Business Innovators Radio - Interview With Stephen Ng, CLU, ChFC, CEP Founder of Stephen Ng Financial Group – Utilizing Long-Term Care to Leverage Retirement Wealth

Episode Date: May 13, 2024

Stephen Ng, whom you may have seen in NBC, Forbes, Wall Street Journal, U.S. News and World Report, New York Daily News, and others. He has also been interviewed by Fox TV and Christian Television Network. Stephen is the Author of “10 Financial Mistakes You Should Avoid” which has been a wonderful resource for many of his clients. All of the proceeds from the book sales go to benefit World Vision International. Stephen is also the Founder and President of Stephen Ng Financial Group.Stephen is married, has 3 children and resides in New Jersey and Florida. Stephen is a warm and passionate communicator who loves to share his financial wisdom and insights. He served as a Deacon at Trust In God Baptist Church in New York City and was the Chairman of the Board from 2008 to 2016. Currently, he serves as a trustee for Doxa Church in New York City. Stephen attends Bell Shoals Church, in Brandon, Florida. He loves to travel and frequently speaks internationally during mission trips with his churchLearn More: https://www.stephenngfg.com/The views expressed are not necessarily the opinion of Stephen NG, and should not be construed directly or indirectly, as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice.Securities and investment advisory services offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-stephen-ng-clu-chfc-cep-founder-of-stephen-ng-financial-group-understanding-long-term-care-to-leverage-retirement-wealth

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 us, Stephen Ng, who's the founder of Stephen Eng Financial Group, and we'll be talking about long-term care to leverage retirement. wealth. Stephen, welcome back to the program. Yep, no plan. Mike. Always good to have you interviewing me. Yes, this is a really important topic. And I feel like a lot of times people do not make the correlation to leverage long-term care to leverage retirement wealth.

Well, there's a connection there. I want to dive right into that and understand what that is because statistically, I think that people would be surprised at how many times long-term care really is. is needed. So how do you work with your clients to help them understand these long-term care options? Yeah, I think most people do not really understand the risk of living too long. You know, 50 years ago, if you have a stroke or heart attack, you're not around. Today, you are around, but you may not be able to take care of yourself, which is basically doing two out of the six ADLs, which is the activities of daily living. According to you, the survey, in particular, the National Long-Term Care Clearing House, 70% of individuals, over 65,

will require at least some type of long-term care. And of all Americans, age 65 and older, one in five will require long-term care services for five or more years. So that is one serious risk, which most people may not be aware of. So, you know, that is a huge thing because I feel like a lot of times people go, oh, that won't matter, that won't happen to me. And, and then, then it does. Or that won't happen to anyone in my family, but then it does. And I think that there's a distinction, too, in the types of long-term care. So you might need long-term care with full services, but you might need just some long-term

care with some assisted care. So there's some different things that people should consider because that statistic of 70%, that's pretty staggering. Yep. that is high. And, you know, basically long-term care, there are basically two major cares. One is, you know, whether you're going to end up in a nursing home or secondly, it is in-home care. The care are being, you know, taken, being provided at home. You know, so basically those are the two main categories, might. And I think that a lot of times people these days, you know, they get so resistant to, you know, don't put me in a home or don't put me, you know, I'll be fine on my own.

but there's that, you know, transition of you really need some more care. So you need to be where that care is. But then for the people that want to be kind of taking care of in their home, one question that I'm sure people have is, can I pick my own care provider? So in the realm of long-term care, is that an option where you can say, look, my nephew is a licensed nurse or whatever? Can you have your choice in who is providing care for you in your home? Yeah, as long as the person is obviously certified license, no problem. You can have the, as long as they have their license to take care of you, but you cannot

just have anyone just to take care of you because most of the time when you need long-term care, you really need someone who is well-trained to take care of you, obviously. Yeah, but at least it's nice to know that you do have some choice. So that's really powerful. And I know also that long-term care can be pricey. So when you're working with your clients, what are some of the strategies that you recommend to help them lower and mitigate those costs of long-term care? Yeah. I think most people are not aware that there are actually five main strategies that we, you know, educate our clients and prospective clients via webinar and trial seminars and all that.

Mainly, firstly, the first one is using a fixed annuity, you know, to leverage that particular risk. Number two, it's life insurance for a long-term care rider. Number three, which is being less used, which is a pure long-term care rider. This is used a lot, probably 15 or 20 years ago, less used right now. And number four, you know, to meet with one of my elder care attorneys to draft out an irrevocable trust. And finally, if you are wealthy enough, you just basically self-insured yourself. So those are the five main strategies that we use. to mitigate the risk of long-term care.

You know, I find that really interesting because I think that if someone were to be asked, what is your first impression when you hear about long-term care insurance? They would say it's expensive, yeah. And we know that it can be, but with some of these five strategies, maybe there's some ways to structure it where it's much more affordable. But I heard this one time, and I want to get to your thoughts on this too. you know, like if you drive your car and you have your car insurance and if you don't have an accident or make any claim against your car insurance for one whole year, you cannot go back to your carrier and say, hey, I never used my insurance. So send me my premiums back. It just doesn't work that way. But with some of those like the pure long term care standalone policy, you're paying a premium and it will protect you if you need long term care. But if you didn't need it, those premiums are just paid to the insurance company. whereas some of those other options, we don't need to get into details or into the weeds,

but I feel like it's nice for people to realize some of these other options with riders. If you need it, it's there. But if you don't need it, it's providing you some of these other benefits that are helping to grow your retirement. Yep. You're absolutely right, Mike. Example, you know, the strategies on the fixed annuity and the one with the life insurance with the long-term care rider. I mean, if you go to sleep and you just, you know, wake up tomorrow, basically, you do not need long-term care, right? You basically have a heart attack in your gun.

If you use any of those, then, hey, whatever that is left, you know, not used, whether it's the debt benefit or is the account value or the fixed annuity, will just pass on 100% to the beneficiaries. So you're not wasting your premium dollars or whatever, unlike a pure long-term care policy. So you're absolutely right, might. And I think there's a time in place for any of those, but which one is right for you. Well, get with someone that can explain and understand what you need. So let's kind of focus on what role does long-term care play in protecting retirement wealth? Because I think that's one of the things that you're so focused on is growing and protecting and leveraging.

So how should people look at long-term care as far as incorporating it into their retirement and financial plan? Yeah, good question, Mike. Basically, long-term care insurance strategies are designed to help our clients to protect against the depletion of retirement wealth. This is one major risk that would deplete one's retirement assets. Retirees should definitely leverage some of their assets when they are still cognitive. They're still able to make a decision and relatively healthy to do so. This is one area where time is of the essence. The earlier you plan, the better.

And the type of strategies you use will largely depend on one's investment assets, net worth, health history, and family history, obviously. So again, no one size fits all, but there's definitely a way to incorporate that in because like what you just said, there's a major risk that could deplete retirement assets. Let's kind of talk a little bit about that. I know we're not going to give guarantees or exact figures that are. that are guaranteed, but what are some insights on the potential costs? Because we know it's expensive, but how expensive really is it? Because you just said that they can deplete retirement savings, and we want to mitigate that as much as possible. Yep. Good question, Mike. The average cost of long-term care, either in-home care or nursing home, runs nationwide around $100,000 yearly

and expected to increase by 8% each year. Example, a private room cost around $100,000. a year, you know, in a nursing home, is projected to run around 142,000 by 2030. So that is some big number that would definitely deplete whatever assets that you have. So exactly. And if you're not ready for that, it depletes it. And then now you have no, those funds are gone. You know, one thing, too, you would mention the types of long-term care. And I think that we don't need to get into, again, descriptions and detail. But I think that there's something that a lot of times people don't realize like, wow, those numbers sound like a lot, 100,000 and 142,000. Well, if there are different needs in your long-term care, it could even be more expensive than that. For example,

I know that if you have dementia needs, that's going to be more expensive than just traditional long-term care, right? Oh, yeah, definitely might. I mean, you know, in terms of the numbers I gave you, remember, that is an average cost, right? Average. could be a little bit lower than 100,000, depending on where you are. And average can be more than that, depending on what kind of, you know, cognitive disability, you know, dementia, assignments, and all that, which is going to be much, much more, obviously. Yeah, that's a really good point. And again, more and more statistically, more and more people are having those kinds of needs.

So I think that it's like if you plan for the worst and the worst does not happen, you feel good that at least you plan for it and you were prepared. So what are some of the ways of incorporating these kind of long-term care considerations giving your client's peace of mind? I feel like if I could draw a circle around bolded piece of mind, that's probably one of the biggest things that people just want is peace of mind to know that they're prepared for retirement. So how does making these plans and considerations for long-term care play into providing

that? Yeah. So firstly, I think when you have long-term care protection, a retiree will definitely slow down the depletion of their retirement assets. As I mentioned earlier, this is one health care cost and risk that will very quickly depletes one's asset. Secondly, for the goal of legacy transfer for the beneficiaries, the retirees will be able to pass on much more assets to the beneficiary. And finally, I think it is, you know, that peace of mind in retirement, knowing that you're not going to be a burden to your loved ones, right? And you can have a smarter control of your assets to live out your golden years. And no one wants to burden you your loved ones and all that. And I tell people all the time, you know what? Make decisions. Take actions. Or you're able to do so. Unfortunately, some of the clients and, The people that we talk to, might, by the time they come to us, it's way too late. They may not be in the right frame of mind to make a decision, and it's way too late. So I tell people, this is one area where time is of the essence. Make a decision while you have the mental capacity to do so.

It's just so important. You know, I think that you said something that really is important that I want to make sure people are picking up on burden to the loved ones. there's two aspects of that. There's the one aspect of here's the loved ones that are just living their life and then here here is mom or dad that needs this help. And now the kids have to deal with this. And they don't know the process. They don't know how to pick homes and long term carriers and all of these things.

That's a burden. But also the worry and anxiety that the person feels like I now need long term care. I don't want to be a burden to my loved ones. So making these plans ahead of time sets. that it's kind of like that nice blue ocean feel. Like here's the nice calm waters and we know it's smooth sailing ahead and it makes you feel good that you prepared and it takes away that burden to the loved one. So have you had times where you've had clients that, you know, put this in place and just kind of communicated that to you that it just feels so good that

we've got this taken care of? Oh yeah, all the time. I mean, you know, I tell all my clients all the time that, you know, no one planned to fail, but many people fail to plan. I can give you examples and examples, you know, over my 32 years in practice, you know, of clients that took our advice. In fact, one of my clients, before he passed away, he suffered, you know, dementia Alzheimer's. Thank God we had long-term care strategies put in place for almost maybe 10 years ago. thank God they did that. We were able to take up a part of their investment and we leveraged the risk of long-term care and now the husband actually passed away two years ago and now the wife, you know, the surviving wife is not doing that well, but thank God she had the long-term care

and the kids both are very busy, successful people. They do not need to worry about it because, hey, we've got the long-term care plan to take care of that. And I thank God that they made that decision 10 years earlier on and not when right now, which there are in no matter capacity to make any decision right now. You know, I love that quote, no one plans to fail because who would? Who's going to write down on a piece of paper? I'm planning to fail and here's how I'm going to fail. They just failed to plan.

They just fail to put a plan into place and like you said until it's too late. And unfortunately, when it's too late, it actually is just too late. It's pass or fail, so I think that's a huge thing. The other thing that I feel like a lot of people, you know, it resonates is tell me where we might have overlooked something or tell me where I'm missing out. And you mentioned it, you know, no one plans to fail, but they failed to plan. But I want to tie back to those five strategies that you mentioned. I think that a lot of times people assume that there's one type of long-term care and it's this type of policy and I go into this type of facility. and there's a whole world that is now opened up like you've already described.

There's five different types of long-term care type of tools that can be used. And then there's in-home, there's facilities. So I think that that makes people realize that, okay, I don't know what the right choice for me is, but it really opens up a whole new world to help them realize that I'm going to make sure that I'm not overlooking and missing out on anything. Yeah, you're right, mate. definitely on point on that comments. We realize that a lot of people have no idea that there are five major strategies out there. In fact, we, in part of our educational process, we run a lot of seminars, webinars,

to educate our clients. And we have actually a webinar just on long-term care risk and how to leverage your wealth, take care of long-term care. And the good thing is as an independent financial advice, and we are fiduciary, right? We cannot just recommend one strategy. And the problem is most people think there's only one strategy, which is a mistake. They are actually five. So my advice to most people is that, hey, take the time to understand that there are five major strategies, you know, speak to someone that is independent so that they can be objective in giving advice. That would be my

advice in the area of long-term care. You know, we touched on earlier, Stephen, the role of a fiduciary and why that is so critical. The other thing you just brought up is independent. And I feel like that is something that sometimes people don't realize, again, until it's too late. But talk a little bit about what flexibility that gives you, because if I'm understanding correctly, if you work for XYZ company, all you can offer is their products. And you might find yourself kind of going, wow, I wish.

I could offer something like this, this, this, and this, because this client really needs it, but this company that I'm with doesn't offer it. Whereas an independent, you've got unbelievable flexibility to offer what benefits the clients most. Correct. Yeah. Interestingly, it brings back memories when I first started in this business in 1992. I started in this business by going to work for Prudential. And I'm very thankful, obviously for Prudential.

I got all my licenses and all my basic training. with prudential. By 1995, I realized that that's not the place I'm going to be because one day I spoke to my sales manager and I say, Mr. Manager, is it all right if I talk about a non-prudential strategies to one of my clients? And my sales manager literally look at me and say, Stephen, if you ever mentioned a non-prudential product, you will be fired. So there was a aha-mobile. moment for me. And I said, if I'm going to be a financial advisor, God willing for the next 30, 40 years, I just cannot just keep talking about prudential. There are other stuff out there. So that was a really important decision that I made in 1995. I became independent, meaning I can have all kinds of

strategies, all kinds of products, be long-term care investment strategies, IRAA rescue strategies and all that by being independent and because I'm independent, I can be objective in giving my size to my clients. And that is the best way to go about it in my opinion. I love it. Well, as always, it's so great to listen to you, teach and educate. And this has been eye-opening for using long-term care to leverage retirement wealth. If someone is listening to this and wanting to learn more and then also reach out and connect with you, what is the best way that they can do that, Stephen?

Yep. But I have to give one final advice on this piece, which is really important. And my advice to clients is always remember, you want to plan your life as though you are going to live for a long time. But live each day of your life as though it is your last day. I think that is a good reminder. If you have any questions, you can either call us at our number, 973-218-9600. Or you can go to our website, Stephen, spelled with a piece, P-H-S-T-E-P-H-E-N-G-G-D-G-com.

And we will love to help you. Excellent. Well, we'll also have the link to your website in the show notes. And thank you so much for coming back on. It's been a real pleasure talking with you again. No problem. Thank you, Mike. God bless you.

The views expressed are not necessarily the opinion of Stephen Eng and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned here in. Investing is subject to risks, including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual

professional advice. Securities and investment advisory services offered through Osaic Wealth, Inc. member of FINRA and SIPC. Ozaic wealth is separately owned and other entities and or marketing names, products or services referenced here are independent of Ozaic wealth. 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.