Avoid the Big Surprise Coming Your Way After Retirement

Are you and your family ready for the big surprise? Aging happens, and it should not be a surprise. Prepare your family and finances for future changes in health, body, and mind.

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Avoid the Big Surprise Coming Your Way After Retirement
6 Min Read July 3rd, 2018 Updated:May 29th, 2021

You might remember the old song from the group "Chicago," "Baby What a Big Surprise." Here are some of the lyrics

 "Baby, what a big surprise, Right before my very eyes, Oh, oh, oh, woah, oh." 

When you heard the song on the radio back in the day, you probably were not thinking about getting older and the consequences of aging. The song has nothing to do with getting older and the financial costs and burdens associated with aging. However, usually, you want to avoid the big surprises many families face when they don't prepare their family and finances for the results of longevity and long-term health care.

There are big surprises around the corner, and many people, even their financial advisors, neglect when planning for a successful future retirement. You might prepare for ordinary health expenses, lifestyle, vacations, and legacy concerns. The big surprise that can be devastating but many people don't prepare for is the cost of long-term care services. 

Families Face Crisis Management Without A Plan

When no advance plan exists, it leads to crisis management. The family becomes responsible for either being caregivers or managing paid care. There is a physical, emotional, and financial burden many family members face when they must become caregivers. 

The fact is more and more family members; usually, daughters or daughters-in-law, find themselves thrust into the role of being a caregiver. They do so at a significant personal financial cost due to lost wages and personal spending to cover needs for a parent who needs extended care. 

The job of being a caregiver is physically and emotionally demanding. They must spend a lot of their time away from their own families. These caregivers often neglect their own health and well-being. 

Long-Term Care is Both a Cash Flow Problem and Family Problem

If you have to pay for your own long-term health care, it can quickly drain assets and adversely impact income, lifestyle, and legacy. Your adult children may not make the same decisions you would in spending your money and the choices for care. 

These costs are not cheap. The crisis places a burden on everyone. There is often family conflict. Few families are prepared or trained for this problem despite the odds of needing long-term health care.

The fact is most of us will need some type of long-term care service or support during our lifetime. While most people who require extended care are older, we now see many people under age 65 need extended care services. 

You Like Numbers? Here are Numbers

Here are some numbers which may surprise you:

  • 48%: Percentage of adults who are 65 years or older who will require long-term care services for up to 12 months,  2018 – U.S. Department of Health and Human Services
  • 21%: Percentage of adults who are 65 years or older who will require long-term care services for between 2 and 4.9 years, 2018 – U.S. Department of Health and Human Services
  • 13%: Percentage of adults who are 65 years or older who will require long-term care services for more than 5 years, 2018 – U.S. Department of Health and Human Services
  • 19 years, 3 months: The longest period-of-time a male has received long-term care services from a Long-Term Care Insurance policy, 2 019 – American Association for Long-Term Care Insurance Survey
  • 18 years, 1 month: The longest period-of-time a female has received long-term care services from a Long-Term Care Insurance policy,  2019 – American Association for Long-Term Care Insurance Survey
  • 5.8 Million: The number of Americans currently living with Alzheimer's disease or dementia, 2019 – Alzheimer's Association
  • 200,000: The number of Americans under the age of 65 who have been diagnosed with early-onset Alzheimer's disease, 2019 – Alzheimer's Association
  • 4 to 8 Years: The amount of time an individual is expected to live after being diagnosed with Alzheimer's disease, 2019 – Alzheimer's Association
  • 8,357,100: The number of people who receive long-term care services from all sources, 2015 – CDC – Long-Term Care Services
  • 4,742,500: The number of people who receive long-term care services from home health agencies, 2015 – CDC – Long-Term Care Services
  • 1,383,700: The number of people who receive long-term care services in a nursing home, 2015 – CDC – Long-Term Care Services

The need for long-term care services or supports will either happen or it won't. That is perhaps the most critical statistic you should consider as you prepare for your future retirement. 

Preparing in Advance Avoids the Big Surprise 

No matter what the facts and common sense would suggest, few people prepare for these costs in their retirement plan. The Employee Benefit Research Institute says only 13 percent of those who received professional home health care had long-term care insurance policies in place. 

Remember, without Long-Term Care Insurance, you are fully responsible for these expenses out-of-pocket. Health insurance, including Medicare, will not pay for most long-term care services. Medicaid will pay; however, you must have little or no income and assets. 

People don't plan for long-term care costs for many reasons. Generally, people have one of several fallacies. These include:

  1. "I will never need care." You can be hopeful, but the longer you live, the more likely you will need long-term care.
  2.  "My health insurance or Medicare will pay for my care." No, most long-term care will be out-of-pocket unless you have a Long-Term Care Insurance policy.
  3. "My family will take care of me." No, they have their own careers, families, and responsibilities. 
  4. "I'll buy a policy when I need it." No, you must health-qualify to purchase benefits.
  5. "Long-Term Care Insurance is too expensive." No, Long-Term Care Insurance is very affordable if you purchase a plan in your 40s or 50s when you still enjoy good health.

Long-Term Care Insurance is the Easy and Affordable Solution

Don't put a big surprise on your family by preparing for the financial costs and burdens of aging before you retire. Safeguard savings and income and reduce the stress otherwise placed on your family.

Save the big surprises for other things and avoid the crisis management that your family would face without an advance plan in place.

 Seek Help from a Specialist

Several types of plans are available, so experts suggest speaking to a specialist. This is usually not a financial advisor or general insurance agent. The American Association for Long-Term Care Insurance, a national consumer education and advocacy group, suggests consumers work with a Long-Term Care Insurance specialist. 

Generally, that means a person with years of expertise and experience with at least 500 clients who own Long-Term Care Insurance. Most specialists work with multiple major companies since premiums and underwriting criteria vary dramatically between companies. 

Find a qualified Long-Term Care Insurance specialist by clicking hereBe sure to start planning when you still enjoy good health, ideally in your 40s or 50s.

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About the Author

An LTC News author focusing on long-term care and aging.

LTC News Contributor James Kelly

James Kelly

Contributor since August 21st, 2017

Editor's Note

You can safeguard your 401K, IRA, and other assets and maintain your lifestyle once you retire. However, Long-Term Care Insurance is medically underwritten, so you must have reasonably good health to obtain coverage. Plus, premiums are calculated on your age, health, family history, and other factors.

Tools Available on LTC NEWS

You can start your research with some of the tools available on LTC NEWS. One of the tools includes The Ultimate Long-Term Care Guide, which you can read by clicking here

Forty-five states offer special Partnership Long-Term Care Insurance policies that provide dollar-for-dollar asset protection. These policies offer additional financial peace-of-mind. See if your state offers these policies by clicking here.

One of the best tools is the LTC NEWS Cost of Care Calculator. You can find the current and future costs of long-term health care where you live. This information will help you design an appropriate LTC Insurance policy.

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