Congrats you’ve retired. Did you forget something?
Introducing our Four Part Series on Long Term Care
Way to go! You’ve just retired and you have all your ducks in row.
You’ve said goodbye to your fellow co-workers, completed your retirement forms, called your travel agent about that river cruise and met with you financial advisor to review your portfolio. You are good to go!
Year 1 of retirement is going to be great!
But wait a minute, didn’t you forget something? Did you talk with your advisor about one of your biggest risks in retirement? A risk that could literally wipe out your retirement savings?
We aren’t talking about the stock market, we are talking about needing Long-term care? Or should I say, the high probability of having to pay for Long-term Care?
The facts are simple. 70% of people age 65 right now will need some form of Long Term Care.*
The facts are expensive: The cost of long term care is staggering. A semi private room (you get a roommate) where I live in Michigan is almost$ 7,000.00 a month.** Right now.
That’s not me, the insurance company nor “Joe the insurance salesman” scaring you in to something you don’t need. That statistic comes directly from the U.S. Department of Health and Human Services.
Also, before some of you accuse the government of raising an uproar and scaring people to coerce them into buying one of those government run insurance programs that pay for long term care let me, let you in on a little secret. That tax payer ‘LTC program’ doesn’t exist. You are on your own.
The only thing that remotely looks like this is Medicaid. In order to qualify for benefits you need to spend down almost all of assets first, and only will then will they step in. Yes, all those years of hard earned savings must be spent first. That hurts.
If you knew of ‘something’ that had a 70% chance of occurring, and that ‘something’ was going to cost a ton of money and possibly eradicate your retirement savings wouldn’t you plan for it in some meaningful way?
Wouldn’t you at least try to determine if your retirement plans would survive that 70% chance event—even if it simply meant setting extra money aside?
Planning for Long Term Care is often overlooked by both clients and by financial advisers to potentially disastrous results. As in most facets of sound financial and life planning, starting and planning earlier is better. The sad fact is that taking care of a love one in a nursing home is both personally tough on families and financially stressful. I’ve head clients lament about how they only wished that had addresses the situation sooner.
The purpose of our series to shed light and explain in plain English many of the issues and strategies surrounding long term care so that you the reader can make feel comfortable to take on this challenge and make an informed decisions as to the best course of action.
Meanwhile, enjoy cruise, we’ll talk when you get back.
Stay tuned for out next article. ‘What is Long Term Care anyway?’