By Joe Globensky, RFC®
November is Long-Term Care Insurance Awareness Month and I want to share some of the key reasons why having a plan could mean a world of difference to you and your family should you ever experience a long-term care event.
Let’s Look at the Statistics
According to the U.S. Department of Health & Human Services, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services in their remaining years. And while about one-third of today’s 65-year-olds may never need long-term care support, 20% will need it for longer than 5 years.
We all hope to be in that one-third that may never need care, but do you really want to risk your financial future, or your family’s physical, financial, emotional, and psychological future on those kinds of odds?
Long-Term Care Impact #1 – Financial
If you’re like me, and most of the working population for that matter, at some point in our lives we have thought about what retirement will be like. What we will do, where we will go, and if we can afford it. We may have even calculated what our intended travel might cost, or maybe a new retirement lifestyle. Rarely have plans been made for the potential effect a long-term care event could have on the savings we’ve accumulated for retirement.
In 2018, the national average monthly cost for a home health aide is $4,195; for an assisted living facility it is $4,000; and for a private room in a nursing home it is $8,365.1 This is a large expense that can quickly deplete your retirement nest egg and impact the quality of life for you, your spouse, and possibly your family.
Long-Term Care Impact #2 – Independence
If we need long-term care, most of us would prefer to stay in our own home for as long as possible. We want to watch our TV, sleep in our own bed, and do things on our schedule. But if we haven’t planned well, our options may be limited by our resources, as well as the ability of others to help. By planning for a potential long-term care event, we may be able to expand the options available for care, including in our home or at community-based facilities that allow us to live a more independent life.
Long-Term Care Impact #3 – Loved Ones
In many families, a spouse or younger family member is the default caregiver when a long-term care event occurs. And most default caregivers don’t give it a second thought, at least at the time the event occurs. But as the need for care extends into weeks, months, or years, it can take a dramatic toll on caregivers. It can lead to more stress, missing work or family events, and resentment. It can also have a financial impact on the caregiver and their family.
Long-term care planning can provide a way to lessen emotional and financial stress and involve your loved ones in the decision making. This can ease some of the burden that inevitably comes with a long-term care event.
Why We Procrastinate
“It’s never going to happen to me.” “I’ll take care of that later.” “We don’t have the money right now.” “We’ll deal with it when it happens.” Sound familiar? There are many other things we would rather do than address this topic.
It may not be a fun conversation but planning for a long-term care event doesn’t have to be unpleasant. By leveraging the experience of a well-trained financial advisor, you can develop an affordable and effective way of easing the burden on you and your family.
There have been significant developments in the long-term care insurance industry including new products, more accurate pricing, and additional flexibility that can help you construct a plan specific to your needs and wants. At Connections Financial Advisors, it costs nothing to start the conversation. We just want to make sure you understand the potential need, have researched the available solutions, and are comfortable with the plan you have in place.
To schedule a meeting or phone call with one of our advisors, you can call our office at (217) 605-8130 or find a time convenient for you on our calendar.
1 Genworth Cost of Care Survey 2018