The Story of Ethel and Sue

Ethel and Sue had been friends for years. When Ethel’s husband got diagnosed with cancer at a young age and was out of work for more than a year during treatment, they realized how important it was to plan for the unknown. Ethel and her husband had a serious talk and decided they should plan ahead now, while she was healthy, just in case anything happened to her.

Not only did Ethel and her husband want to have money left over at the end of their life to leave a legacy for their 3 children, they wanted to make sure their children were not going to be saddled with any medical bills or paying for a nursing home for them. After speaking with their trusted financial professional, John, to see how they could plan for all of this – leaving a legacy, covering unexpected medical expenses, and planning for long term care in case it was needed in the future, they learned about Anderson’s Private Vault Retirement Plan.

John explained that Ethel could invest $10,000 per year for 15 years into the plan. The plan would have a death benefit that allowed her to provide a legacy to her children and cover any debt left behind. Her investments would build value within the plan, allowing her to take loans throughout the life of the policy which John said his clients often used for large personal purchases, other investments, like purchasing a rental property, or most often for supplemental retirement income. Lastly, her Private Vault Retirement Plan had an option on there that allowed her to accelerate the death benefit to pay for expenses related to terminal illness, chronic illness, or critical illness or injury – including paying for time in a nursing home.

Ethel was so excited about this plan that she immediately called Sue and told her about it. Sue did not see the need for a plan like this.

When they were both 69 Ethel and Sue, who had already outlived their husbands, could no longer care for themselves. They both elected to live in a private room at a nursing home in their home state of Washington at the rate of $7,698 per month. Sue had to use her savings to pay for her care and when she passed away 8 years later she had nearly depleted everything she worked her entire life to save.

Ethel was able to draw on her Private Vault Retirement Plan in the amount of $7,555 per year for 8 years until she passed away. Her out of pocket cost during that time was only $13,728 which she took from her savings. Because she was able to pay over $725,000 in nursing home costs from her Private Vault Retirement Plan, Ethel’s savings account and what was left in her 401k and IRA provided a substantial inheritance for her children and grandchildren, just as she had planned with John, her financial professional, and her husband years ago.

Statistics show 50% of the population will need long term care in the future. 25% will need care for more than 5 years. This time may come during retirement, or before, like Ethel’s husband after his cancer diagnosis. You can prepare by paying an exuberant amount for a “true” Long Term Care policy, which can only be used for long term care. You can plan to use your savings, should the need arise. Or you can set up a Private Vault Retirement Plan, which allows you the option to use it for a qualifying long term care need or, if that need does not arise, you can use it for anything you wish. When you don’t plan ahead for long term care needs you risk not only your own financial freedom but that of your children as well.

Anderson Financial Services’ advisors are licensed to set up the products and strategies they offer.

Anderson Financial Services, LLC and it’s representatives do not market investment securities though do have strategic alliances with companies that do so.

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