LTC Bullet:  The Savage Number 

Thursday, February 9, 2006 


LTC Comment:  Nationally syndicated Chicago Sun-Times financial columnist Terry Savage's latest book is a needful read for aging boomers AND their advisors.  More after the ***news.*** 

*** DRA '05 SIGNED.  President Bush signed the historic Deficit Reduction Act of 2005 into law yesterday saying this about its Medicaid reform provisions:  

"The bill tightens the loopholes that allowed people to game the system by transferring assets to their children so they can qualify for Medicaid benefits.  Along with governors of both parties, we are sending a clear message:  Medicaid will always provide help for those in need, but we will never tolerate waste, fraud, or abuse."  

For the rest of the President's remarks at the signing, go to *** 

*** REPORTERS CALLING.  Yesterday I did long interviews about the new Medicaid reform legislation with reporters from Kiplinger's and the Washington Post.  Setting the record straight is critical.  Claims are rampant from Medicaid planners and others that the DRA will have draconian consequences and deny nursing home care to innocent people who donated to charity.  That's nonsense.  Thankfully, responsible media are seeking the truth.  We expect to do dozens of media interviews over the coming months to ensure that Americans learn the truth about long-term care so they can plan responsibly for that risk and cost.  As you interact with reporters in your local media markets, please refer them to the Center for Long-Term Care Reform's website at and to me for interviews about long-term care public policy. *** 

*** MEDICAID REFORM AND LTC PARTNERSHIPS COULD FAIL.  If states don't implement the Deficit Reduction Act; if the federal government doesn't enforce it; or if the media don't publicize it, little of value will come from this important legislation.  Could that happen?  Yes, that's exactly what happened the last time Congress passed major systemic long-term care reform in the Omnibus Budget Reconciliation Act of 1993.  We at the Center for Long-Term Care Reform aim to make sure it doesn't happen again.  We will fight to ensure that the DRA does the job it's intended to do:  to save Medicaid as the LTC safety net for the poor by unleashing the enormous potential of private long-term care financing.  

We can't do it without you, however.  Having focused full time for months on passage of the legislation, we have to work exclusively now on funding the Center so the real work can continue.  Help us get that job behind us so we can focus full time on implementing, enforcing and publicizing the new long-term care statutory authorities.  Please join the Center, contribute generously, sponsor LTC Bullets, hire us for conference calls, speeches, consulting.  Help us to help you "do well by doing good."  Together we can solve the LTC financing crisis and ensure quality long-term care for all Americans.  Contact Damon at 206-283-7036 or  To schedule conference calls or other work, contact me directly at *** 



LTC Comment:  Terry Savage is a friend of responsible long-term care planning and a staunch ally of the Center for Long-Term Care Reform.  She was an honorary member of our predecessor organization's Board of Directors and she continues as a highly valued advisor and friend.  Following is information about her latest of four books, titled The Savage Number:  How Much Money Do You Need to Retire?  I've read this book and highly recommend it, especially the chapters on home equity conversion and long-term care insurance, which are the Center's prime areas of interest.  Nineteen reviewers of the book on unanimously gave it the top five-star rating.  Following below is enough information to tweak your interest.  Then buy the book, read it, heed its advice, relax, and enjoy yourself--you'll be set for life.  

Steve Moses 


Here's a brief description of The Savage Number from the publisher Wiley's website:   

Nationally known personal finance expert, Terry Savage, shows readers how to find the answers to their retirement questions.  The Savage Number provides the hands-on techniques to plan a successful, satisfying retirement.  Savage takes readers beyond "guesstimates" and wishful thinking.  Instead, she introduces readers to the world of Monte Carlo modeling--the statistical science of modeling multiple alternatives to come up with a range of highly probable results.  The process guides readers through the critical decisions about how to invest their retirement money-and how much they can withdraw to live on-so their money lasts their entire lifetime!  Filled with in-depth insights and practical advice, The Savage Number takes the guesswork out of retirement planning, so readers can overcome those obstacles and comfortably enjoy the rest of their lives. 


More about the author: 

Terry Savage has financial expertise that comes from experience.  She started her career as a stockbroker and became a founding member-and the first woman trader-on the Chicago Board Options Exchange.  She is a nationally known expert on personal finance and is a regular investment and financial markets commentator on CNN, CNBC, PBS, and NBC.  She is the nationally syndicated Chicago Sun-Times personal finance columnist, and author of three best-selling books.  Her most recent book, The Savage Truth on Money (Wiley), was made into an hour-long TV special that aired on PBS.  Terry has won numerous awards, including the National Press Club Award for Outstanding Consumer Journalism and the Outstanding Personal Finance Columnist Award given by the Medill School of Journalism at Northwestern University.  She has also received two Emmys for her television work. 


Here's an excerpt from one of Terry Savage's Chicago Sun-Times columns:  "Some Long-Term Thoughts to Start the New Year," January 5, 2006,

Q:  I am 63 and in good health.  The same goes for my wife of 61.  Our net worth is approximately $1.5 million, with $1.1 million in liquid financial assets.  Do we need long-term care insurance?  On the surface, it seems as if we would be better off financially if we did not purchase LTC insurance and simply self-insured for this possibility. 

A:  Tell me how you'd feel if you had been in, say, President Reagan's shoes -- 12 years of custodial care at approximately $75,000 per year, escalating faster than the Consumer Price Index.  And your wife had to deal with your Alzheimer's.  Would $1.5 million last long enough and still leave her enough to live on?  Or vice versa?  That's the LTC decision. 

Q:  I have a traditional IRA currently worth $35,000.  My husband and I are in the process of moving his elderly parents into an assisted living facility.  We are investigating various financial arrangements.  Would I be able to "cash in" my IRA and turn the funds directly over to the assisted living facility without tax penalty?  Is it possible to withdraw from one's IRA to fund long term care for an in-law? 

A:  No.  That's why I always recommend long-term care insurance.  If you withdraw from your IRA, you pay taxes, penalties -- and lose the future tax deferred growth.  Don't do it.  Who's going to take care of you in your old age? 


Finally, to give you a better idea of what to expect, here's the Table of Contents of The Savage Number

Introduction:  Can You Retire.  


1. The Savage Number.  

2. Time is Money.  

3. The 10 Key Questions.  


4. The Savage Answer:  Monte Carlo Modeling.  

5. Saving Up, Drawing Down.  

6. Getting It All Together.  

7. A Road Map to Monte Carlo.  


8. Stocks, Bonds, and Chicken Money.  

9. Beyond the Basics.  

10. One-Step Retirement Investing.  


11. Where Will the Money Come From?  

12. Social Security and Medicare.  

13. Annuities for Income and Tax-Deferred Growth.  

14. How to Turn Your Home Into Your Pension.  


15. Long-Term Care Insurance: Who Needs It?  

16. How to Understand Long-Term Care Coverage.  

17. Buying Your Long-Term Care Policy.  


18. What's Left?