Health-Care Costs Becoming Bigger Part of Retirement Planning

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.