A Retirement Plan With No Holes: The Importance of Long-Term Planning

 In Estate Planning

You may have a retirement plan, but is there a gaping hole in your plan – one that threatens to unravel the whole thing?  That gaping hole may be long-term care planning. If you haven’t given it much thought, consider the following facts the U.S. News and World Report published this year:

  • Who is prepared?
    • Less than 1 in 4 people think they’ll have the financial resources to pay for long-term care if the need ever arose, and yet, only 1 in 5 have even discussed long term care with a financial advisor
    • A mere 17% of people report owning long-term care insurance
  • What are the potential costs?
    • The national average for one-bedroom assisted living facility costs $51,000; for a nursing home that number nearly doubles at $97,000.
    • The national average for in-home care is $22/hour for a home health aide and $80/hour for a registered nurse.
  • How are the costs paid for?
    • For people with retirement accounts, the balance for those nearing retirement averages about $104,000
    • Most financial advisors estimate that for those unprepared for long-term care, retirement savings will be depleted 2 to 3 times faster than planned

Hopefully you are now convinced (if you weren’t already), that long-term care is indeed important.  So what next?  Here some ideas to get you started:

Take a hard look at the numbers:  What do you have saved?  What might care cost?  What sources of funding will you have to work with?

Look into long-term care insurance:  The sooner the better; the older you get, the higher the cost.

Alternative care:  Have a family discussion and consider whether family members may provide alternatives to paid care for each other.

Educate yourself on government benefits:  Have a good idea what will be covered by Medicare, Medicaid and private health insurance.

Talk with your financial advisor: Your financial advisor will be able to help you navigate the myriad of options at your disposal – whether long-term care insurance, annuities or other combination products – and recommend the best “no-holes” retirement plan.

No matter what your age or stage of life, remember that it’s never too early or too late to come up with a financial plan for long-term care – your options may vary, and some will be better than others, but any plan will be better than no plan at all.

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