Demographic Reality and The Mandatory Nature of Long-Term Care Planning.....

If you're a member of the advisory community and don't know when or how to introduce Long-Term Care (LTC) Planning to clients, then you are part of the problem. ?Why?? First, because the demographics are undeniable.? And second, because, throughout an American's working years, they are paying for, even planning for, Healthcare In Retirement through Medicare tax withholding.? Yet, while very few realize that LTC – some of the most expensive care they will need – is not covered by Medicare or health insurance, most of the advisory community avoids explaining this fundamental reality or the need for appropriate planning.? Financial planners, investment advisors, tax professionals, attorneys, etc., across the advisory community espouse the benefits and utility of their expertise.? At the same time, fewer than 20% of Americans have addressed this coverage gap or have any PLANNING in place for LTC.?

There is no shortage of excuses for leaving millions vulnerable to the physical, emotional, and financial toll of future LTC needs, but the advisory community's failure to address this topic for more than 80% of Americans cannot be justified.

The Integration of Long-Term Care Planning

Long-Term Care Planning is not an optional add-on to your work with/for clients; it's an essential component of a broader comprehensive advisory theme. ?PLANNING for LTC involves decision-making that incorporates:

• Family dynamics and personal preferences of potential scenarios that may arise as clients age and there is a need for LTC.
• Accounting for the how, where, when, and who of providing or funding that care, with the crucial distinction that planning for care is not the same as paying for care.
• Discussing the potential impact on family and loved ones and strategies to avoid conflict and resentment.
• A written document to memorialize decisions ,

While insurance can be a valuable LTC Planning tool, it is just a product or funding mechanism.? LTC PLANNING does not require insurance, and the focus should be on creating a plan that aligns with the client's values and goals, regardless of whether insurance is part of the equation.

The Risk of Aging: A Critical Blind Spot for The Advisory Community

The "Risk of Aging" is one of the most significant yet often overlooked risks in financial planning, even though the advisory community excels at managing risk for areas like investment management, tax planning, and retirement income strategies.? Unfortunately, those same professionals fail to prioritize or entirely ignore the reality that aging can bring unforeseen challenges and how this blind spot is detrimental to clients' long-term security.

The Risk of Aging encompasses more than just financial implications; it includes the physical, emotional, and psychological toll that aging and the need for LTC can take on individuals and their families. ?Those in the advisory community must extend beyond their core competencies to address this reality to maintain fiduciary duties, best interest standards, CFP Code of Ethics and Standards of Conduct , etc. ?The Risk of Aging is no different than market risk, interest rate risk, inflation risk, or any other critical risk factor that can significantly impact a client's financial well-being.? Failing to address the Risk of Aging makes clients vulnerable and undermines advisory relationships.

When Should Long-Term Care Planning Be Introduced?

The answer is simple: sooner rather than later because there are only four ways to receive or pay for LTC: Family and friends, Medicaid, Self-Funding, or risk mitigation using insurance. ?

• If the "plan" relies on family or friends to provide care, those family members or loved ones should be part of the planning discussion and process to define expectations.?
• If the "plan" includes qualifying for Medicaid, an estate or elder law specialist should be engaged.
• If a self-funding strategy is implemented, specific assets or accounts must be identified, and a legal framework should be in place to ensure "plan" viability even if the client becomes incapacitated.
• If insurance-based options are to be considered, LTC Planning should begin during a client's mid-life years, typically between ages 45 and 65, when they're still healthy and the options are most affordable and varied. ?Age is important, but it's not too late to start the conversation, even for older clients, as effective options are available through age 85. ?However, every day that passes decreases the likelihood of qualifying for insurance-based options

How to Introduce Long-Term Care Planning

For much of the advisory community, the challenge is not in understanding the importance of LTC but in knowing when or how to broach the subject. ?Here are a few strategies:

• Integrate it into the broader financial planning conversation and position LTC as a natural part of the client's comprehensive retirement, estate, and risk management planning….A checklist for the various strategic wealth management issues is often helpful to ensure comprehensive planning.? ?This visual guide can keep clients on track by identifying and addressing potential gaps in a client's financial plan and encouraging collaboration with other advisors when specialization or expertise is necessary.
• Use real-life scenarios, sharing stories, or case studies that illustrate the consequences of not having a plan and the peace of mind that comes with being prepared.
• Highlight the client's stated values and goals and discuss how LTC Planning aligns with their desire to protect their family, preserve their assets, and maintain control over their care.
• After reviewing existing life insurance and annuities to confirm they align with current goals and the beneficiaries are correct, discuss possible advantages of repositioning those policies for LTC Planning.
• Leverage technology and tools, like the HALO Assessment , to help quantify longevity and the potential cost of care so clients see their future needs.

No More Excuses

As "The Silver Tsunami" crests when every Baby Boomer will be over the age of 65 in just six years, the time for the sidestepping, avoidance, or procrastination of LTC Planning is over. ?If you're not bringing it up, you're contributing to a pervasive issue that leaves your clients unprepared for some of the most significant challenges they may face in their later years. ?Planning for care isn't just about insurance or financial products; it's about ensuring clients have a strategy that reflects their preferences and protects their loved ones. ?

With demographics continuing to skew older, the advisory community must prioritize Long-Term Care Planning for every client, as their well-being — and the role of a trusted advisor —depend on it.