Airline News:
• Pilot retirement age 67!!! Maybe...
• The pilot age proposal faces opposition from unions and an uncertain fate by a U.S. Senate committee, which will consider its version of the FAA measure on Thursday and does not currently include the pilot age hike.
• The Air Line Pilots Association (ALPA) opposed raising the retirement age and says it could cause airline scheduling and pilot training issues and require reopening pilot contracts. Even if the proposal is approved, the union noted that international rules would still prevent pilots older than 65 from flying in most countries outside the U.S. ALPA called the proposal a "politically driven choice that betrays a fundamental understanding of airline industry operations, the pilot profession, and safety."
• American Airlines pilot sues over ESG funds in his 401k.
• “The complaint by American Airlines pilot Bryan Spence was filed on June 2, 2023, in federal court in Fort Worth, Texas, against American Airlines, its employee benefits committee, Fidelity Investments Institutional, and Financial Engines Advisors.”
• “...the suit is significant because it concerns one of America’s largest pensions, takes aim at new federal guidance involving retirement plans, and may affect the plan’s self- directed brokerage account option, also known as the brokerage window. The brokerage window is the part of a plan that lets participants invest in funds and publicly traded securities outside the limited menu on offer. In 2021, the American Airlines plan brokerage window reportedly had 12% of the plan value.”
• “What’s concerning about this lawsuit if it goes anywhere, is it suggests there is some sort of fiduciary obligation to vet individual funds and individual securities available through a brokerage window,” Hadley says. Attorneys for the plaintiff didn’t respond to requests for comment.”
Questions From The Flight Deck:
1. What are the best wealth-building habits we’ve seen and learned in our experience working with clients?
2. I’ve stopped investing...tired of throwing good money after bad...
Meat of the Mission:
• How to think about LTC...mindset.
• Hard to plan for your 85-year-old self...
• Four options / basis types:
• Standard LTC insurance – pay monthly, forever
• Premiums increase, strict medical screening.
• Use or lose...not totally true, always.
• Annuity – increased payouts
• Do you need an annuity?
• Payout doubles for a few years...
• Hybrid Life Insurance – 2nd to die...or individual policy.
• Life insurance or LTC insurance.
• Self-Funding...
• Plan for it...
• Set aside the funds and name it!
• Tax Considerations
• VA Benefits
• https://www.va.gov/health-care/about-va-health-benefits/long-term-care/
• Private Pay: Even though VA, Medicare, Medicaid and other funding sources cover the costs of some long-term care services and settings, depending on eligibility, many people need to use their own income or savings to pay part of the costs for long term care services or settings they need or prefer. For example, people often use their own resources to pay for:
• Residing in an Assisted Living Facility or Adult Family Home
• Paid caregiver assistance with personal care needs, chores, or meals in their home
• Medicaid Trusts?
• Medicaid trusts are designed to help people qualify for Medicaid, the government health insurance program. Unlike Medicare, which is not means-tested, Medicaid is only available to people of limited financial means.
• The program is administered by states, which determine their own Medicaid eligibility requirements in a variety of ways. In most, the annual income limit is $29,160 or less. This cap includes Social Security and pension benefits as well as wages and investment income. Financial resources such as bank accounts, investments, revocable trusts and real estate typically can’t total more than $2,000. People who have more income and more assets may have to spend their own assets to pay for nursing home care until their assets have declined to the point, they meet the Medicaid caps.
• An irrevocable Medicaid trust is designed to help someone qualify for Medicaid without having to deplete their own assets. After creating the trust, they can transfer in enough assets to bring them below Medicaid’s caps. Once they have done that, assuming they have followed the rules, Medicaid will pay some or all of their nursing home costs. In this way, an irrevocable trust can protect assets from nursing home costs.
Sources