Health-Care Costs Becoming Bigger Part of Retirement Planning
With increased longevity, the impact of health care costs become a bigger factor in your retirement planning. Preparing your family and finances for long-term care costs needs to happen before retirement.
With increased longevity, the impact of health care costs become a more significant factor in your retirement planning. The rising cost of prescription drugs and long-term care services and supports are two items many people don't think about before they retire. Yet these costs will have a dramatic impact on your savings and lifestyle once you do retire.
Unexpected events like 9/11, the 2008 mortgage and banking crisis and the virus crisis create market losses. As we have seen with COVID-19, a good economy can be adversely impacted by something unexpected.
If your need for long-term health care happens during one of these downturns, your family will be forced to sell off your savings, at a loss, to pay for your care. Preparing your family and finances in advance will not only provide you with income and asset protection, but it will reduce the stress otherwise placed on your family.
Health Savings Accounts Key Planning Benefit
Many professionals suggest putting money in Health Savings Accounts if their employer offers a health insurance option that includes an HSA. This is money you can use now, on a pre-tax basis, to pay for insurance deductibles and Long-Term Care Insurance premiums. Once you are 65, you keep the money, growing tax-deferred, which can be used for health-related expenses tax-free.
Long-Term Care insurance can help retirees avoid dependence on relatives. Often family members become caregivers in the absence of any advance plan. This creates a tremendous burden on them and their families. Once the family is no longer able to provide care, the cost of long-term care, either at home or in a facility, is expensive and creates a massive impact on the lifestyle of the other spouse.
"Long-Term Care insurance can address one of the biggest worries retirees have: being able to manage a long-term illness or disability without becoming dependent on their children," said Kimberly Foss, founder of Empyrion Wealth Management.
Prepare for Future Long-Term Care Before You Retire
The financial costs and burdens of aging should be addressed, ideally in your 40s or 50s, before you retire, so you can enjoy a successful retirement. The best time to get Long-Term Care Insurance is before you retire.
Several affordable options will fit your budget. There are health requirements you must meet to qualify to obtain a policy. Each insurance company has different underwriting standards. A specialist in long-term care planning can design an appropriate plan and shop from the top companies to find you the best coverage at the best value depending on your age and health.
Affordable LTC Policy Pays for All Types of Care
LTC insurance will pay for care at home, adult day care, assisted living memory care, and nursing home care. Tax benefits are available for some people as well. In most states, partnership plans are available, which provide additional dollar-for-dollar asset protection.
The risk of you needing some type of long-term care service is high and increases as you get older. You can control other factors in the world that could dramatically impact your family and finances. It is best to expect the unexpected and enjoy the guaranteed tax-free benefits of affordable Long-Term Care Insurance.
About the Author
An LTC News author focusing on long-term care and aging.
James Kelly
Contributor since August 21st, 2017
Editor's Note
One of the questions often asked about Long-Term Care Insurance is whether making a claim and receiving benefits is difficult. Most Long-Term Care Insurance claims are paid without issue.
Long-Term Care Insurance pays billions in benefits to policyholders helping them access quality care, including at home, and reducing the stress and burden otherwise placed on family members.
LTC NEWS has teamed up with Amada Senior Care to provide you with quality in-home care options, including free - no cost or obligation Long-Term Care Insurance claims processing and case management
If a loved one needs in-home care, whether they have LTC Insurance or not, Amada may be your choice for quality care options.
LTC NEWS has these comprehensive guides to help you in your process of finding care for a loved one now:
- Finding Quality In-Home Care
- Adult Day Care Centers (ADCCs)
- Assisted Living and Memory Care Facilities
- Finding a Quality Nursing Home
Find Professional Help in Obtaining Your LTC Policy
LTC Insurance is custom-designed, but premiums vary dramatically between insurance companies. Every insurance company must file its products and pricing with the state's insurance department before being offered to consumers. What that means is no insurance agent or agency can offer special deals.
Seeking professional help is vital when shopping for Long-Term Care Insurance. There are not many Long-Term Care Insurance specialists who work with the top companies and have a complete understanding of underwriting, policy design, pricing, claims, partnership, and other important aspects of LTC Insurance.
Look for some of these factors in finding an LTC Insurance specialist:
- An LTC Specialist will usually have helped at least 100 people or more with LTC Insurance. Be sure to ask; some specialists have helped thousands nationwide.
- An LTC Specialist will typically work with most of the major insurance companies offering these products, not just one or two.
- An LTC Specialist typically has years or more of experience and holds a Certified in Long-Term Care® designation (CLTC®).
- An LTC Specialist will understand the current and future cost of long-term health care and how most care is delivered so they can make professional recommendations without "over-insuring" the individual.
- An LTC Specialist will offer all types of long-term care solutions, including traditional (including Partnership plans), asset-based "hybrid" policies, and short-term cash indemnity policies.
- An LTC Specialist will know the underwriting rules with all the major insurance companies so they can match your age, health, family history, and other factors to provide you with accurate quotes.
- An LTC Specialist will typically have firsthand experience helping a client's family in the claim process.
Most people obtain coverage in their 40s and 50s.
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