have some trouble. You're not probably going to want to consider selling that. But if all of a sudden you say, "Okay, we've got a non-accountable asset.

We've got a privately owned residence here with a spouse that's living in it, and then we go and sell that asset, and now we've got $100,000 sitting in a checking account. Well, now we've changed a non-accountable asset into an accountable asset. And so now that $100,000 has to be spent on the cost of care before we can qualify for Medicaid." So that would be something that you would want to be careful of.

Now, you may want to sell that property and move to another property, or you may be able to arrange some other plan. Like, there are many things that you can do, and again, without knowing the situation, I can't give you more information than this just to say this is how I would think through it.

And I would encourage you to contact a qualified planner locally and have them help you to talk through some of these things. So consider Medicaid planning. Consider just taking a look at what assets would need to be spent down. Consider doing this. The rules have tightened up significantly, so be suspicious of anything.

So assume anything you hear or read about Medicaid planning is probably wrong until you check it out. Because in the past, there were many things that could be done. There were certain trusts that you could establish and you could transfer your assets into that. There were certain transfers of assets that you could accomplish, but all of those laws have been tightened up.

It doesn't mean there's not something available. There are various planning tools available, and without -- it's already gone on much longer than I thought. So without going into the depths of Medicaid planning, I would just encourage you to consider just researching it, find some books on it, and consider speaking with an elder law attorney and finding someone who is qualified with your state's information.

So there are various tools that you could use. There are various things that you could look at, but I think that's enough for that. My next point and my last three points, and with this I'm done, and I may have to cut off and not answer the next question.

I've gone a lot longer on this than I intended to. So the next one would be look for and research any kind of community-based programs. So there's not going to be a magic bullet, at least that I've ever found, that's going to solve your financial problem. But there may be some local community programs that may be helpful to you.

And so look for things like community programs such as Meals on Wheels. Those types of programs are usually community-based. They're often not a cost, and so that can help. So that can help relieve some of the burden. Now you may have to go out and research those things. There are many programs out there, but you have to really take it on and just talk to everybody.

So get in the habit of talking to everybody and saying, "Do you know of anything that you can help?" And you'll find something there in whatever little local town is. You may find a program that's available that I don't have any concept of here in West Palm Beach, Florida.

So look for any kind of community-based programs. Consider research to see if there are any adult daycare facilities. So this is another form of community-based care that can really be a blessing. And maybe there's something that's at a discounted cost, and this would allow -- an adult daycare facility is essentially an opportunity program that's set up where you can take your person -- where the person who's needing care can be cared for during the day in a community-based setting so that the caregiver can go to work.

So if your mom is working continually, then she would be able to continue working while someone else would care for her husband during the day, and then she would have the care in the morning and at night. So consider that and research to see if there's something available. Sometimes there are hospice benefits that are available.

I know that when we were caring for my grandfather, the hospice organization was incredibly beneficial. And although they couldn't send a nurse out, they couldn't send a nurse out to help full-time and just do things. They could send a nurse out -- because of my grandfather's condition, they could send a nurse out for one or two times per week.

And that's incredibly helpful because it provides what's called respite care, which is basically just to give the primary caregiver a respite, a break from the care. And so it was incredibly valuable to have an evening where my parents could get out of the house and have an evening off, because that's the big thing, is that when you're primarily responsible, it's a 24-hour a day, 7-day-a-week care that's being provided.

And so it's a blessing to be able to have a day off. Consider to see if there's some kind of inexpensive way that you can get some help. So instead of hiring a large home health care agency where you're going to negotiate a contract for 8 hours a day and your monthly cost is going to be $5,000, that's not going to be feasible.

But do some research to see if maybe there is a long-term care nurse that would like, on the side, to come by for a little bit in the evening, for an hour on her way home, or come by in the morning for an hour on his way home, or on an hour on his way to work, or things like that, to care.

And in exchange for a much smaller amount of money, they can provide a little bit of care, and that can be tremendously valuable. I know we negotiated that in my family, and it was an incredible blessing just to have somebody come by for a half hour, an hour in the morning, and a half hour, an hour in the evening.

And then it really made the physical needs of care a lot better and really made it a lot helpful. So look for some of these alternative strategies. Also, the other idea that I would have is in the example you described to me with your parents, with your father being older and your mother being younger, consider to see and research to see if you could get some additional Social Security income for her based upon filing for a spousal benefit and then deferring her own benefit.

So perhaps she can file a spousal Social Security benefit, depending on her age. I think you have to be at least 62 years old. So she could file for her spousal benefits and receive a partial Social Security benefit while still continuing to accrue her own retirement benefit. And then she can defer her own retirement record up until the maximum latest age, hopefully at least until 70.

So that will help her to be able to provide for herself down the road. It would be a major mistake for her to apply based upon the income scenario that you described to me. It would be a major mistake for her to apply at 62 to be able to -- at 62 for her retirement benefits.

But if she could file on a spousal benefit on her husband and then continue to accrue her own benefits and file on her own record at 70 with a much higher benefit after it's had the time to be the late benefit and after she's had time to continue contributing to the system under her earnings, that might really make a big difference.

Last thing is this. And I think I am going to stop with just this one question. And I apologize to -- I think it was Jason who had asked me the question on the 401(k). I didn't mean to go on this long about this question, but this is a big passion of mine and I want to provide this as a helpful resource.

And the last thing I would say is this. It's very challenging when you're in the middle of a situation like this to figure out kind of what's next. And we don't know what's next. We don't know if your father is going to have another stroke and next month he's going to die or we don't know if we're going to be caring for him for the next 10 years.

Nobody knows. So be flexible. But do whatever you can to try to make it the most amazing situation that you can. And one of the things that I've observed, and I see this happening a lot, is if your mother is not working in a job that's conducive to providing care, don't be scared to think outside of the box and find something radically different that's way more exciting, that's far more lucrative, and that helps her to have the ability to still provide care.

There are so many options that are available. And the biggest thing that I've observed is that as people tend to age, they tend to lose their flexibility of thinking and flexibility of change. And yet I could point to dozens and dozens and dozens of scenarios, and we all know them.

The most famous is Colonel Sanders when he started Kentucky Fried Chicken when he was 65 years old. So the key is to really consider those same kind of fluffy things that I always talk about. What do you want? Redefine yourself. Reinvigorate your life. Get additional education. Figure out what would my dream be.

What new skills can I learn? And transform your life. And I haven't been 65 years old, so I don't know what it's like to be 65, but I've seen enough people who have been there and watched them and just seen how dramatically they changed their lifespan and changed their situation as time goes on.

So I hope that you can spend some time with your mom really just talking about goal setting and figuring out what's going to really serve the family well. And I hope that you guys, with a little bit of this information, can develop a plan that is going to really help you to come through this in a really positive way, and it can be a huge, huge benefit for you.

I think that's it for today. And I didn't expect this show to go this way. If you've stuck with me through the end, again, even if just the one listener has listened, then consider this a personal conversation and my best effort to give you some thoughts that I hope will steer you in the right direction.

And I'm thrilled to be able to do that. That's the advantage of podcasting, right? I often have gotten frustrated listening to financial radio and listening to someone give a four-minute answer to a question. And I know that you can't give a four-minute answer. And even I've spent, at this point, 59 minutes answering your question.

And I think I've just given you some things to think about because I don't have an answer. And there is no answer except search it out and work on it. And I hope you can find a local advisor, someone who knows your situation. And I would encourage you, reach out to a local advisor, because reach out to somebody that is competent in this area.

Search for somebody. What I would do is I would look for somebody who is an elder law attorney and talk with them. Start with the library. Let me rephrase. Start with the library. In every local library, there's going to be some really good resources on this in the public affairs section.

And there's going to be some good books about it, and it will talk about your state's systems. Talk to every person that you're in contact with. So when you're at the hospital, ask them, "Do you know of anything? Do you know of anything? And do you know of any programs that are available?" And you'll find out about a lot that way.

Try to find maybe a local financial planner. Try to find a local person who specializes in long-term care planning. And so whether this is someone with a CLTC designation, they have a listing on their website. The Corporation for Long-Term Care can do that, and that will be a lot of insurance people, a lot of investment people.

I think some elder law attorneys, the man who founded that was an attorney, and he's done a great job really trying to promote long-term care planning. Consider, again, reaching out to somebody in the local community, just asking people for help. And I know for me--I know that you may be short on money.

I know for me I always try--I've always wanted to help people as much as I can and at least point people in the right direction, so I would be happy to have a phone call with you. Just call a local advisor that you can find and just say, "Do you know of anyone that specializes in this that might be able to help us?" And even if you need to pay for an hour of somebody's time, that will be tremendously helpful to you.

This is one of those situations where I can't give you an answer without knowing the whole situation, but yet I'm too far away to ever be able to know the whole situation. So I think that's it for today. That's my Friday show. I want to leave--I'm going to take just a moment and hopefully to kind of send us out on a good note-- well, not a good note.

This is really--this is why I have such a passion for financial planning, because you can hear even in this is that I wish somehow-- my dream has been over the last years of doing financial planning, my dream has been to help families do better planning sooner so that their later situations are much more joyful.

And so this is not a depressing thing, even though it's just really challenging. I feel--I wish I could convey a better answer. I wish I had a solution. I wish I had a magic bullet, but I don't have one. I don't have an answer that's going to do better than that.

But I didn't mean to imply that this was depressing. It's just a different type of show than my normal, "Hey, let's go get it" type of thing. I really love doing this, and I really feel passionately about that. So I've got a bunch of other articles. I think maybe Monday I will make this the article show of some articles I've collected this week that I wanted to talk through of some interesting ideas.

Jason, I will save your question for next week about what do you do about a junkie 401(k), and I could talk for an hour about that, but I will not do that today. So I apologize. I had told you I would put it on today, but I've just spent too much time on this already.

I hope you've enjoyed this, and I hope that this weekend you are able to really consider some of the information that I've shared this week and really make some progress towards your goals. Remember, you have to actually do something with it. It's good to learn, but now take it and create it.

If you haven't created your family statement of financial condition, go do it. Create the balance sheet for yourself and figure out what it says, and take a look at your own situation. And I thank you for listening. This has been really fun for me. I have really enjoyed this week.

Thank you for those of you who have continued to leave iTunes reviews. I have awesome news to report. I think if my answer is checked, we are in the new and noteworthy section for the investing section of iTunes. So thank you. That is one goal that I was really hoping would help to get the show some more attention, and I'm so thrilled that we're there.

The next, I would love it if you would continue helping us out with those ratings and reviews and subscribing. And I would love to get into the new and noteworthy section for business. I'm not changing anything I'm doing based upon that, but it is nice. It's really encouraging just to be able to think of how many--to be able to help more people.

It's really encouraging to have that as a possibility. And so thank you for those of you who have left some iTunes reviews. We have three new ones. Left Bite says, "Not the usual financial fodder. Joshua dives deep into interesting topics. Not the typical financial fodder we usually hear." He gets me thinking.

And also, "I was glad to hear a mention of finances with special needs kids in mind. I plan to do several shows on that and cover special needs planning in depth. It's very specialized and yet incredibly important, and there's some really great techniques that can be implemented." So I will do that.

It's not going to be for a little bit, but I will do that. Thank you for the review. Stay tuned and sign up for the e-mail newsletter where you'll get the show notes every day, so that way you can see when those shows come out. Hands down my favorite podcast.

Thank you, Quinn. And great information, but I love this game. Thank you for those five-star reviews. I really, really appreciate it. Remember, failure is an event. It's not a person. Yesterday really did end last night. Today is the first day of the rest of your life. This weekend is the first weekend of the rest of your life.

Go out and make it count. Spend time with people you love. Do work that matters. Don't let your finances get in the way of that. Rather, shape your finances so you can do that constantly. Have a great weekend, everybody. I appreciate you listening. Cheers. The holidays start here at Ralph's with a variety of options to celebrate traditions old and new.

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