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

By the time you reach age 40, you should have funds set aside for your future retirement. Planning for a successful future retirement takes some effort. It would be best if you use your employer’s 401(k) option. If your employer doesn’t offer a 401(k), 403(b), or a defined retirement program, make an effort to save money in an IRA. If you are self-employed, you must open a SEP account. However, planning does not stop at saving money.

What happens if your health changes due to a long-term illness, an accident or simply due to ageing? As you age, these health risks increase significantly. Does your retirement plan survive longevity?

Long-term care retirement planning has become a top priority for many Generation X and Baby Boomers. Many people ages 40 to 70 have personally experienced the impact of long-term health care with a parent or other loved one.

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

You will experience changes in your health, body and mind, increasing your need for long-term health care. Family care is a challenge for your family. Depending on your children to be caretakers is not a good plan. They have or will have their own career, family and responsibilities. It’s not that they don’t love you, but having a son or daughter or in-laws as a caretaker is stressful. It can also affect their health and career.

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

Paid care depletes 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 and support continues to rise. Even a sizeable nest egg can be adversely affected.

The current national average cost of home care, based on a 44-hour work week, is nearly $4,500 per month. Basic assisted living costs start at $4300 per month plus allowances based on your needs. Skilled care in a nursing home costs an average of $8,900 per month — more than $100,000 per year. The cost of long-term care increases over time.

Many people mistakenly assume that Medicare will pay for any long-term care needs in the future. Health insurance, Medicare and supplements only pay for a limited number of skilled services – and only if you get better. These insurance options do not cover the cost of guardianship services, which help with daily living activities. However, most people need custodial services as they age.

While most long-term care takes place as we age, people of all ages need comprehensive care. Early-onset dementia, including Alzheimer’s disease, the most well-known form of dementia, can occur as early as your 30s. Parkinson’s, multiple sclerosis and even strokes occur at a younger age.

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

Medicaid, the medical welfare program, can afford long-term care, but you have to be poor or become poor. For most people, this is something you want to avoid.

The fact is that the financial costs and burdens of aging will affect your savings and your family. Affordable long-term care insurance protects your assets and eases the burden otherwise placed on your family.

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

If you enjoy reasonably good health, these policies will easily fit into most people’s budgets. The problem is that too many people look for a financial advisor or claims broker with little knowledge in this area. They often make recommendations that are too big or sometimes too little. In addition, many of these professionals only work for one or two insurance companies. Because they don’t have a good idea of ​​how policies are used at the time of claim, their recommendations are inconsistent with what you actually need.

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

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

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

The cost of long-term care varies from location to location. Most claims start with care at home, and many people avoid a nursing home altogether because they get the right attention at home or in a residential care facility. These costs are much lower than skilled services in a nursing home.

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

Does Long Term Care Insurance Work? Absolute. In 2020, the major insurance companies paid more than $11.6 billion in benefits to American families. These families would otherwise have had to drain their own funds to pay for care, have relatives become caretakers, or both.

As policies are custom designed, you can decide what is important to you. The key is to plan before you retire. Long term health insurance is not sexy. It doesn’t shine like a new car or a new piece of jewelry. You may not show off your policy at a party. However, it will give you and your family peace of mind.

When you work with a long-term care specialist, you get the right information you’re looking for. Start your research in your 40s and 50s when you have the most affordable options.

The fact is that long term care insurance is convenient, affordable and rate stable for income and asset protection.