No one likes to think about themselves being vulnerable or dependent on another person to help them with daily tasks, right? The reality is that most people will need some form of extended care/long-term care (LTC) in their lifetime and if you have a plan, it can protect your family and finances. With that in mind, everyone can benefit from doing long term care planning.
Tom Hegna, retirement income expert, and Kelly chatted about the importance of having an LTC plan as a part of your retirement plan.
If you need LTC, it not only can be financially very expensive, but there can be severe consequences to yourself, your family, and your finances if you don’t have a plan. A plan consists of things like who will provide and coordinate care, how you’re going to pay for care, and where you will receive care.
If you need some form of LTC, do you really want your spouse, kids, family member or friend to physically provide care, or would you rather them supervise or coordinate your care? Hiring professional caregivers is often a preferred method for many families, so that your loved ones are not burdened with physically helping with activities of daily living (transferring, toileting, bathing, dressing, eating, and continence). You can protect them from caregiver burnout which is very common amongst caregivers.
If you don’t have a plan, your family will have no choice but to step in and provide care.
Emotional and mental health are big concerns in caregiving situations. Professional caregivers protect these relationships, so that loved ones can remain in their given roles; a spouse, child, friend, etc, and not have to be your official caregiver. We too often see families torn apart when caregiving is needed because one family member typically takes the brunt of the responsibility and there’s bitterness and disagreements.
If you have a LTC plan, it will also protect your loved ones financially so they don’t have to reduce hours at work or even quit their job to provide care for you. If they have a spouse and kids, a plan will also protect their time with their family, e.g., not miss kids’ games and events and quality family time.
If you suddenly needed care and your care expenses were $6,000/mo., how would you pay for it without it disrupting your lifestyle? If you don’t have a LTC insurance policy that provides tax-free income, what bucket of money are you accessing? Are there tax consequences with the money you plan to use?
If you have to pull out $72,000/yr ($6k/mo.) from your retirement accounts for care, you’re draining your principal which produces income for you. Ideally, you have a designated guaranteed bucket of tax-free money for LTC expenses, like a LTC insurance policy. A LTC insurance policy protects your retirement dollars so that you can spend money on the things that you want to instead of the things that you have to with LTC.
Long-term care insurance protects your family, income, and assets. It allows you to stay in control of your care options and receive quality care wherever you call home. It’s a love gift to your family.
No retirement plan is complete without a plan for long-term care. Planning ahead before care is needed is critical. Once care is needed, it’s too late for LTC insurance. The younger and healthier you are, the more LTC insurance options will be available, so plan ahead!
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No Retirement Plan is Complete Without a Plan for Long-Term Care
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