Most experts were reporting that the economy was doing very well. While the President said it was “the best ever,” and the facts showed outstanding unemployment numbers, job growth, and substantial market growth.
All this good news was making many Americans feel good about their future or current retirements. Then, out of the blue, the virus crisis came on the scene. This virus was not the flu, but the flu was already impacting people worldwide.
According to John Hopkins, an estimated 1 billion cases of the flu are reported worldwide, 9.3 million to 45 million cases in the U.S. per year.
Since October 2019, the flu bug was hitting us the U.S. hard.
Virus Crisis Stresses Retirement Savings
The media attention was not on the flu but on the coronavirus, otherwise known as COVID-19. A John Hopkins world map shows much of the world now being impacted by this virus.
By now, most of us understand the health concerns with COVID-19. For many, the unexpected drop in market value was a significant concern. Despite the good economy, many people saw the value of their retirement funds (401(k), IRA, SEP) and other assets drop substantially. According to CNBC and the Wall Street Journal, this was one of the biggest market losses we have seen.
Some people think they can self-fund their future long-term care with the use of their investments. They explain they have plenty of assets to pay for their future care. According to experts, there are several flaws in this philosophy.
Self-Funding Long-Term Care is Challenging
When a person suggests self-funding, they mean they are using their own money. When you self-fund your long-term care expenses, the money won't be available for lifestyle or legacy.
Many experts I spoke with say when a person tells them they plan on self-funding, what they really mean is they don't think they will ever need care in the first place. Despite the facts and common sense regarding the financial costs and burdens of aging, some people are just in denial. The consequences can be tremendous on family and finances.
The recent virus crisis created an unexpected panic sell-off. The losses were fast and furious. Since you will never be able to time these unexpected events which cause market losses, or know when a recession will hit, it makes self-funding a bit of a gamble.
Market Corrections Often Come Without Warning
"If there is anything we have learned over the last several decades is stock market corrections occur quickly and without much warning."Brent Donarski, a leading expert on long-term care planning and owner of a national agency My LTC Specialist.
"These unexpected events create a real unpredictable challenge for those considering self-funding the actual cost of long-term care. With short-term interest rates near zero and a market in bear territory, a well-intentioned self-funding plan won't work, especially if your need for extended care occurs during one of these events."Brent Donarski
You will never know at what point you will need long-term care. People require care for many reasons; often, you have little or advance notice. An illness, accident, or just the impact of getting older are all reasons we need care.
For example, one of the biggest reasons older people require long-term care is due to falls. You won't predict a fall. Cognitive decline can sometimes come on fast. Trying to time these events so you can self-fund is just not realistic.
If you, or most likely, your family, are forced to sell off assets to pay for your future care, it might be during one of these market downturns. The selling of assets would be at a loss. That loss still could be a taxable gain. You get hit twice. Not only are you using your money, but it is costing you more due to bad timing which is out of your control.
Will Your Family Make the Same Care Decisions as You Would?
The other question to ask is, would your family make the same decisions you would otherwise make for yourself. Will they spend your money on the care you prefer? Will they make decisions based on financial considerations or quality of care?
Sometimes family members will attempt to become caregivers. Being a caregiver is stressful and places tremendous burdens on both the caregiver and the caregiver's family. Allowing a family member to be a caregiver is not a good solution.
Many experts say the virus crisis is an excellent example of why affordable Long-Term Care Insurance is a better solution. The guaranteed tax-free benefits from one of these policies will give you access to your choice of quality care either in your home or in a facility.
Long-Term Care Insurance Provides Guaranteed Benefits
With a Long-Term Care policy in place, you will never worry about market timing. You will never be dependent on loved ones to make decisions or provide care for you. Your family will have the time to be family as you maintain control and independence.
Premiums are based in part by your age at the time of application, your health, family history, and other factors, including the amount of benefits you purchase. Long-Term Care Insurance is custom designed, so you get to decide how much help you wish to have in place.
Plus, premiums vary dramatically for the same benefits. You could pay well over double the premium. This is where an experienced Long-Term Care Insurance specialist comes into play. There are several options available to make getting older easier on those you love.
“Today planning for your future care needs has never been easier and with great options. Planning ahead with a predictable guaranteed benefit plan is something all pre-retirees need to seriously consider.”Brent Donarski
Specialist Offers Accurate Quotes and Professional Recommendations
Donarski says to be sure to seek the help of a real specialist. Most insurance agents and financial advisors have little or no experience in this area. They will cost you money and perhaps make significant errors in coverage options.
Use a qualified and trusted Long-Term Care Insurance specialist to help you shop and find the right company based on your situation. A specialist will provide accurate quotes and give you professional recommendations. Insurance premiums are regulated. You can you the expertise of a specialist to find the right options for you and your family.
Find a trusted specialist by clicking here.
LTC NEWS Provides Exceptional Resources
LTC NEWS has an outstanding comprehensive Long-Term Care Insurance Guide. Take a few minutes and review it by clicking here. https://www.ltcnews.com/resources/guides/the-ultimate-long-term-care-insurance-guide
Forty-five states offer special Partnership Long-Term Care Insurance policies with dollar-for-dollar asset protection. See if your states offer such a program along with potential tax incentives by clicking here.
Don't wait until the next crisis or after your health starts to fail to start planning. The best time to plan is in your 40s or 50s when you still enjoy good health and much lower premiums.
About the Author
Linda is a freelance writer interested in retirement planning, health and aging.
Contributor since October 31st, 2017
Long-Term Care Insurance is custom designed. You get to decide the total amount of coverage. Even a small policy can reduce the stress and burden on your family. Plus, premiums can vary dramatically when you compare different insurance companies for the exact same coverage. In addition, the underwriting criteria is different with each insurance company.
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