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The LynnLeigh JournalLife. Investing. And Everything in BetweenMillions of older adults and younger individuals with disabilitiesrequire assistance with daily activities that many take for granted.According to LongTermCare.gov:About seven out of 10 people turning 65 today can expect toneed some form of long-term care services in their remainingyears.Women need care longer (3.7 years) than men (2.2 years).20 percent will need long-term care for more than five years.Confusion often surrounds the cost of long-term care and who isultimately responsible for paying for it.PREPARING FOR THE FUTURE: SMARTSTRATEGIES FOR LONG-TERM CAREBy Kelly L. Olczak, CFP® NewsletterHighlightsN O V E M B E R 2 0 2 4V O L U M E 1 1Just for Fun:Thanksgiving TriviaMarket Commentary:Understanding theCoverage GapMedicaid’s “Look-Back”Period: Know the RulesExplore Tax-AdvantagedSavings OptionsTap into Home Equity withCautionS&P’s Strong PerformanceAI & US Economic ResilienceCooling Inflation & Fed RateAdjustmentsMixed Outlook: EconomicGrowthThe Balanced ApproachSmart Strategies:

N O V E M B E R 2 0 2 4 V O L U M E 1 12According to a survey published late last year by KFF(entitled The Affordability for Long-Term Care andSupport Services), a leading health policy organizationin the U.S., nearly one in four adults mistakenlybelieve that Medicare will cover the cost of nursinghome care for themselves or a loved one with a long-term illness or disability.And here lies the problem that will affect many in retirement. Medicare is not responsible for coveringlong-term care costs. Medicare will only cover a limited stay in a nursing home following a qualifyinghospitalization. Even then, out-of-pocket costs can add up.Medicaid is the primary source of funds that pay for long-term care, but Medicaid places strict limits onincome and assets, depending on the state and specific program. Moreover, Medicaid has a “look-back”period regarding your assets.Almost half, or 45%, of adults who are 65 years or olderbelieve Medicare will pay these costs.Let’s be clear. Medicare and most health insurance,including Medicare Supplement Insurance (Medigap)not pay custodial care, such as helping with activities of daily living (ADLs), if that is the only care youneed.Medicaid pays for over 60% of long-term care residents, according to KFF.Before we continue, let’s define the two termsHHS.gov defines Medicaid as a “joint federal and state program that helps cover medical costs forsome people with limited income and resources.”Medicare is a “federal health insurance for people 65 or older, and some that are under 65 withcertain disabilities or conditions.”

3N O V E M B E R 2 0 2 4 V O L U M E 1 1In most states, generally speaking, the look back is60 months, per the American Council on Aging.California is 30 months, but that is expected to becompletely phased out by July 2026. New York hasno look back for Community Medicaid.For most states, all financial transactions over thelast 60 months are subject to review.In practical terms, penalties could result if an auditfinds a cash gift to your grandson for a high schooltrip, gifting property or cash to relatives, or sellingassets below market value.So, if Medicaid may not be an option for you, let’s review some alternatives.Consider a health savings account (HSA). Those with high-deductible healthcare plansmay be able to contribute to an HSA and withdraw funds to pay for eligible medicalexpenses. Contributions to an HSA reduce taxable income, appreciate tax-free, andwithdrawals for qualifying medical expenses are not taxed.You may also access funds in your HSA to pay the premiums for most long-term-careinsurance policies. The annual withdrawal depends on your age, ranging from $480 peryear if you are 40 or younger to $5,960 if you are 71 or older (IRS through 2023).12That leads us to long-term care insurance (LTCI). LTCI isn’t cheap, and you won’tqualify if you have a pre-existing debilitating condition, but a policy can providesupport when you most need it. Many seek coverage in their 50s or 60s, and coveragewill vary considerably.

4N O V E M B E R 2 0 2 4 V O L U M E 1 13Most policies are triggered when you are unable to perform two or more “activities ofdaily living” (ADLs) on your own or if you suffer from dementia or a cognitiveimpairment.ADLs include bathing independently, using the bathroom without assistance, dressingoneself, getting in and out of bed without help, eating without assistance, andmaintaining continence.However, LTCI has faced significant criticism due to high costs and rising premiums. Ifyou reach a point where you can no longer afford the premium, you risk losing yourcoverage or having to reduce it, even if you have been paying into the policy for years.As the name suggests, LTCI is insurance. It’s something you hope you never need. If it’sunused, the cost provides peace of mind but not much else.Enter the long-term care annuity. How does this work? You pay a lump sum or regularpremium that provides a benefit that can be used for long-term care expenses. If theLTCI benefit is not needed, you or your heirs have access.But this is a complex product. It has benefits and drawbacks. Underwriters may bemore willing to accept someone with pre-existing conditions. But you may not have fullcoverage immediately. Space limitations prevent a deep dive, but it’s an option we wantyou to be aware of.4Can you self-finance? You can dip into savings to pay for long-term care if you haveadequate resources. But it is costly.According to a Genworth survey, assisted living facility rates increased by 1.4% to anannual national median of $64,200 per year in 2023.

5N O V E M B E R 2 0 2 4 V O L U M E 1 15The national annual median cost of a semi-private room in a skilled nursing facility roseto $104,000, an increase of 4.4%, while the cost of a private room in a nursing homeincreased 4.9% to $116,800.Further complicating this approach is the indefinite time period that one may requirecare. If your assets are depleted, Medicaid may become your best option.Consider a Roth IRA. There are many benefits to a Roth IRA when compared to atraditional IRA. For example, a Roth is not subject to required minimum distributions.If possible, you may decide to keep funds in your Roth until needed for long-term careor LTCI premiums.You must be 59 ½ and have held the Roth for at least five years to avoid taxes orpenalties. There are no restrictions on how you can use the funds withdrawn from aRoth IRA.6Using your home equity. A reverse mortgage allows you to access the equity in yourhome. You do not make monthly payments but you will receive monthly installmentsfrom the lender. The loan is repaid when the borrower no longer lives in the house.Interest and fees are added to the loan balance each month.If one spouse passes away, the other may stay in the home. A homeowner can’t bepushed out of their home. The payments won’t affect your Medicare benefits or SocialSecurity.7You may also tap equity by taking out a home equity line of credit (HELOC). Unlike areverse mortgage, there is no requirement to maintain your home, but if you cannotmake payments, you risk losing your home.

6N O V E M B E R 2 0 2 4 V O L U M E 1 1How you might approach long-term care will depend on your circumstances. We have offered abasic outline of various options. We encourage you to contact us if you have additionalquestions or concerns. If you have questions regarding taxes, please talk to your taxprofessional.Final Thoughts...Two Years and Running....Last month, the bull market turned two years old. Since bottoming on October 12, 2022, theS&P 500 Index has advanced 60% through the last day of October, according to S&P 500 datafrom the St. Louis Federal Reserve.The S&P 500 Index is a market-capitalization-weighted index. Simply put, the largercompanies in the index have a greater influence than the smaller ones.Why is this important? On average, the larger companies have outperformed the smaller ones.According to S&P Global, the top ten largest firms in the S&P 500 have nearly doubled since theS&P 500’s Oct 2022 low.If each stock in the S&P 500 was equally weighted, this measure would have risen a solid 37%from its bottom on October 12, 2022, through October 31, 2024.What accounts for the discrepancy? In part, the AI revolution has helped several large techfirms significantly outperform the broader market.

7N O V E M B E R 2 0 2 4 V O L U M E 1 1Let’s review one more index. The granddaddy of market averages, the Dow Jones IndustrialAverage, which is comprised of 30 companies, touched its most recent bottom on September30, 2022. It’s up an impressive 45% through the end of October, per St. Louis Federal Reservedata.But market strength extends beyond technology. The surprisingly resilient U.S. economy hashelped fuel profit growth, which has helped drive equities higher.While AI and a resilient U.S. economy have been significant factors, let’s consider one more.The rate of inflation has slowed, taking pressure off the Federal Reserve, which hiked interestrates sharply in 2022.The Fed has begun to slowly take its foot off the monetary brakes, with a much-anticipated ratecut near the end of September. It was the first reduction in interest rates by the Fed since early2020.

Yesterday, November 8th, the Fed reduced interest rates again, setting the new range at 4.5% to4.75%. In their post-meeting statement, officials avoided political commentary and gave noexplicit guidance on future rate changes, leaving markets to speculate on what may come next.8N O V E M B E R 2 0 2 4 V O L U M E 1 1Or—let’s consider one more scenario—will the economy fall into a recession?Will the inflation rate continue to slow andgradually return to the Fed’s target of 2%? Will Fed policy help guide the economy towhat’s called an economic soft landing? A softlanding is loosely defined as a slowdown ineconomic growth that leads to lower inflationwithout a recession.Or, will economic growth remain strong,boosting corporate profits while slowing orending rate cuts?Economic forecasters have traditionally struggled to pinpoint the onset of a profit-killing recession.Recessions tend to sneak up on economists. That said, you may recall in 2022, recession forecastswere widespread. Nonetheless, many of the brightest economic minds fell flat with their predictions.Given today’s bull market, paraphrasing what we said last month bears repeating.Robust market performance sometimes leads to a euphoria that can encourage too much risk-taking.We caution against that.Leaning heavily into stocks may underpin returns, but unexpected volatility from any number ofsources can spark shorter-term declines that extend beyond one's comfort level.

9N O V E M B E R 2 0 2 4 V O L U M E 1 1As we gather around the table this Thanksgiving, let's take a moment to dive into a few fun facts,traditions, and a little holiday trivia to share with family and friends!A balanced approach based on your individual financial goals and tolerance for risk helps tap intothe long-term potential stocks have historically offered while helping to diminish some of thedownside risks that can materialize when markets unexpectedly decline.Just for Fun: Thanksgiving EditionThe very first Thanksgiving in 1621 wasn’t just a singlemeal; it was a three-day celebration! The Pilgrims andWampanoag people feasted, played games, and gavethanks for the year’s harvest.Thanksgiving’s Original Feast Was aMarathon!While we might think of turkey as the Thanksgiving staple,the first Thanksgiving probably featured venison, fish, andseasonal vegetables. Turkeys were native to the area, but theyweren’t the main attraction. Imagine a table full of lobster,clams, and wild fowl—Thanksgiving could have taken on awhole different flavor!Turkey Wasn’t the Main Dish

10N O V E M B E R 2 0 2 4 V O L U M E 1 1Americans serve up approximately 46 million turkeyson Thanksgiving Day. That’s enough turkey to circlethe globe, with leftovers for sandwiches! (And let’s behonest—sometimes the leftovers are the best part.)6 Million Turkeys on TablesNationwideWatching football on Thanksgiving began in 1920 with thefirst Thanksgiving Day games held by the NFL. Today, it’spractically a holiday ritual. In fact, the Detroit Lions havehosted a Thanksgiving game every year since 1934, and theDallas Cowboys joined the tradition in 1966.Football and Thanksgiving: A 100-YearTraditionEvery year, one lucky turkey receives a presidential pardon.The tradition officially began in 1989 with President GeorgeH.W. Bush, and the chosen turkey gets to retire peacefully—often to a petting zoo or farm.The Turkey “Pardon”: A PresidentialTradition

As we celebrate Thanksgiving, we’re reminded of the importance of gratitude—not only for the bigmoments but also for the everyday connections that make life meaningful. We’re incrediblygrateful for the trust and partnership you share with us, and for the opportunity to help you onyour financial journey.This season, we’re especially thankful for each of you, our valued clients, who inspire us every day.May your Thanksgiving be filled with warmth, joy, and the company of loved ones. From all of us,have a safe and happy holiday.With heartfelt thanks,N O V E M B E R 2 0 2 4 V O L U M E 1 111LynnLeigh & Company - A Registered Investment AdvisorThis information is provided by LynnLeigh & Co. for general information and educational purposes based upon publicly available information from sources believed to be reliable – LynnLeigh& Co. advisors cannot assure the accuracy or completeness of these materials. The information presented here is not specific to any individual’s personal circumstances. To the extent that thismaterial concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayershould seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice. Pastperformance is not a guarantee of future returns. A Heartfelt Thank You!