Welcome to the latest edition of our newsletter! As always, if you have questions or suggestions, please contact us.

September is Life Insurance Awareness Month…Here are some insurance basics you might find interesting. If it has been a while since your policies were reviewed, if you don’t know whether have enough life insurance, or if you have none, contact our office today for a no-obligation consultation. Congratulations to Jessica Walsworth, my Client Service Specialist, who recently passed her life, health, and accident insurance exams. Now both Jessica and I may assist you with insurance questions. My website includes a helpful calculator to determine your insurance needs: http://www.anitaritterfinancial.com/Library/Calculators/

Life Insurance Purchasing a life insurance policy is an investment many people evaluate during the estate planning process. In the event of one’s death, a life insurance policy is a safety net that ensures their loved one’s future financial obligations will be met, covering items such as funeral costs, outstanding debt, estate taxes and everyday living expenses. It can also help alleviate the extra childcare and other domestic expenses that can occur if a stay-at-home parent should pass away. There are two basic types of life insurance: term life insurance and permanent life insurance. The type of life insurance policy that best suits you will depend on your unique needs. Option #1: Term Life Insurance Just as its name implies, term life insurance covers you for a specific period of time, or term, that you choose. Since it offers a death benefit but no cash value, term life insurance is an inexpensive way to

protect your beneficiaries for a specified period of time. Term life insurance is best suited for:

People who have a temporary need for life insurance protection.

Individuals who need a large amount of insurance protection but have limited cash.

Those with specific business needs, such as additional coverage for a key employee.

At the option of the policyholder and without evidence of insurability, term life insurance can be renewed at the end of the term for a limited number of successive terms. It can also be converted or exchanged for a permanent insurance policy without evidence of insurability down the road. Once the term expires, coverage ceases and the policy has no further value. It’s important to note that rates generally increase along with the insured’s age. Option #2: Permanent Life Insurance Permanent life insurance is any form of life insurance other than term. Examples are whole life, universal life and variable life. These policies combine term life insurance with a long-term, tax-sheltered savings plan. Whole life is the most basic type of permanent life insurance. It provides coverage that lasts a lifetime and also builds up a cash value that you can borrow against, withdraw or use to pay future premiums. A life insurance policy with a cash value is ideal for: Those who have a lifetime need for insurance protection:

Individuals who prefer stable premiums over the life of the policy.

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September-October 2015

“ The advice and personal service I provide builds a long lasting, trusting, and confident relationship.”

~Anita Ritter

People who want a policy that allows them to build tax-deferred values.

Those who value the high degree of coverage the policy affords.

While rates for a whole life insurance policy remain stable over the life of the policy, premiums are initially more costly than those of term insurance policies. This article was written by Advicent Solutions, an entity unrelated to Anita Ritter Financial. The information contained in this article is not intended to be tax, investment, or legal advice, and it may not be relied on for the purpose of avoiding any tax penalties. Anita Ritter Financial does not provide tax or legal advice. You are encouraged to consult with your tax advisor or attorney regarding specific tax issues. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Anita Ritter Financial and Cambridge are not affiliated.

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Continuing Care Retirement Centers

Continuing care retirement communities, or CCRCs, are one of the most comprehensive options for senior living. They typically combine independent living, assisted living and nursing home care into a continuum, which seniors can move through as they age. Is a CCRC right for me? Since these communities offer a variety of care and tend to have many benefits for seniors, they generally require a substantial entry fee as well as a monthly maintenance fee. CCRCs are the most expensive senior living alternative available. Therefore, seniors who are paying for these services will likely want to enjoy them. For this reason, the majority of residents move in while they are still able to live independently, and then take advantage of the continuum of care as they age. CCRCs are also ideal for seniors who want to form a deep sense of community during retirement, as it allows them to be immersed in a welcoming environment with other people of the same age. CCRCs generally offer three levels of care: Independent living: Residents have individual residential units, often apartments, and services include some meals, housekeeping, social and recreational activities, and some transportation. Assisted living: Residents still live in small apartments, but have increased access to health care and additional support services such as increased transportation, cooking and housekeeping. Nursing home care: Residents will live in private or semi-private rooms in an area of the community with 24-hour skilled nursing or rehabilitative care, in addition to cooking, housekeeping and other support services.

Choosing a CCRC Choosing the retirement community that is right for you can be difficult, especially since each may offer a variety of amenities and fees. Shopping around can be overwhelming, so it’s important to consider what’s most important to you in a retirement community and how much you can afford. Otherwise, you could be tempted to choose the flashiest community possible with the most amenities, even if it is outside of your budget. It is helpful to consider the following when choosing a CCRC:

What range of social/leisure activities do they offer?

Do they provide transportation for medical appointments and/or local events?

Do they have a resident council that I can join?

What is the fee and contract structure?

What is included in the monthly fee? What’s excluded?

Is this choice financially feasible?

Does this CCRC have immediate availability?

Do they allow pets?

Do they allow overnight visitors?

What is the schedule for housekeeping services?

Is there covered, convenient parking?

Do residents seem satisfied with the quality of their health care and the other services they receive?

Unlike a nursing home or assisted living facility, the largest considerations, especially in the initial years after moving, will be social. As you do not yet need extensive health care, you will want to give more weight to some of the “intangible” aspects of the community, such as the atmosphere and the kind of resident it attracts.

While seniors moving into a nursing home or assisted living facility may not have the luxury of giving considerable weight to these factors, CCRCs offer an enlarged social aspect and this should be considered when choosing one. Many communities offer a free-of-charge overnight stay for future residents to experience the community

and the area before deciding to move in.

Paying for a CCRC The fee structure of continuing care retirement communities will vary from community to community. There are three main contracts used to set up the fee structure for CCRCs: Life care or Type A contract: This type of contract requires a substantial entry fee, but will not increase (continued on page 3)

monthly fees as a resident moves from independent living to assisted living or nursing home care. Essentially, you will not pay more month-to-month, even as your level of care increases. Modified or Type B contract: Similar to a life care contract, modified contracts charge a substantial entry fee. However, with a modified contract, CCRCs only agree to not increase the monthly fees with the level of care for a specified period after the senior moves out of independent living. After this period, seniors will pay an increased rate depending on their level of care. Fee-for-service or Type C contract: This type of contract has the lowest entrance fee, but the fees for housing and residential amenities increase directly with the level of care provided. Normally, these fees are based on the typical cost of an assisted living facility or nursing home in the area. CCRCs also usually differ in their refund policies. Some offer contracts that refund a specific percentage of the entrance fee, regardless of the length of residency. This refund is given to either the resident or the resident’s estate, depending on if the contract is terminated by choice or due to the resident’s death. Residents can receive up to 90 percent of the entrance fee back, according to these contracts, although usually the entrance fee will increase as the percentage of refund increases. Other CCRCs offer a refund only for a specified period, after which no funds will be returned when the property is vacated. With this type of a refund, the entrance fee is usually much lower. Average fees for CCRCs vary largely depending on the area and type of community, but entrance fees generally start around $100,000 and can increase up to as much as $1 million. Monthly fees can range from $1,000 to $5,000 or even more, depending on the level of care. The large expenses are due to the level of security that the communities offer seniors in knowing that they will not have to move to a new home, even if their health worsens. Resident payment for CCRCs is almost entirely privately funded, as Medicare, Medicaid and health insurance generally do not cover the high fees. Medicare may cover the cost of some CCRC services, such as physician visits or short-term nursing care. However, as CCRCs are a long-term service and Medicare does not generally cover long-term nursing care, a large majority of care is not covered. Because of the high fees, very few people who stay at them qualify for Medicaid. Long-term care insurance is another option to help cover some of the costs of CCRCs. You should check with your insurance company to see if your policy will cover some of your CCRC costs, and, if so, what services it will cover.

Making the move Once you have considered the cost and chosen a continuing care retirement community, you should expect to go through both a physical and mental evaluation. As most seniors enter CCRCs in the independent living stage, they usually must pass examinations to demonstrate physical and mental competency so they can live on their own. CCRCs rarely accept applicants who are already severely debilitated in one way or another, such as from a stroke or Alzheimer’s disease. This is largely due to financial concerns—sometimes CCRCs will accept residents with these conditions, but will require them to pay extra for nursing care that arises from pre-existing health conditions. You should be prepared to undergo these types of evaluations before moving in, and provide the CCRC with a medical history and emergency contact information. Above all, you should feel comfortable and respected in your new home. You should review the contract that you sign carefully before moving in, and if you feel you are not receiving the care you deserve, contact a legal or family representative. This article was written by Advicent Solutions, an entity unrelated to Anita Ritter Financial. The information contained in this article is not intended to be tax, investment, or legal advice, and it may not be relied on for the purpose of avoiding any tax penalties. Anita Ritter Financial does not provide tax or legal advice. You are encouraged to consult with your tax advisor or attorney regarding specific tax issues. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Anita Ritter Financial and Cambridge are not affiliated.

Anita Ritter Financial 2632 South 11th Street

Kalamazoo, Michigan 49009

Ph: 269.492.9701 x 206

anita@anitaritterfinancial.com

www.anitaritterfinancial.com

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Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Anita Ritter Financial and Cambridge are not affiliated.

ANITA RITTER FINANCIAL

2632 SOUTH 11TH STREET

KALAMAZOO, MICHIGAN 49009

PH: 269.492.9701 X 206

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