Key Points to Help you Feel more at Ease with this Nutty Volatility

Epic volatility is the norm? Check out this list from the LPL group. First point they make: This. Is. Normal. I love it. Good stuff. The message is this: Hang in there, you’ll be rewarded. And finally, to make you feel better, you’re not alone…

LPL’s article started off with a reassuring message in these times of nutty volatility. It said, “Although market uncertainty might make you feel jittery, keeping your investment cool is critical to your financial success.” I totally agree. No doubt, it’s difficult watching your cherished portfolio bob up and down. Before you drive yourself batty, consider these six things before, as LPL puts it, “acting out of emotion”:

1. Again, remember “This. Is. Normal.”

It goes with the territory and that is, ‘volatility is part of investing’. Yep, when stock prices steadily rise with little movement, it’s easier said than done, but don’t forget the fact that volatility is incredibly common. It’s the norm, not the exception.

The past teaches. Always remember what happened in the past. If you’re old enough, you’ll recall the early 2000’s ‘tech bust’, then again in 2008 with the big boom. It happens. That’s why they call it, ‘cyclical’. The market dips like clockwork almost annually. Don’t fret, and especially don’t freaking panic. Because, let’s face it, the ‘best part may be what happens after these dips’, says LPL. I agree.

Get this, research show that after a correction, the average returns exceed 23% over the next 12 months.1 Nice!

2. Patience, my friend. You’ll be (typically) rewarded.

LPL did a good job with their research. LPL states, “Investing in the stock market gives you a chance to profit from innovation, economic progress, and compound growth. But to get results, you need patience and time.” LPL went on to say, “On this note, it’s helpful to keep the market’s performance history top-of-mind:

Since 1990, the Dow Jones Industrial Average has achieved 9.5% annualized gains, including dividends. Even if you were to look at shorter time horizons since 1950, the S&P 500 has risen 83% of the time across a five-year horizon, 92% across 10-year periods, and 100% of all rolling 15-year periods.2

And while history can’t predict future performance, it can give you an idea of what could happen if you try to take a shortcut or “panic sell” when markets are fluctuating:

From 1990 to 2020, the S&P 500 Index’s annualized gain was 7.5% (excluding dividends), but the average equity investor’s return was only 2.9%.Why the 4.6% gap? Because when stock prices begin to fall, many investors given in to fear, which drives them to sell their investments – even though it may not be in their best interest.”

My fav investor, like millions of others’ is the ‘oracle of Omaha’, Warren Buffet. He once famously said, investing in the stock market is “a way for the impatient to transfer money to the patient.”4

3. Market timing doesn’t work

We’ve heard it over and over. But clients keep trying to outsmart the smart guys who do this for a living. Analysts and CFA’s keep telling us not to time the market, it could be a costly mistake. Do people listen? Of course, not. We’re human.

LPL says, “It’s impossible to predict when a stock or the market as a whole will peak or bottom, even if you’re an expert. In a market decline, if you sell in fear of losing more, you’ll then have to figure out when to jump back in, which is equally difficult. Plus you risk locking in your losses if you re-enter at the wrong time. For example, between 1990 and 2020, the biggest gains (and losses) in the market happened within days of each other, which means you didn’t have to be out of the market for long to miss out on the upswing.Because even in “bad” markets, there are a lot of good days, and you want to be “in” for those days.”

4. No Sweat, Opportunities abound

The creative analyticals tend to win at this game of looking at volatility from both buying and selling angles. LPL reminds us, “When stocks decline, you can “buy in” at a lower price and potentially make money when the market rights itself. When the decline is part of an overall cycle, this means stocks are trading below their intrinsic values, which means they offer an improved price-to-earnings ratio.”

5. LPL says, “There are ways to enjoy a smoother experience

Good ‘ol dollar-cost averaging(DCA). It’s simple and basic, but it works. DCA can help reduce the overall impact of price volatility and lower the cost per share of your investments. Forget about timing the market; trying to get in and out at the “right” time. Instead, dollar cost averaging can be a better strategy to help you avoid timing mistakes. Ultimately, it removes the dreaded, ’emotion’ from your decision-making process. DCA can help keep your long-term goals in mind.5

6. We’re all in it together. You’re not alone

As a final reminder, LPL tells us that, ‘in times of market volatility and economic uncertainty, remember that you’re not alone.’ Good advice for the wary. The best advice LPL had in their entire article was this: Consult your financial advisor for additional perspective and context, and review your investment strategy from a life-goals perspective to ensure you’re headed in the right direction to pursue your financial goals. As a fiduciary financial advisor, I commend LPL’s wisdom. Smart guys.

Source: LPL Research, Ned Davis Research, FactSet 4/29/22
Source: LPL Research, FactSet 4/29/22
Source: LPL Research, Bloomberg, DALBAR, ClearBridge Investments 6/30/21
Source: “Winning In The Market With The Patience Of The Wright Brothers And Warren Buffett,” Forbes, (January 2018).

This material was prepared by LPL Financial, LLC.

Heads up, Military Servicemembers and Federal Employees! What You Need to Know about the Thrift Savings Plan

For the past twenty-two years I’ve worked with clients who have a wide variety of workplace retirement accounts. From 401(k) to 403(b), including the Thrift Savings Plan (TSP). All of these programs vary in terms of their investment offerings, fees, and other characteristics. But the largest employer in the country–the U.S. government–has the TSP. It is the Federal government’s own ‘defined contribution’ plan. Both civilian Federal government employees (i.e. GS-types) as well as military servicemembers have access to the TSP. In fact, even our U.S. military veterans, can choose to keep their TSP accounts. One caveat: Veterans can no longer make contributions. But there are a multitude of things we can do to remedy that issue.

As a whole, all workplace-defined contribution plans are pretty similar in their features (i.e., many today offer Roth options, as well as, employer matches). However, the one big thing that makes the TSP unique is that it has lower fees compared to private-sector plans. This is a good thing. Another unique feature is that it has a fixed-income investment option, which is exclusive to the TSP.

Last year (2022), the Thrift Savings Plan saw some major changes, including the opening of a “Mutual Fund Window”. This is another positive, I believe. What it does is it supplements the previously very limited TSP offering of investment funds. One additional thing to note: Participants need to know that the associated expenses make it quite pricey. Another techy update to the TSP was the introduction of a smartphone app. This is cool, but it requires some time to implement. I know this because I recently helped a longtime client (a ‘nuke’ from Navy/Pearl Harbor who moved to New Jersey) navigate these new changes. He had to decide if investing through the Mutual Fund Window made sense for him; it did. We had to go through an entire re-registration process for the new site via the mobile app to ensure his critical information (i.e. beneficiary information) got transferred correctly.

It only makes sense that the majority of my military clients transition into new “encore” careers. They’re still quite young in comparision to the traditional, civilian retirement age here in the U.S. of age 60+. One thing I always emphasize is the need to compare and contrast what they have (TSP) versus what is now available to them (i.e. 401k, etc.). We always start by looking at balancing their new cash flow–what the can afford to sock aside–especially during their transition period.

As for my clients who are still on active duty, it requires an annual review like many of my civilian clients. What’s different about my valued military guys is this: they deploy. And when they deploy to combat zones, there are benefits, as well as related TSP considerations to be aware of. For one, their income earned while deployed in a combat zone is tax-free. This is a good thing, for sure. But we need to keep an eye on woefully blending or commingling this tax-free combat pay with taxable earnings. This messes things up. But we can work to prevent this by planning for it. From the get-go, I implore my military (and civilian) clients to communicate and keep me posted on recent changes, like going on deployments. We can avoid issues by making Roth contributions during periods where income is not taxed. Another point worth noting during a period of combat deployment is that the annual deferral limit increases quite drastically. Again, a good thing. This is an opportunity for them to contribute even more money to the TSP. Of course, it all boils down to cash flow. And very much like their civilian counterparts, I find that every single military client has a unique set of circumstances.

The bottom line is that the TSP is very similar to the other workplace retirement plans, such as the 401(k). However, Federal employees and especially, our hard-fighting military servicemembers have a very different job–they serve our country! For this primary reason, it is my mission to give back and serve their families.

What is an RIA, anyway?

An RIA is a registered investment adviser. Is that a stockbroker? No. Here’s an objective, succinct piece from TD Ameritrade. It explains the stark differences between an RIA and other financial planners and registered reps from broker-dealers. As I shared in my New Year’s article (December 28, 2022), you would think that all financial advisors are legally obligated to act in the best interests of their clients, right? Surprisingly, the answer is no. Only fiduciary financial advisors are required to act in the best interests of their clients. I’m still blown away by that, and clients of investment salespeople should be too.

Benefits of Working with an RIA (TD Ameritrade)

RIA’s are fiduciaries. It is what sets them apart professionally. That word, fiduciary, means a lot. It is an odd word, but arguably the most important word in financial planning and wealth management. It originates from the Latin word, fidere (“to trust”). But as I pointed out previously, it is much more than just a word. It is a service mindset. Serving others’. As fiduciary financial advisors (vs. commission-based agents), we are legally obligated to act in your best interest when helping you make decisions about your money. Do yourself a favor, work with a fiduciary.

Legal disclaimer

The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The TWG LLC updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs. Aloha!

Fight Inflation by Hedging Your Retirement Portfolio

The Seesaw Effect of Stocks & Bonds and Yield & Price

With the stock market struggling to break out of this down market, and with bearish experts saying a recession is looming, some clients are seeking fixed income. As investors, we’ve all heard the idiom, stocks & bonds, right? Basic diversification. Remember the seesaw effect: When yields rise, prices fall. Supposedly, the idea is when one goes up, the other goes down, like a seesaw. So, what happened in 2022, when both markets were down? Short answer: Inflation. A fundamental principle of bond investing is that market interest rates and bond prices generally move in opposite directions. When market interest rates rise, prices of fixed-rate bonds fall. This is interest rate risk. Misconception that if a bond is a US Gov’t obligation, the bond will not lose value. In fact, the US Gov’t does not guarantee the market value of a bond if you sell the bond before it matures. But, yes, it is complicated. Check out this PBS special.

It’s a bit early to state with certainty that the bear market is over for U.S. stocks (look at what happened just yesterday—1/30/23). With a plethora of issues like record inflation, rising interest rates, the ongoing Ukraine war, along with pending profit downgrades, and added tensions with China, we’re in a tough spot as a world economy. And on top of that, there are some forecasters pegging the probability of a recession at 60%+. However, anecdotally, most investors I’ve talked to have moved on from their dire inflation concerns. But the macroeconomic picture is far from being completely rosy. As a result, more and more investors are hedging by increasing their exposure to safer havens like, U.S. Treasuries, Munis and investment-grade bonds. Amidst the turmoil, these investors are just trying to ride it out, staying patient and in the meantime, collecting some income. In my opinion, not a bad idea. But of course, it all depends on where you stand. If you’re getting closer to retirement, you might want to discuss with your financial advisor an allocation shift to hold some of your retirement monies in a traditional savings or money market account. The good news is that interest rates are up. As a result, you’ll be earning more in interest now than you would have over the last several years.

Make no mistake about it, this inflation thing is real. I recently went to Zippy’s here in Honolulu and simple food for the soul, Oxtail Soup, is $28! I was floored, but still ordered it. Inflation is everywhere and impacts everything we buy. But it is nothing new. I still remember the impact inflationary pressures had on us as a kid growing up on the island of Maui in the mid-seventies. At the time, gas prices were soaring, and supply levels were diving. OPEC decisions made us wait in our cars in long lines for hours at a time just to get fuel for our cars. But we survived and just like we did, keiki today will reflect on what it was like to live in 2022 with the worst inflation to hit our U.S. economy in 40 years. Hopefully inflation has peaked in 2022. For more clarity, many of us are waiting for the Federal Reserve to speak up. Up to this point, Powell & Co. has remained committed to their campaign of interest rate hikes. In fact, it has been the most aggressive since the Carter and Reagan administrations. For now, we’ll see what happens tomorrow when Jay Powell talks to the world. My advice: Take it in stride, one step at a time…gw


The deadline for establishing a Traditional IRA or a Roth IRA in order to make a 2022 contribution is Tuesday, April 18, 2023. All applications must be signed and submitted (including e-signature applications) to Advisor Services in good order by Tuesday, April 18, 2023.

The contribution funding deadline for Traditional IRA and Roth IRA Accounts is Tuesday, April 18, 2023, regardless of whether the client has filed an extension with the Internal Revenue Service (IRS) to file their tax return.
It is very important that IRA contribution checks and deposit manifest clearly indicate the contribution year as 2022 or 2023. Per IRS regulations, if a tax year is not indicated, the contribution will be coded and processed as a current year contribution. In order to adjust 2023 contributions to 2022, a letter of instruction is required from the client no later than Tuesday, April 18, 2023.

“RMD Time”—Required Minimum Distributions (RMD)

Of course, clients’ The Wheeler Group LLC can reach out to us with any specific RMD questions. Since it is highly dependent on your unique situation (i.e. age, holdings, etc.) you need to reach out to your personal financial advisor. Here are some general RMD points of discussion:

  • For clients who attained the age of 72 in 2022 and are taking advantage of the April 1st, 2023, extension please see below to determine applicable deadline regarding Required Minimum Distribution (RMD).  Note:  Any requests to sell mutual funds, stocks, or bonds in order to make an RMD must be received by Advisor Services prior to the dates noted below to allow for trade settlement and processing.
Year client reached the age of 72RMD MUST be made by:Investments must be sold by:
2022Friday, March 31, 2023Wednesday March 29, 2023
  • Clients are subject to a 50% federal excise tax on any percentage of an RMD not taken by the required deadline.

As fiduciaries, we are here to help our clients. However, when it comes to tax advice and preparation, you need to contact your CPA, or accountantcy provider. At The Wheeler Group LLC, we DO NOT PROVIDE TAX ADVICE. We are trusted financial advisors and as such, we are here as a financial resource to provide valuable information and keep you on track. At the same time, never hesitate to reach out and contact us. Here’s to a healthy, prosperous 2023 to you all. Aloha!

A New Word for the New Year

Recently, I had a client ask me, “hey, Garrett, are you a fiduciary?” Yes, I am, I told her. And thanks for asking, I replied. I worked hard to earn that right to answer in the affirmative. The fact is that every client should ask their potential advisor the very same question. Yes, it is an odd word, but arguably the most important word in financial planning and wealth management. Unfortunately, few people are familiar with what it truly means. It originates from the Latin word, fidere (“to trust”). But it is so much more than just a word. As fiduciary financial advisors (vs. commission-based agents), we are legally obligated to act in your best interest when helping you make decisions about your money. This is a huge differentiator.

One would think that all financial advisors would be obligated to do this, act in the best interests of their clients. However, less than 15% of financial advisors are fiduciaries, yet the majority of consumers think that EVERY financial advisor is a fiduciary. To be clear, only financial advisors who are fiduciaries are required to act in the best interests of their clients. Scary, right? For this reason, I want to share three reasons why you need to have a fiduciary financial advisor in your corner—no matter your stage in life.

  1. Objectivity: When making choices about your retirement savings, assets, investments, or anything else, a fiduciary will look objectively at your financial picture.
  2. Disclosure of Conflicts of Interest: A conflict of interest is when someone is in a position to make a decision based on an ulterior motive. Fiduciaries are required to disclose and avoid conflicts of interest.
  3. Scope of Financial Concerns: As fiduciaries, we are here for you when it comes to any and all questions you may have about your money. Whether it’s a one-and-done meeting or a nurturing a long-term relationship, you can come to us.

I hope these three considerations have armed you with the knowledge to vet potential financial advisors. If you are looking for a fiduciary, or if your current advisor only provides a suitability standard of care, we would love to connect with you. Please reach out to us for an introductory conversation. And, as always, our initial advisory session is without cost or obligation to you. We’re on your side. Our goal is simple, to focus on what best meets your objectives. 

Together, let’s make 2023 a year to remember.

Ideas without action are worthless. —Harvey Mackay

Hau ‘oli Makahiki Hou! Happy New Year!

Legal disclaimer

The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The TWG updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs. Aloha!

Retiree Regrets and Mistakes to Learn From and Avoid

“It’s good to learn from your mistakes. It is better to learn from other people’s mistakes.” — Warren Buffett

I recently watched a CBS Morning news segment entitled, ‘What would you tell your younger self?’ Great segway into planning for a long retirement, God willing, right? Stats say that many retirees are not happy with the way they prepared for retirement. The way I see it, today’s workers can learn from these regrets and avoid them by creating a retirement plan and sticking to it. Yep, I know, easier said than done.

Planning for retirement can seem confusing and complicated, so it’s not surprising that two-thirds of retirees say they have regrets about how they prepared for it, according to a recent survey. More worrisome is the fact that many of today’s workers continue to do the same things the retirees wish they had not. So, I suggest to younger people that they learn what can go wrong in retirement NOW, to avoid it later in life. Same old story: If I only knew what I know now, right? Anyway. Life is unpredictable. Help yourself. Do what you can to plan for a long life.

After 22 years of helping people with planning for a rewarding retirement, I hear a lot of the same things repeated from retirees about what they would have done differently. Many preretirees ask themselves questions like, ‘Have I saved enough money to retire?,’ or ‘Will I be able to maintain the standard of living I’ve grown accustomed to?’. Financial planners cite three retirement phases: Go-Go, Slow-Go and No-Go. In the Go-Go years, typically 65 to 75, healthy young retirees spend a lot on travel, hobbies, and scratching life-long dreams off their bucket list. Retirees are less active between 76 and 85 in the Slow-Go years and tend to spend their No-Go years of 86 to 100 quietly. More than more than half (55 percent) of retirees said they have retirement planning regrets. The Washington Post ran an article entitled, “The top regrets of retirees” ( Citing a Global Atlantic survey (2018 survey of 4,200 pre-retirees and retirees in the United States), here are three (3) regrets of retirees:

1.               Being too reliant on Social Security.

2.               They did not pay down debt before retiring.

3.               They didn’t save enough.

See the article for more details. One point it made was that thirty-nine percent (39%) of retirees reported spending more than they expected. And consistent universally in the financial planning world, the article reiterated, “The risk of running out of money is real.” When you get right down it, why waste your energy mourning the past? Move on. You can’t change the past. And if you do have regrets, well, avoid spending too much time in what my mother (author, Dr. Linda Wheeler, calls, ‘the tunnel of suffering.’ She tells audiences, ‘Don’t grow roots there…work to get out!’ So, the point is, adapt and take a page from the late poet and author Maya Angelou’s playbook. Angelou said, “Do the best you can until you know better. Then when you know better, do better.” What else is there, right?

Another idea is to focus on what really matters. At 88, Clint Eastwood was asked, “How do you remain so young and active?” The now 92 y.o. Clint replied, “I don’t let the old man in.” Yep, tough mindset for sure. Some fight the frailty aspect of aging. Others just give in, saying c’est la vie. All I know is that life is unpredictable. In my practice, we discuss risks in retirement. Longevity happens to be one of them. Optimists will comment, what is wrong with living a long life? Nada. It is about addressing the risks if you choose. My partners at St. Francis Healthcare are sponsoring a FREE virtual LTCi educ session I am conducting tomorrow evening via Zoom. Join us. Here is the link to register:

Heard of FTX? Celebs Sued in $1 Billion Ponzi Scheme

By now you have heard about the implosion of FTX. Among others, the Brady’s, Shaquille O’Neal, Steph Curry, David Ortiz, Shohei Ohtani and Naomi Osaka. Even “Mr. Wonderful”, Kevin O’Leary is apparently named in the lawsuit. The suit said FTX needed these big names, “to continue funneling investors into the FTX Ponzi scheme…” It also said their “misrepresentations and omissions” make them liable after FTX’s downfall.

So, what does FTX do? We all know the term cryptocurrency. It is ubiquitous. Let’s face it, “Crypto” is part of our vernacular today, but what is it? That’s the problem, we don’t know what it is. It’s crazy. I learned that there are over 17,000 different types of cryptocurrencies. Yup, 17k. Get this, it’s become so acceptable as ‘currency’ today that some professional stud athletes are requesting that their salaries be paid in Bitcoin. Scary, but true. We all have a choice. It’s your decision.

Many equate FTX with Bitcoin, as being one in the same. Two of a kind. They’re two very different things. With equities, that’s like saying Apple stock is the same as Revlon stock. Very different, one is very profitable (and some say, overvalued), whereas the other is bankrupt. The crypto understanding gap is huge; we need accurate information. Understanding what it is, and what it is not crucial.

A WSJ article (11/17/22) spells it out. Entitled, “New CEO Says FTX Suffered ‘Complete Failure of Corporate Controls”.

Closer to home, here’s a question I get from well-intentioned clients: ‘Hey G, should crypto be a part of my investment portfolio?’ My boilerplate response, ‘it depends’. My response is often twofold: Number one, do your due diligence (your homework) based on your risk tolerance (crypto is not for the frail at heart). Secondly, why do you have an interest in crypto? Of course, like all investing, most blurt out: ‘to make money’. But is it worth the immense risk? To be sure, there’s a lot of equities and securities out there that are equally risk oriented. But why crypto? Because it’s exciting and relatively new? I get it. But please do your research.

Despite the long-term unknown, I actually believe that cryptocurrencies will be around in the future. At least some iteration of it. In what form exactly? Who knows? One thing I do know is it remains an emerging asset class. And if you’re going to invest serious money (‘serious’ is relative to you), you need to triple-down on your research. Go deep and study. It’s your money. I’ve said it repeatedly vis-à-vis investments—caveat emptor (buyer beware). We live in the age of scams and scammers. Protect yourself or just don’t play the game. It is zero-sum. It’s just too easy to fall prey to these rip-off artists with their slick, manipulative marketing. Research. Take your time. And I implore you, do not invest your life savings into crypto. Unless, of course, you’re willing to lose it all. Not unlike Vegas in that way.

Compliance Statement

In full transparency, I have a small investment in Bitcoin through Gemini. However, I do not put myself out as an expert in Cryptocurrency, nor do I have specialized knowledge in blockchain technology. I am a licensed fiduciary; fee-based financial advisor (series 7, 65, 63). This is not an offer to sell or buy any security or interest. The content of this article is strictly for informational purposes only. It is not intended as professional or expert advice in any way. Seek advice from your legal counsel, and/or financial advisor.

Does it Payoff to Have a Financial Advisor?

Valid question. Here’s a Vanguard study with the facts. Again, as I’ve always said, it depends. Your unique situation drives everything.

We’re in the fourth quarter of 2022, and I feel it’s more important now than ever to review your overall financial plan with a fiduciary level advisor. Here’s one reason from Bank of America’s investment division. BofA says, “economic growth won’t approach ‘normal’ until as late as 2025. So what? Well, this could mean your current financial plan might leave you without enough money to last your retirement. And with longevity being a huge risk in retirement, it matters. In addition, ’emotionally-charged decisions to sell off large quantities of stocks or other investments now lock in your losses, removing any chance for future growth. Research suggests people who work with a financial advisor feel more at ease about their finances and could end up with about 15% more money to spend in retirement.1

Consider this example: A recent Vanguard study found that, on average, a hypothetical $500K investment would grow to over $3.4 million under the care of an advisor over 25 years, whereas the expected value from self-management would be $1.69 million, or 50% less. In other words, an advisor-managed portfolio would average 8% annualized growth over a 25-year period, compared to 5% from a self-managed portfolio.2

Assuming 5% annualized growth of $500k portfolio vs 8% annualized growth of advisor managed portfolio over 25 years. The hypothetical study discussed above assumes a 5% net return and a 3% net annual value add for professional financial advice to performance based on the Vanguard Whitepaper “Putting a Value on your Value, Quantifying Vanguard Advisor’s Alpha”. Please carefully review the methodologies employed in the Vanguard Whitepaper. The value of professional investment advice is only an illustrative estimate and varies with each unique client’s individual circumstances and portfolio composition. Carefully consider your investment objectives, risk factors, and perform your own due diligence before choosing an investment adviser.

1. Journal of Retirement Study Winter (2020). The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in the Journal of Retirement study.

2. Vanguard (July 2022), Putting a Value on Your Value. he projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in the Vanguard whitepaper.

This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. The Wheeler Group LLC is a licensed Investment Advisor Representative and fiduciary-level advisor.

Long-Term Care Insurance is NOT for Everyone

November 2022 is Long-Term Care (LTC) awareness month, so let’s be real. When it comes to LTC insurance, ‘caveat emptor’–“let the buyer beware.” My position is that traditional long-term care is NOT for everyone. Don’t be sold a bill of goods. Do your due diligence (your homework). You may not be a candidate for this type of coverage.

The good news is that people are living longer. The bad news is that the longer we live, there is a greater risk that we will need long-term care services, which can be costly and financially devastating, especially here in the islands. A colleague of mine, Mike Pinkans, who is a well-respected CFA & CFP, shared a recent study suggesting that only 16% of Americans have financially prepared for a possible LTC need while statistics suggest that 70% of those age 65 and older will need it. That’s a cavernous divide. Why? People understand the need, they just haven’t done anything about it.

Let’s be clear: Long-term care doesn’t just affect an individual; it impacts their entire ohana. Family members provide most of the informal care, which requires time, willingness and sacrifice. I have a friend going through this situation right now. They’ve divided up the days between siblings to care for their mom. And their mom knows the all-too-real physical and emotional toll it takes on the family caregiver. It can be very stressful and taxing. Mom previously took care of their dad, who has since passed. With Long-term care insurance in place, it puts people in control, preserves their dignity and independence, protects assets and provides choice of care settings. Having a long-term care plan can save your relationships too. Nothing is more important, to me.

What place comes to mind when you hear the words “Long Term Care?” If you’re like me, ‘Nursing Home’. But let me ask, have you ever known anyone who needed assistance or help to get through the day? They were probably at home, right? So why don’t more of us have LTCi? It’s the old, ‘it won’t happen to me’ syndrome. But with glaring statistics suggesting that 70% of those age 65 and older will need it, it’s a weak argument against the need to carry such coverage. But again, an expert, fiduciary-level analysis needs to take place. With no assets comes no need for protection. With capital assets comes the real need to protect them. But yes, it is complicated because it involves emotion; revolving around dignity, control and independence. So it requires expert advice; not product peddlers.

My connection to disability and long-term care (LTC) insurance isn’t strictly a professional one. It’s a personal one too. For this reason, I believe every American deserves that some level of financial protection.

Do you actually need Long-Term Care Insurance(LTCi)? The chances of needing long-term care are 7 out of 10. Parallel, did you know that every 3 seconds someone in the US develops dementia? I did not. One thing I do know is that disabilities primarily occur due to illness, not accidents. The chances are only 7 out of 100 that you will have an auto accident sometime in your life. It is a further anomaly to have a life changing auto accident; but it happened to me in 2005(spinal cord injury). What kind of financial lifestyle would you be returning to after you recovered and then you lived another 50+ years? Unfortunately, for many, it means spending down a significant portion of your savings and assets.

So, the bottom-line question for you remains, if it does happen, will you be able to afford to pay the bills yourself? We know this: If you become disabled, so that long-term care is required, it is killer expensive. No doubt about it. And it’s not getting any cheaper anytime soon—especially in Hawaii, where a severe shortage of nursing homes is driving prices higher each and every year. Again, we live in paradise and the ‘paradise tax’ is no joke. So, ask yourself: if long-term care is so expensive, how long will my assets and investments last if I became disabled? That tells you whether you need LTCi.

As a financial advisor, I’m sharing with clients that National Long Term Care Awareness Month is a prompt to have conversations, learn the facts and analyze the options, and put something officially in place before a need arises.

Today, there are tax-advantaged ‘hybrid’ options to protect yourself and your assets. Learn about Extended Care and Long-Term Care Planning and discover new ways to protect yourself and your assets. Make it a goal to be financially and emotionally prepared to manage longevity for you and your loved ones.

Our goal is to make it as easy as possible to secure LTC coverage with the most consumer-friendly hybrid programs in the marketplace with features such as, no intrusive underwriting (no paramed exams, etc.). We deal with only the very best companies out there, all with an ‘A’ (Excellent) rating with A.M.  Speak to one of our specialists or attend one of our free webinars hosted by St. Francis Healthcare Systems of Hawaii. Find out if long-term care insurance fits into your plans. Call us today at (808)216-4147 or visit