How to find the right financial planner

I’m 72 and still employed with a salary of $80,000. My wife and I have a home with about $1.6 million in equity. We have almost $4 million in real estate investments, $200,000 in stocks, IRAs worth about $250,000 and about $175,000 in cash.

Although it may seem like we have a lot, I have no clue what to do. I worry about the need for longterm care in the future, or what would happen if I stopped working and lost that income.

I tried contacting quite a few fee-only financial planners, and they all told me they wouldn’t work with me unless I had $500,000 to give them to invest. Any suggestions on where I can get some real advice without giving someone control of money that I don’t have anyway?

Answer: You’re describing the “assets under management” model, in which advisors charge a percentage of the assets they manage for clients and often require the clients to have a minimum level of investable assets such as stocks, bonds and cash. This model often isn’t a great fit for people who are just starting out, who don’t want asset management or who, like you, have most of their money in less liquid investments.

Fortunately, there are other ways fee-only planners get paid. Some, including those represented by the Garrett Planning Network, charge by the hour. Others, represented by the XY Planning Network and the Alliance of Comprehensive Planners, use the retainer model, in which clients pay monthly or quarterly fees. Interview a few planners from these organizations to find a fit.

Making the most of a gift for a sibling

Dear Liz: My brother and his wife are living modestly on Social Security and delivering for a food service. Occasionally, I send him some money when I can. I have some money put aside and am able to send him about $5,000 now instead of leaving it to him in my will. (He is six years older.) I am afraid that he and his wife may spend it on a trip or frivolity and will not put it aside for home health or nursing care when they need it. Your thoughts?

Answer: Please make the gift and hope that they do spend it on a trip or something else fun.

According to the U.S. Department of Health and Human Services, someone turning 65 today has about a 70% chance of needing long-term care services.

Women typically need care for 3.7 years on average, while men need 2.2 years.

Medicare, the government healthcare program for people 65 and older, typically doesn’t pay for nursing home and other custodial care expenses. However, Medicaid — the government health insurance program for the poor — does. If your brother and his wife need custodial care, chances are good they will quickly run through their assets and wind up poor enough that Medicaid will pick up the bills.

The amount you can give them wouldn’t make much of a dent in the bill if they need potentially expensive custodial care someday. Your $5,000 gift would pay for about a month of an in-home health aid, and a couple of weeks in a typical nursing home.

But $5,000 could go a long way in delivering a memorable experience while they have the health and energy to enjoy it.