Are You Really Prepared for the Financial Risks of Retirement?

The so-called 'golden' years may be golden, but not for us; it seems everyone has their hand out needing money. A retirement plan without considering longevity and long-term care will be a plan that fails you and your family. Are you prepared?

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Are You Really Prepared for the Financial Risks of Retirement?
7 Min Read August 17th, 2021

We have seen long-term care in the news throughout the COVID-19 virus crisis. It was eye-opening to see the conditions of some nursing homes. It was sad to see loved ones separated from their family members because of the virus crisis.

Many families removed loved ones from long-term care facilities, even good ones, due to the fear of COVID-19. These family caregivers quickly saw the difficulties of juggling caregiving with their careers and other family responsibilities. 

We saw the stories on the news. We heard from family members on talk radio. It was impossible to ignore the significance that long-term care has on American families and their finances. 

Few of us want to put this burden of caregiving on our families in the years ahead. Family caregivers must deal with physical and emotional demands in their role as a caregiver for a parent.  

Thinking About Retirement? Thinking About Aging?

Over the years, I have had clients admit that they could not focus on long-term care and retirement planning because it was scary. It is natural to fear the unknown. Most of us know the facts. We all get older and face declining health in our so-called 'golden years.' At the same time, we face longer lifespans, and that takes more money. Longevity requires planning.

Hopefully, if you are at least 40 years old, you have done more than think about your future retirement. Retirement is not easy. You must have enough money saved to say goodbye to your job. 

The COVID-19 virus crisis has paralyzed some people from doing anything. There are people, maybe yourself, that are fearful of making any plan. You cannot make decisions as you fear it is the 'wrong time.' Some people have stopped contributing to their employer's 401(k) plan or other savings.

If you feel this way, you are not alone. Yet, every day, you get a day older. Are you any wiser? The saying, "those who fail to plan - plan to fail," comes to mind.

Even if you are doing everything you need to do to prepare for a successful future retirement, the question remains - have you built a wall around those assets?

There are several unknowns. You can't time the market. The market has ups and downs. The key is to think long-term and make regular contributions to retirement accounts. 

Long-Term Care – Part of Retirement Planning

What about long-term health care? Your health, body, and mind will change as you get older. Just compare your current 'self' with your 'self' at age 25. Now, imagine the changes in the next 20+ years.

Many of these changes increase your risk of needing help with daily activities or even supervision due to memory loss. Aging happens. Are you prepared for the costs and burdens of longevity? Extended health care costs money. 

Long-term health care is a huge cash flow issue. However, long-term care also becomes a family issue. Even if one of your children would have the time to be a caregiver, the role of caregiving changes the relationship.

Are you planning or planning to fail? The problem is too many people, maybe yourself at the moment, forget to or ignore protecting those retirement funds from the high costs of long-term care.

Good Chance You May Need Care in the Future

A new study shows that an average healthy 65-year-old couple has a 75% probability of one partner requiring a significant level of long-term health care during their lifetime. 

There are so many statistics. Perhaps the most important one is this one - long-term care will either happen - or it won't. When you are faced with long-term health care, where will the money come from? Which account would be liquidated first? How would take affect lifestyle and legacy? Which one of your kids - or their spouses - will make the decisions? Will one of them become your caregiver? If they become a caregiver, how will the role of being a caregiver impact their life, their career, their health, and their family?

So many questions. Have you asked the questions? Have you tried to answer the questions?

LTC Costs Increasing Due to Higher Demand

Long-term health care costs are not cheap but don't expect health insurance, including Medicare and supplements, to pay for these costs. Medicaid will pay for long-term care services, but you must have little or no assets. Your family? Family caregivers face a tremendous amount of physical and emotional stress and anxiety. Unpaid family caregivers number 53 million Americans and find it difficult to juggle their jobs and families with their roles as mom or dad's caregivers.

Paid professional in-home care is preferred over nursing homes and other long-term care facilities. You can find quality care but at a cost. The LTC NEWS Cost of Care Calculator says the national average cost of long-term care in a nursing home is over $100,000 a year. In-home care, adult day care, assisted living, and memory care can cost less, but none of it is cheap.

The cost of care does vary depending on where you live. For example, the cost of all long-term health care in New York is much more expensive than in Texas. The cost of care increases every year so that the current expensive cost will be even more staggering in twenty-five years. 

How long will your savings last if you must pay for care yourself? Even if you have millions, you can still feel the pain. Your family will feel the pain and emotion as well.

LTC Insurance Works

The solution many American families are turning to is affordable Long-Term Care Insurance. These policies are already helping families keep their loved one at home. In 2020 the top companies paid over $11.6 billion in benefits from Long-Term Care Insurance. 

You may have read that Long-Term Care Insurance is expensive or has many premium increases. The truth is that the policies are very affordable for most families and are custom designed to fit your needs. However, premiums do vary over 100% between insurance companies. 

There are several types of policies available for consumers to consider:

  1. Traditional Long-Term Care Insurance - This is the type of plan that most people select, and you get the most benefit at the best value. In 45 states, Partnership Long-Term Care Insurance offers dollar-for-dollar asset protection. 
  2. Asset-Based or 'hybrid' policies - These plans are life insurance or annuities with a rider for long-term care. You get both a death benefit and a long-term care benefit. You will pay more, but you are guaranteed to get the money one way or the other.
  3. Short-term or limited duration plans - These types of plans are not available in every state, but they offer a limited amount of benefit with broader underwriting health rules. 

Every company has its own underwriting criteria and price points. The best advice is to start planning before you retire, ideally in your 40s or 50s when your general health is still reasonably good and you can enjoy lower premiums.

Plan for the Challenges of Longevity 

Don't ignore the challenges that come with getting older. You can give your loved ones the time to be family instead of caregivers. You can safeguard income and assets as you obtain access to your choice of quality care.

It is probably fair to say that few people get 'excited' about buying insurance. However, with a long-term care solution, you are buying peace of mind. You are buying a plan so your loved ones have the time to be family and not caregivers. 

Once my clients get their policy in the mail, they usually say thank you. The onus of future long-term health care, costs, and family burden is lifted from them and their families. Now, they can go worry about something else.

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About the Author

Matt McCann is a nationally known expert on Long-Term Care planning and assists people nationwide using his unique process where they speak with him on the phone while seeing his computer screen on their computer. With 20 years of experience, he works with all the major companies in Long-Term Care.

LTC News Contributor Matt McCann

Matt McCann

Contributor since May 5th, 2020

Editor's Note

No matter how well we stay active and take care of our health, we can't avoid aging. Aging happens, and the results have consequences on our families and finances. 

Many of us will need help with daily living activities or supervision as we experience dementia. You cannot avoid getting older, but you can prepare your family and finances for the costs and burdens that come with longevity.

Affordable Long-Term Care Insurance will give you access to your choice of quality care options, including in-home care. Your loved ones will have more time to be family instead of having to be caregivers. You will not be forced to drain your income and assets to pay for professional care; rather, you will have guaranteed tax-free benefits so you can afford quality care of your choice. 

Planning Resources on LTC NEWS

There are many resources available on LTC NEWS to assist you in your research.

Understanding the financial impact long-term care has on your family and finances is vital for retirement planning. The cost of long-term health care varies depending on where you live.

The LTC NEWS Cost of Care Calculator shows you the current and future care costs where you reside. The calculator can help you plan for your future care or help you determine the costs for a loved one who needs care right now.

Start your research by reading The Ultimate Long-Term Care Guide

Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.

You can compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.

Find a Trusted, Licensed and Qualified LTC Specialist

Be sure to seek the right type of professional help. Premiums can vary by over 100% between insurance companies, so a skilled and trusted professional can help you navigate the many companies and options.

A qualified Long-Term Care Insurance specialist will help you obtain the best coverage at the best value. Discover a licensed and trusted pro to assist you and your family - Work With a Specialist | LTC News.

LTC NEWS - An Advertising and Marketing Partner

LTC NEWS offers many marketing and advertising opportunities, including sponsored content and sponsorship of critical areas of the website. These marketing opportunities are ideal for businesses, including, but not limited to:

  • lawyers
  • financial advisors
  • home health agencies
  • assisted living facilities
  • adult day care centers
  • rehab facilities
  • memory care facilities
  • senior living centers
  • nursing homes
  • real estate professionals

LTC NEWS is a great option if your business wants to reach decision-makers researching care options for a parent or loved one.

Drive traffic to your website and find the people interested in your products and services by using LTC NEWS. Plus, you can improve your website's SEO so more consumers can find you when they search for your services.

Learn more about how LTC NEWS can help you market your business, drive traffic, and improve SEO - Advertise With Us | LTC News.

Become a Guest Contributor for LTC NEWS

You can improve your website or blog's SEO and gain exposure and traffic at the same time by being a contributor to LTC NEWS.

Just write a story or ongoing column for LTC NEWS. Stay on topic with articles on health, aging, caregiving, retirement planning, long-term care, and other topics that interest adults over age 40. 

You can even promote yourself, your business, and your website or blog. However, it must have editorial content exclusive for LTC NEWS and cannot be just an advertisement. It can include links to other sites, and you can share the article link once published on your website or social media.

Email your story idea or article: newsroom@ltcnews.com - LTC News Contributors | LTC News

Reverse Mortgages Can Be Part of a Plan

If most of your assets are tied up in your home, today's reverse mortgages might help as the solution for either funding Long-Term Care Insurance or paying for care - Reverse Mortgages | LTC News.

Need Care Now? Need Help with LTC Insurance Claims?

You might have a parent or other family member who needs care now. If they have a Long-Term Care Insurance policy, be sure they use it. Get free assistance in making a claim. 

LTC NEWS provides free assistance with no obligation - Filing a Long-Term Care Insurance Claim | LTC News. You can also help find caregivers and get recommendations for a proper care plan, whether a person has a policy or not.

Share News with LTC NEWS

Include LTC NEWS in your press release distribution. If your group, organization, business, political committee, etc., have news to share, send it to LTC NEWS. Email - newsroom@ltcnews.com 

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