Will your retirement savings survive longevity and long-term care?

By the time you turn 40, you should have resources set aside for your future retirement. Planning for a successful future retirement requires some effort. It would be best if you use your employer’s 401(k) option. If your employer doesn’t offer a 401(k), 403(b), or defined pension program, you should make an effort to save money in an IRA. If you are self-employed, you must open a SEP account. However, planning doesn’t end with saving money.

What happens when your health changes due to prolonged illness, an accident, or simply the impact of aging? As you age, these health risks increase substantially. Will Your Retirement Plan Survive Longevity?

Retirement planning for long-term care has become a top priority for many Gen Xers and Baby Boomers. Many people in their 40s and 70s have personally dealt with the impact of long-term care with a parent or other loved one.

The problem is that too many people forget to protect those retirement funds from the high costs of long-term care. The financial costs and burdens of aging will affect you, your family, your savings and your lifestyle.

You will experience changes in your health, body, and mind, increasing your need for long-term care. Caring is a challenge for your family. Relying on your children to be the caregivers is not a good plan. They have or will have their own careers, families and responsibilities. It’s not that they don’t love you, but having a son or a daughter or a father-in-law as a caregiver is stressful. It can also affect their health and careers.

Spouses are also not a good choice for care. As you get older, so will they. They will also have to deal with their own health and age issues.

Paid care depletes your assets and negatively affects your income and lifestyle. According to the LTC NEWS Cost of Care Calculator (, the cost of long-term care services and supports continues to rise. Even significant savings can be negatively affected.

The current national average cost of home care, based on a 44-hour week, is nearly $4,500 a month. Basic assisted living facility costs start at $4,300 per month plus surcharges based on your needs. Skilled care in a nursing home averages $8,900 a month, more than $100,000 a year. The cost of long-term care services increases over time.

Many people incorrectly assume that Medicare will pay for any future long-term care needs. Health insurance, Medicare, and supplements only pay for a limited number of specialty services, and only if you’re getting better. These insurance options do not cover the costs of custodial services, which help with activities of daily living. However, most people require custodial services as they age.

While most long-term care occurs when we are older, people of all ages require long-term care. Early-onset dementia, including Alzheimer’s disease, the most well-known form of dementia, can occur as early as age 30. Parkinson’s, multiple sclerosis and even strokes occur at younger ages.

It is your good health today that gives you the opportunity to plan ahead.

Medicaid, the medical welfare program, can pay for long-term care, but you must be poor or end up poor. For most people, this is something you want to avoid.

The fact is that the financial costs and burdens of aging will affect your savings and those of your family. Affordable long-term care insurance protects your assets and eases the burden that would otherwise fall on your family.

Although some think long-term care insurance is expensive, it’s actually very affordable for most people, especially if you plan before you retire. Premiums can vary more than 100% between insurance companies.

If you’re in reasonably good health, these policies can easily fit into most people’s budgets. The problem is that too many people seek out a financial advisor or P&C agent with little knowledge in this area. They often make recommendations that are too big, or sometimes too small. Also, many of these professionals only work with one or two insurance companies. Since they don’t have a good understanding of how policies are used at the time of claim, their recommendations are out of line with what you may actually need.

In addition, 45 states offer Long-Term Care Partnership policies, which provide additional dollar-for-dollar asset protection.

There are several types of policies that are available in most states. These include traditional plans, partnership plans that provide additional asset protection, single-premium ‘hybrid’ plans, which also offer a death benefit, and short-term plans that offer broader age and health requirements.

The key is to work with a Long Term Care Insurance specialist who works with the major insurance companies. I always ask a lot of detailed questions to design an appropriate plan based on the client’s specific concerns and budget.

The cost of long-term care services varies from place to place. Most claims start with home care, and many people avoid a nursing home altogether, instead receiving appropriate care at home or in an assisted living facility. These costs are much less than specialized services in a nursing home.

Long-term care insurance will pay benefits at home, adult day care centers, assisted living facilities, memory care, and in traditional skilled nursing homes. With most policies, you and your family can decide how to use your benefits.

Does long-term care insurance work? Absolutely. In 2020, the major insurance companies paid more than $11.6 billion in benefits to American families. Otherwise, these families would have had to deplete their own assets to pay for care, have family members become caregivers, or both.

Because policies are custom designed, you can decide what’s important to you. The key is to plan ahead of retirement. Long-term care insurance is not attractive. It doesn’t sparkle like a new car or new jewelry. You may not show your policy at a party. However, it will give you and your family peace of mind.

Working with a long-term care specialist will allow you to get the precise information you are looking for. Start your research in your 40s and 50s when you have the most affordable options.

The fact is, long-term care insurance is easy, affordable, and has a stable rate of income and asset protection.

Leave a Reply

Your email address will not be published. Required fields are marked *