50% Will Be Stuck With a $324k Bill: Will you be the one?

According to the AARP Public Policy Institute, 53% of women and 47% of men will need long-term care in their lifetimes.

Women need care longer (3.7 years) than men (2.2 years).

Average care costs are $9,000/month.

Assuming we average out the care for both sexes, 3 years is fair to accept for calculating potential cost.

36 months x $9,000 = $324,000

This is a generic scenario, a diagnosis such as dementia which requires a more specialized level of care, averages $357,000 in lifetime costs.

If Bankrate’s statement regarding the median household wealth for adults in their 60s is $221,200 is accurate, Americans without a Long Term Care Plan could be faced with a considerable shortfall.

Expenses for things like in-home care, assisted living, and nursing facilities are associated with special care needed for many aging Americans and the cost of care continues to rise each year.

Long-Term Care is usually necessary when someone can’t perform at least 2 of the 6 Daily Living Activities (Bathing, Eating, Dressing, Transfering, Toileting, Continence).

LIMRA, a leading insurance and marketing research company estimates that less than 5 percent of adults over 50 have a long-term care insurance policy, while 70% of adults over 65 will need long-term care.

The reasons people don’t carry coverage or make plans are:

• Financial Miscalculation…underestimating how much they’ll need
• Some believe the odds of needing long-term care are low
• Incorrectly assume that Medicare and Medigap coverage will pay for it (Medicare pays a MAXIMUM of 100 days in a skilled nursing facility) then it’s up to the individual.
• The coverage may be unaffordable or other expenses are more immediate

Regarding the stage when care would be paid for, is called Medicaid and in many states, they have bylaws stipulating someone’s entire net worth is less than $2,500. They want to make sure you’ve already run through all available resources first and are destitute.

So much for leaving anything behind.

However, just as retirement planning is not meant to be cookie-cutter, having a traditional long-term insurance plan that one pays a separate premium for is the right call for every person, at least having a plan (how will I pay) is a very wise idea.

As an alternative, some financial (not insurance) tools offer special income riders that trigger if the account holder needs long-term care, for however long is needed, and goes back to normal if their condition improves and no longer requires it.

Last but not least, if you’re not going to buy a plan or use special lifetime income annuities, there’s always cash. They say cash is king. Using all accounts combined, remember to earmark roughly $350K per partner from your portfolio if you plan on paying out of pocket as the safety cushion for paying for LTC and not eroding the rest of the nest egg!

Whichever you choose, I hope you choose one, best of luck to you. Hopefully, everyone reading is one of the lucky ones who will never need it, but it sure does help to know there’s a plan in case you do.

If you are over 50, I would encourage you to see what a lifetime annuity can do for you to solve that problem. I’m happy to chat one-on-one about particular options available. If that sounds like you, well, reach out via responding to this newsletter, set an appointment on my calendly, drop me an email, or shoot me a text. I’m not a hard person to reach.

Be well,

Chris Kaden

Owner?I?Retirement Income Optimizer?I?Kaden Prosperity Protectors?I?Powered by?FINLine Financial

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