The Big Thing Your Financial Planner Forgot

If you are earning 2% on your investments, you need a different investment adviser.  If you are earning 4-5% with some degree of safety, your planner is doing fine for you.  If your planner says he/she can get you 10% safely, you need to look elsewhere.  If the planner is actually getting you 10% consistently, you need to give me his/her name!

Investments, growing your nest egg, making you money, advising on the best way to receive benefits from Social Security, these are the things that financial planners do well and make it worth the fees they charge. But are they possibly forgetting something?

Estate planning, you have your will, durable and health care powers of attorney – check. No need to worry about estate taxes?  Neither do I.  Healthcare after retirement will be Medicare along with either a supplement or an advantage plan and part D for drugs – check.  But has your financial planner ever discussed Long-Term Care?

Nobody wants to talk about LTC.  Loosing your memory, becoming incapacitated,  giving up driving – ugh!  Lets hope it never comes to that, except that the Health and Human Services Department of the US government says 70% of us will need some LTC.

Ah, you’ve got $500,000 saved, you can cover it yourself, right?  Today, nursing home annual bills see $100,000 in the rear view mirror.  Assisted living in many cases is $60,000 a year and that is only the median bill, dementia care is much more.

If you recall the income tax deductions you got for putting money into the IRA, you might remember that withdrawals trigger the income tax now.  How much must you withdraw from an IRA so that you have $60,000 to spend after income taxes at the new “rich guy” tax bracket you just graduated into?

Surely you don’t want to leave your spouse with nothing if you need care first.  You might even have plans for some of the funds left over at death to benefit the grandchildren.

You could consider moving in with your children when care is needed.  I said consider, as their lives are way too busy to be able to provide the care you need.

I realize your financial planner is mainly focused on growing your investments.  That is his/her specialty.  My specialty is financing LTC, and I’ve been doing nothing else for 22 years now.  There are many strategies to do this, but the options available to healthy people in their fifties are the least expensive by a wide margin.

Have you considered investigating what you can do about this problem that 70% of us will face?  Or are you certain you will be in the 30% who never have to worry about it?

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