• When we are young, we are at the left side of the X-curve, we have less assets than your responsibility.

If unexpected happens, who is going to take care of our family?

We can't take that risk, right?

So we need some kind of protection, when we are not there to take care of our family, we need to make sure they are taken good care of.

There is a simple approach to estimate how much we need to protect our family, the DIME formula, we can easily estimate how much protection we need, debt + income + mortgage + education, will be the total amount protection we need, then subtract all the saving and investment we already have, it is roughly how much protection we need.

There are also many financial vehicles, some of them not only can provide life and asset protection, but also provide investment features with growth potentials and downside protection, plus the return will be completely tax-free.

These are beyond the topic of this post, so I am not going to discuss them here.

If you do want to learn more about these financial strategies, go ahead sign up with me, I will send you more information about different type of financial vehicles, that can only provide life and asset protection, but also have investment feature, which allows the cash value to grow along the market, but with downside protection; more importantly, it is completely tax-free...

You can also contact me if you would rather connect with me directly.

Gradually, we are getting older, at some point of our time, we may pass the cross intersection of the X-curve.

• We are gradually enter into the right side of the X-curve, we have less responsibility than our assets.

In general, we are more secure financially. However, we are also getting older, we need to make sure we have enough savings to cover our expenses after we retire.

Of all the people reaching the retirement age, 25% of them will live up to 97 years old; and 50% of them will live up to 92 years old. It seems that we need to live another 30 years after retirement age, by that time, we won't be able to find a job easily, then how can we make sure our retirement income can last that long?

When we are getting older, we may be prone to age-related disease, such as Alzheimer, Dementia Parkinson disease, or cardiovascular disease. Statistics shows that about 70% of the people will need some kind of care.

Let's account for the cheapest care, the in-home care, is costing 90K to 120k per year based on the current market value.

Think about the statistics, there is 70% of chance  that we may need some kind of the in-home care, and with adjusting for inflation rate about 3% per year. You can easily calculate how much the in-home care may cost us by the time we need it.

Let me give you an example, Mike, is currently 50 years old, he is planning to retire at the age of 65, currently have savings about 200k in the bank and 300k in the 401k.

Let's assume the bank has an interest rate of 2% (with adjustment of tax, the actual interest bank interest rate is 1.4%) and his 401k has a return rate of 6%. By the time he is 65 years old, he will have roughly 965K (200*1.014^15+300*1.06^15) for his retirement.

Let's assume the average in-home care is currently 100k per year; after 15 years, it will be 156k per year.

Let's say, at the age of 65, Mike needs in-home care, in addition to his living expenses, 50k per year, so he will need to take our 200k per year, how long do you think his savings would last?

Less than 5 years, he will run out of money. Who will take care of him?

Even if he is totally healthy, he does not need any in-home care, how long do you think his savings will last, about 20 years? So he will run out of money at the age of 85, right? Who is going to take care of him then?

The above numbers may not be very accurate, since we did not account for rate of return, we did not accounted for market downturns, nor did we take social security into consideration. I was just trying to give you some rough ideas.

So in conclusion, we are gradually passing to the right side of the X-curve, we are financially more secure, but when we are approaching the retirement age, we can become less secure again.

Then we need to think about protecting ourselves again, we don't want to put too much burden to our loved ones or our kids, right?

What can we do to protect ourselves?

We will need protect ourselves against long-term-care, we need to have some source of income that can last a lifetime.

There are many type of financial vehicles, that can protect you against long-term-care, but the premium can be dramatically different, due to age, health condition, habit and family history etc.

For retirement income, there are also many types of financial vehicles that can provide lifetime income, which I will not cover here.

If however, you do want to learn more about these financial strategies, go ahead sign up with me, I will send you more information about the long-term care, the financial vehicles that can provide lifetime income ... or you can also contact me if you want to connect with me directly.

• Kids education

For families with kids going to college, we design plans to increase their chance of getting financial aid with the minimum out-of-pocket expense while maximize the usage of their 529 savings plan.