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Cash Flow Concerns

The smallest deed is better than the grandest intention. When we are thrown into a situation, without some preparation, we may overreact and overreach. Is there anything in

life that doesn’t work better with a little preparation? When it comes to financial matters, that is certainly true. An extended care event will impact your cash flow unless you are otherwise prepared. You need cash flow for daily living expenses, you need cash flow for family/friend events and vacations, and you need cash flow for saving, investing, and financing activities. In our story, members of the Jones family are quickly seeing the value of financial preparation for extended or long-term care needs. Fortunately, members of the Jones family are in their working years. Some of them take advantage of a saving plan, called a Health Saving Account (HSA). HSAs are a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. It’s part of the Jones family preparation since they can use money from their HSA tax-free to pay long-term-care insurance premiums, with the maximum annual tax-free amount based on their age. Like most financial instruments, they need to understand all the requirements so their Care Planning Team will look into the pros and cons.

-Excerpt from "How Not to Tear Your Family Apart"

“Even with a good financial plan in place,

I guess someone who doesn’t plan for possible extended or

long-term care costs may be obligated to withdraw savings,

cash in stocks, or liquidate assets regardless of good

or bad market timing. I wonder what our tax advisor

would say.”

Jackson, who uses the same CPA as Doug, remarks,

“Nothing that I would want to hear!”

Having your savings and accumulated assets blow up probably

wouldn’t make for a pretty tax picture. It leaves you vulnerable and

dependent on family and friends, or government, state, and/or community

services. Expecting help from outside resources comes with

emotional complications for both the giver and the receiver. It can

mean that someone else or an entity may control your care. That’s an

unsettling prospect.

Looking into funding vehicles early in your career while there

is ample time to accumulate funds is smart. One way to contribute

funds to retirement income is with a Health Savings Account (HSA).

An HSA is specifically designed to help pay for medical care costs and,

under certain circumstances, long-term care insurance premiums.

According to their personal summary, Jodi and Jackson both have

HSA accounts.


Paying for extended or long-term care expenses is an income problem

that can have serious asset, investment, and personal preference


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