The New Face of Long Term Care
How are you planning to retire? What are you planing to retire on, and how are you accomplishing your goals? What are you planning to do when you or your spouse can no longer take care of your basic needs? We Americans typically fall into 5 categories when it comes to how we choose to plan for retirement. These categories are:
Social Security
Pension Plan
Children
Work Until You Die
Ourselves
Surprising? Do you disagree with some of those options? Social Security is the most obvious source, and, as we are all discovering, not the most reliable. Pension Plans are also a popular and seemingly trustworthy source of retirement savings, but fewer and fewer employers are offering them. Depending on children for retirement savings is a more popular tactic than many may assume. Many people feel that it is their children’s responsibility to take care of them when they can no longer work. What these individuals fail to plan for is their children’s possibly unwillingness or inability to provide for them in their old age. Culture has changed, and planning to rely on your children for your retirement is a gamble, at best. The “work until you die” option is the one that is most often overlooked. This is a fate that most people assume will never befall them. Yet plenty of Americans reach retirement with the assumption that their savings will enable them to live a comfortable lifestyle, when in fact their pension or 401K barely provides for their basic needs. This is possibly the most unfortunate situation of all. It is easy to forget that the elderly people we see every day working service jobs in the convenience store or at the local diner are often those who thought they had planned for retirement, and found out too late that they hadn’t planned well enough. The only way to ensure that we have adequate funds for our retirement and long term care needs is to rely on ourselves. We have to educate ourselves on all of the options available, and be vigilant in keeping up with the changing financial landscape that contributes to the success of our retirement plan. Long term care comprises a great part of many American’s retirement plans. Long term care is an essential expense, but 4 out of 5 Americans underestimate the cost of it by 50% or more*. What’s the answer? Long term care insurance has been the answer for many years. But like many financial practices, the face of long term care is changing. The primary use of life insurance is, of course, to provide a death benefit to the policy holder. But we forget that life insurance can offer living benefits that can help provide us and our families great financial comfort and an added measure of protection when the realities of age set in. Living benefits can also be called advanced death benefits. Under either name, these types of benefits are available to the insured when any two of the six Activities of Daily Living can o longer bet performed without assistance. Six Activities of Daily Living
Bathing
Continence
Dressing
Eating
Toileting
Transferring
When any two of these activities can no longer be performed, the insured is entitled to begin collecting on their living benefits. Life insurance used as a long term care plan it is often less expensive than long term care insurance. Especially for spouses, the living benefits provided by life insurance are essential to ensuring that the long term care needed by one spouse does not drain the savings needed for the other spouse’s daily living. Life insurance also guarantees that the families of the insured will still be able to collect on the death benefits of the policy when the insured passes away. Retirement is a complicated issue and an essential element in any wealth management strategy. Advantage Gold Partners encourages you not only to be invested in your understanding of your own finances, but in the options available to you at any given time and how those options impact you. The changing face of finance can impact every facet of your financial future. It is up to you whether that impact is positive or negative for you and your legacy. *Genworth cost of care study 2016 https://www.genworth.com/about-us/industry-expertise/cost-of-care.html *Forbes https://www.forbes.com/sites/nextavenue/2016/05/10/americans-estimates-of-long-term-care-costs-are-wildly-off/#6082e0005180
