Business Innovators Radio - Interview with Ron Roberts Founder and CEO of Roberts Retirement Group Discussing Health Care Planning for Retirement

Episode Date: December 6, 2024

Ron was born in Burbank California and grew up in the Mojave Desert. Being the first of six children born to deaf parents, he learned responsibility at an early age. His commitment to family and faith is unwavering. It’s the essence of who he is and the foundation of his business success. Living for a higher purpose and caring for others has always been Ron’s focus.After high school, he joined the United States Coast Guard where he learned about hard work, discipline, and duty. He enjoyed serving his country and helping to keep people safe. He grew in experience through training, education, and travel. He developed a love for the sea and enjoys boating and sailing with friends and family.After completing his time with the Coast Guard, Ron served on a mission for the deaf in Chicago for his church. While there, he formed the first deaf scout troop in Chicago for the Boy Scouts of America. Returning from Chicago, Ron attended college in Stockton, California where he met his wife, Julie. They were married in the spring of 1984. In 1991, Ron and Julie moved to Amador County where they enjoyed raising their four daughters in a close knit community. Ron’s hobbies include reading, boating, sports, and traveling with his family. Ron also volunteered at a private school where he taught history and American Sign Language. Family, faith, and community are the most important things that define Ron.Ron’s chosen vocation as a Retirement Planning Professional allows him to use his experience, his gifts, and his love for family to help people in a very special way. Ron has been in the retirement planning industry since 1990. Founded in 2002, Roberts Retirement has grown over the years to serve families in northern California and around the country.Ron has served as President of the California Estate Planning Counsel and continues to mentor other retirement planning professionals all across the United States. He is constantly educating himself on the most up-to-date investment strategies and changes in the financial industry. Ron is recognized as a leader in the industry, is a sought-after speaker, and has been featured in Senior Market Advisor MagazineLearn more: https://www.robertsretirement.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-ron-roberts-founder-and-ceo-of-roberts-retirement-group-discussing-health-care-planning-for-retirement

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with as Ron Roberts, who's the founder and CEO of Roberts Retirement Group, and we'll be talking about healthcare planning for retirement. Ron, welcome back to the program. Well, thank you, Mike. Glad to be here. Hey, so I know that this is such a huge topic because the topic of health care and affordable

health care and ideas and plans and costs and changes, just it seems like every time you turn around, there's some new thing to keep in mind. Where do you begin with your clients when you're helping them understand health care planning? Yeah, so many of the clients I, I've been working with, they're over age 65. We have clients are younger than 65, but the magic number of 65 is they're on Medicare. And they have Medicare, they may have a Medicare supplement. And their existing plan will cover doctor visits.

They'll cover hospitals, stays. And it may pay what they call, they call it skilled nursing. And to get that benefit, it's restrictive. They'll pay up to 100 days of skilled nursing care. To get that benefit, you have to be for submitted at the hospital, have at least a three-day stay, and they get discharged. If you still need nursing care, they'll provide that up to 100 days, either at your home or at a facility.

And hoping that that 100 days passes that you'll have a recovery and then you'll be back to being normal again. However, if your stay or your needs are past that 100 days, that's where people are going to be billed directly, and that's where the expenses can be very expensive. As an example, there's different levels of care, and of course what they define a need of care, long-term care, is they're called activities of daily living,

and there's six activities that we do normally every day. We eat, we dress, we bathe, we toilet, we countenance, we transfer, and hopefully we can do all these six activities every day for the rest of our wives. But if you cannot perform at least two of those six daily activities, then you need a caregiver. And a caregiver could be in-home, in-home care, a cost of in-home care. Again, different states,

are different. The price is different. Coming from California here, cost of care for home can be as much as $60,000 a year, which is about $5,000 a month. Then the other level of care is called, they call it skilled nursing care. And skilled nursing care can be between $150,000 to $180,000 a year. So you can see those are large expenses. And most people, they have what we call it the hope and pray method. Hope and pray doesn't happen. And if it does happen, then they address it. And that will cause distress.

We're going to get this kind of money to pay for this cost of care. And so what people end up doing is called a spend down. They start spending down their assets. the assets conclude their investments, their savings, their retirement accounts, and their equity of their home. And you hear the stories and it happens repeatedly. So there's people who want to do a plan to address that because it's a legitimate concern, a legitimate stress. And so there are different plans out there to address it. One would be buying a standalone long-term.

care insurance policy where it is it is medically underwritten so you have to be a decent health and and then once you get approved they there's a there's a there's a uh you have to pay a premium and it's a premium you constantly pay into every month every year uh for the balance of your life and and some people that that could be very expensive and that will go i don't know i could pay that kind of premium. And they're known over time, decrease those premiums because the cost goes up, and so they have to increase the premium costs. And statistically, I hear 40, I hear 60%, but they say 40 to 60 percent will never need care. And we have an expression. It's called live long and die quickly, which is actually a blessing.

but if you pay into a policy like this and you never make a claim, then the policy goes away. You can't pass that benefit to your spouse or to your family. That is one type of plan that is available out there. Another plan out there, they're called life insurance policies. They're called universal life or whole life. And they have a writer. And the writer is based on your,

death benefits and so say you have a $500,000 death benefit on your policy and you want to make a claim on it they will take the money out of your death benefits to pay for your cost of care again a policy like that could be funded by premiums again you're paying premiums or you can do you can reposition an asset from somewhere else and fund it as a single lump-s and it's fully funded. You'll have to pay one time. There's another one called annuities that have a long-term care writer to it. That, again, it pays when you want to trade it for long-term care,

you can take the value of your annuity, say it's worth $200,000. And to pay on your health, you can times it by twice or three times. So you can take a $200,000 initial investment, make it to a $400,000 or a $600,000. dollar long-term care benefit. So those are kind of more traditional ways to address how to pay for long-term care if you want to do some planning. Occasionally, I'll meet a client who has lots of assets and we do the numbers and we say, you know, you can fully fund it yourself.

You can fully fund long-term care out of your personal assets. And they go, you know, we figured that. And if they want to self-insure themselves, that's absolutely a way to do it, knowing that the cost would come out of their existing portfolio to pay for the cost. And those are all traditional, but about three years ago, they came out with a brand new concept. It's called Innovation. And it is not insurance, traditional insurance that you would pay into. They utilize your existing retirement accounts. you have an existing retirement account because it tends that most people's assets,

one of their larger assets is their retirement accounts, like a 401k and IRA account. And so you are able to have what they call benefits. They're called long-term care benefits. They actually call impaired health benefits. And so you have two types of value. The one value is your value. That's your call your accumulation value. That's the money. That's your retirement. That's your money. That's the one you're going to draw on.

Say you want to draw money out monthly for your income. Then you have a separate value called retirement benefit value, which is growing as well. And it's growing a little bit faster than your account because whatever interest you're accumulating on your own accumulation, they double the growth on the retirement benefit value. But when you trigger it, what the value is at the year you trigger it. And there's no waiting period. But the money is there. And again, they need a sign form by your doctor, says my patient cannot do to the six daily activities. And the deposit goes directly into your personal checking account. And when the money is received, you can use the money any way you wish, you can hire anyone to be a caregiver, it can include a spouse, a son, a daughter,

grandson, granddaughter, a family member, a friend, or you hire someone, but you control the money. You control how many hours you want that caregiver to be at your home. And if you have any money left over, you keep the money, and it pays out for seven years. And they say the average stay of care in America is three. say you use three years of it and passed, there's still four remaining years. Those four remaining years will be paid directly to your spouse or your family, your living trust, however you want it to be given to as a beneficiary. And again, if we use, if we do the conversion, we talk about Roth conversions, that's one

of the objectives, then anything that comes out of this account, your retirement benefits would be 100% tax-free because it's a raw account that's coming out of. So that's the new innovation, the new generation of covering costs. There's not a premium for it. It's just built in your existing account, your existing retirement account. It's been very well received. People love it. There's no medical underwriting.

The only thing they ask is can you do all six daily activities at the moment? And the answer is yes. you have the coverage. So that gives you kind of a explanation how we address long-term care planning. Yeah, you know, you brought up a statistic that if you had a standalone long-term care policy statistically 30 or 40 percent of those people never have need to use it. So then those premiums you've paid just are gone. You know, it's not like an asset. Whereas some of these other opportunities that you mentioned either wouldn't have a premium associated or Like with the life insurance or annuity side, it's tied to your account to where if you needed it, it's there.

If you didn't need it, your funds are still there growing. And so that's kind of is that new wave of opportunity there that would set people's mind at ease. You're exactly correct, Mike. Absolutely. Now, another statistic that I've heard, or maybe let me ask you, what is the specific statistic? Like, you know, some people might just have that, you know, hope and prayer idea of like, I hope they don't ever need it. But what percentage of people will typically need to have some form of long-term care?

Yes. So, again, these activities that daily live on, that's the marker there, that decide if you need care or not need care. So when it comes to a point where you cannot perform two. of the six daily activities that specifies that you need a caregiver to assist you. So that caregiver could be home care, it could be assisted living, it could be a skilled nursing care. But that's what basically determines. And when I do the, when I do the interviewing process, these are again the questions I ask in our interview

do is their family history. Yeah. Their family history, yeah, my parents went through this. My uncle aunt went through this. Or they have an older sibling. Yeah, my older sibling went through this. It's real. It's real to them, knowing that, yeah, they're paying for it.

And this is how they're paid for it. And when they hear about their options to address it, then we go there and do the plan. Then you have others who'll say, well, we really don't have those issues in my family. We tend to die. You know, we get terminal and we die. And so maybe them it's not really real because the family hasn't experienced it yet. But that's one of the factors I address because it's their motivation.

They're motivated because of family history. they're going to go, yeah, I got to do a plan. And if you plan for it, then you know you've got that peace of mind in place. And then if you didn't need it, good. But if you don't plan for it and needed it, that's when the trouble comes. Right. Exactly. So talk a little bit about when, you know, those daily activities and things that you mentioned.

And now we know that someone needs some form of long-term care. A couple of the things that would come into my mind is can there, can you like, have long-term care in your own home or do you have to go to a facility and do you have your choice of your provider or is it some list that I have to follow that the long-term care provider says you can only go to these places and I didn't really have any choice. How does some of those options work? I think in many of those instances is the doctor. The doctor will know what level of care they'll need. So the doctor says, yes, my patient, especially we're going to make a, we're going to make a claim, we're going to trigger a benefit. We have to have a signed document by

the doctor that my patient can outperform at least two of these six daily activities. So if the doctor is comfortable, them having home health care, that's where most people would like to be is in a familiar surrounding. They're comfortable at home, and they can have a caregiver come and do the housekeeping, the cooking, the medication, taking to the doctors, help them assist them to clothe them, or bathe them, those type of activities. Most people would prefer to be home. A perfect example was my wife's father. He could not perform three of the six-day-day activities.

So we talked, asked the doctor, can we have him home for home care? And he said, no, he needed. 24-hour care. So we had to take him to a skilled nursing facility, which offered a 24-hour care. And we found a facility. He was there for about a year.

But this was about nine years ago, and they charged the family $12,000 a month. And he lived about a year, and then he passed. But the family put out $144,000.

But again, that was $9,000. years ago. Inflation today, it's much more. And the average stay is three years. So fortunately, my wife's father lived about a year and passed. But if he was there for three years, you just take this $144,000 per year times it by three years. You can see where that can be stressful. For the family. Yes. It's the kind of thing that, that when we think about that retirement bucket, and we got our money in the bucket, and then there's some holes that are chunked into there. That could come from taxes or inflation or expenses,

but this long-term care expense can be devastating. And I think these are some just really, really helpful thoughts to keep in mind. Since we're talking about healthcare planning for retirement, another aspect of that would be like Medicare. What are some of the key things people need to keep in mind? I know this is a broad topic that could take days to get to the bottom of, but what are some of the key things you're educating your clients on? Definitely want a supplement. I'm not a supplement expert.

I know they're experts out there. I do refer clients to these experts, but they want to have adequate coverage, adequate coverage, because Medicare will only pay a percentage, I believe it's 80% of the bills, the expenses. So the supplement will help pay the difference. And also you want to consider maybe prescription. You may want to consider dental as an added benefit to your Medicare,

through your Medicare supplement. So those things are very important to be sure that you have adequate coverage. If you don't have adequate coverage, you'll be stuck with some bills, expenses, you know, doctor bills and hospital bills. So you want to be sure you have adequate coverage to a supplement plan that will engage with your existing Medicare. And knowing that Medicare and your supplement plan, it's restricted how much they will take care of long-term care, which is only 100 days.

So you just got to know how that works. So that's brought up to the, you know, in our conversation as we're having, you know, questions asked and answers given. And there's some expertise that is beyond my scope that I refer out. And but we have a team. We have a team of people that are there for the client. to take care of all aspects of retirement planning. And that's a key point is each one of these aspects we've been talking about or like a domino

that if it topples over it has a far-reaching effect, not one plan is right for every single person every single time. And you need that team. And if Ron is knowledgeable about everything, he can bring in the right person at the right time to make those right recommendations. and I'm sure you work with the client's team as well. So it's the kind of thing where let's just all get on the same page, make sure that we're making the right decisions.

So let's wrap up this conversational health care planning. What are some final thoughts that you would have? And then how can people reach out and connect with you to learn more? Yeah, I would encourage as far as your retirement plan is have a health care plan in place. And when that plan is in place, then you'll give me. you some reinsurance and it will give you, you'll be totally stress-free about this aspect. It's something that you hope it never happens, but if it did happen, you're glad you have a plan in place.

A lot of folks don't have a plan. They have the hope and pray method, and they're gambling, their future based on a hope and play plan. So I encourage you look at, and you can reach us at our, you know, you know, you know, email address is Roberts, R-O-B-E-R-E-R-T-S at Roberts, R-O-B-R-T-S retirement.com. Our website is Robertsretirement.com. And you can reach us by phone at 209-223-7870. Excellent. Well, Ron, thank you so much for coming back on.

It's been a real pleasure talking with you. Thank you, Mike. It's a pleasure as well. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www.com.