Many folks these days are dealing with a family member with dementia or a serious physical ailment, and not only must they cope with the emotional and physical demands of the situation but also the financial ramifications.
Without careful financial planning, the surviving spouse may find him- or herself destitute and broke at the end of their spouse’s illness, but fortunately, there are strategies and programs available to prevent that from happening – you just have to act on them before it is too late.
Meet Tigard-based Charles Cannon, a Certified Financial Planner (CFP)™ and a Certified Financial Fiduciary™, who helps folks navigate the high costs of aging, especially when compounded by dementia or physical ailments.
He became interested in this area of financial planning after a woman called and wanted him to come to her house. “She was living with her husband who had Alzheimer’s, and he had always taken care of their finances,” Cannon said. “There are six activities of daily living – bathing, dressing, toileting, transferring in and out of a bed or chair, eating, and continence – and they each have their own spectrum. If someone can’t perform two of them, they are at the point where they need help.
“A doctor confirmed that the woman’s husband could not do two of the six activities, which would have triggered her being able to take advantage of financial benefits, but her previous advisor wasn’t willing to work with her to turn on benefits she was entitled to.
“This started me on a deep dive into protecting families’ assets when they are caring for a family member and may lose their retirement portfolio or their home. Everything we do is based on planning for future needs, but when a crisis of care happens, we are still able to help with immediate needs.”
According to Dementia Care Central, the average cost of assisted living/memory care was $6,150 per month or $73,920 per year as of February 2023, and of course, the costs have risen exponentially since then.
Cannon is a member of a national group of financial advisors called HonorShield that was founded by Kerry Morris, a CFP™ who wrote a book called “Financial Survival for Families in the Grip of Dementia.” HonorShield focuses on utilizing tax incentives, legacy benefits and special coverage to protect investment portfolios from the high costs of aging.
“The group has been beneficial to me to take advantage of the mentoring they offer and for me to mentor others,” Cannon said. “Our No. 1 goal is to help people solve their funding gap. Most people’s income is based on a salary if they are still working plus Social Security and a pension. If their medical care costs are higher than their income, they have a funding gap. They have a crisis of care if they can’t get insurance. We have to close the gap while protecting their assets.
“Seventy percent of the population 65-plus will have a need for custodial care – not skilled care – and Medicare does not cover it… And you will never, ever be as healthy as you were when you were young – this is a game-changer. People must do pre-need planning today. A week doesn’t go by where I don’t hear about a senior with declining finances due to health care costs.”
Cannon explained that “one strategy is to take advantage of the 2010 Pension Protection Act, where you can transfer assets into an annuity. You pay taxes on the gains you take out, but no taxes are paid with the special Pension Protection Act annuities.”
He added, “We are different from other advisors in that we have a solution for clients who are already in crisis. We call it the Forever Funding Plan, and it allows someone already with a need, who can no longer get insurance, to guarantee they will be able to afford their needed care without running out of money.”
Cannon not only works with clients, but he also puts on free seminars in the local area to provide information about dealing with the high costs of aging. Some of the topics he covers are how to stay in your home using IRA funds to pay for care tax-free whether in care or not; how to guard against the financial strain of dementia while also ensuring your loved one gets the best care possible; how to prevent kids from squabbling over parents’ care; how to utilize assets in a tax-free manner to help with long-term care needs; and how to qualify now for a lifetime benefit to protect spousal caregivers if the need arises and/or provide money for the family if no care is needed.
For more information, contact the Cannon Financial Group at charles@cannonfg.com or at 503-620-0607.
Financial Survival for Families in the Grip of Dementia
When: Monday, February 5
9:00 a.m. & 2:00 p.m.
Where: King City Civic Association Clubhouse
15245 SW 116th Ave
King City, OR 97224
Tickets: Seating is complimentary, but limited. Please call 800-495-1236 to reserve your seat
