Will your retirement savings survive longevity and long-term care?


At 40, you should have the resources for your future retirement. Planning for a successful future retirement takes some effort. It would be best if you used your employer’s 401 (k) option. If your employer doesn’t offer a 401 (k), 403 (b), or defined retirement program, you should make an effort to save money in an IRA. If you are self-employed, you must open a SEP account. However, planning does not end with saving money.

What happens when your health changes due to prolonged illness, an accident, or simply the impact of aging? As we age, these health risks increase dramatically. Will your retirement plan survive longevity?

Retirement planning for long term care has become a top priority for many Gen Xers and Baby Boomers. Many people between the ages of 40 and 70 have personally faced the impact of long-term health care with a parent or loved one.

The problem is, too many people forget to protect those retirement funds from the high costs of long-term care. The costs and financial burdens that come with aging will impact you, your family, your savings, and your lifestyle.

You will experience changes in your health, body, and mind, which will increase your need for long-term health care. Caregiving is a challenge for your family. Relying on your children to be babysitters is not a good plan. They have or will have their own careers, families and responsibilities. It’s not that they don’t like you, but having a son, daughter, or in-laws as a caregiver is stressful. It can also impact their health and career.

Spouses are also not a good option for caregiving. As they get older, they will too. They will also have their own health and age issues to deal with.

Paid care drains your assets and negatively impacts your income and lifestyle. According to the LTC NEWS Cost of Care Calculator (www.ltcnews.com), the cost of long-term care services and supports continues to rise. Even a large nest egg can be affected.

The current national average cost of home care, based on a 44-hour week, is almost $ 4,500 per month. Basic assisted living costs start at $ 4,300 per month plus supplements depending on your needs. Skilled nursing home care costs an average of $ 8,900 per month, or over $ 100,000 per year. The cost of long-term care services increases over time.

Many people mistakenly assume that Medicare will pay for all long term care needs in the future. Health insurance, medicare, and supplements only pay for a limited number of qualified services – and only if you get better. These insurance options do not cover the costs of child care, which helps with activities of daily living. However, most people need child care as they get older.

Although most long-term care occurs when we are older, people of all ages need long-term care. Premature dementia, including Alzheimer’s disease, the most well-known form of dementia, can occur even in your 30s. Parkinson’s disease, multiple sclerosis, and even stroke occur at a younger age.

It is your good health today that gives you the ability to plan ahead.

Medicaid, the medical protection program, can pay for long-term care, but you must be poor or end up poor. For most people, this is something you want to avoid.

The point is, the financial costs and the burden of aging will impact your savings and your family. Affordable long-term care insurance protects your belongings and eases the burden that would otherwise be placed on your family.

While some think long term care insurance is expensive, it is actually very affordable for most people, especially if you are planning ahead of retirement. Premiums can vary by more than 100% between insurance companies.

If you are healthy enough, these policies can easily fit most people’s budgets. The problem is, too many people are looking for a financial advisor or general insurance agent with little knowledge in this area. They often make recommendations that are too broad or sometimes too small. In addition, many of these professionals only work with one or two insurance companies. Because they don’t fully understand how policies are used at the time of claim, their recommendations aren’t what you might actually need.

In addition, 45 states have long-term care partnership policies, which provide additional asset protection dollar for dollar.

There are several types of policies that are available in most states. These include traditional plans, partnership plans that offer additional asset protection, single premium “hybrid” plans, which also offer a death benefit, and short-term plans that offer conditions of death. broader age and health.

The key is to work with a long term care insurance specialist who works with the major insurance companies. I always ask lots of detailed questions to design an appropriate plan based on the client’s specific concerns and budget.

The cost of long term care services varies from place to place. Most claims start with home care, and many people avoid a nursing home altogether because they are receiving the proper attention at home or in an assisted living facility. These costs are much lower than those for skilled services in a nursing home.

Long-term care insurance will provide benefits at home, in adult day care centers, assisted living facilities, memory care and in traditional specialized retirement homes. With most policies, you and your family decide how you use your benefits.

Does long term care insurance work? Absolutely. In 2020, major insurance companies paid out more than $ 11.6 billion in benefits to American families. These families would otherwise have had to deplete their own assets to pay for care, have family members become caregivers, or both.

Since the policies are tailor-made, you decide what is important to you. The key is to plan before retirement. Long term care insurance is not sexy. It doesn’t shine like a new car or a new gem. You might not show your policy at a party. However, it will give you and your family peace of mind.

Working with a long-term care specialist will give you the exact information you are looking for. Start your research in your 40s and 50s when you have the most affordable options.

The point is, long term care insurance is easy, affordable, and provides stable income and asset protection.

Source by Matt McCann

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