“A new report finds that 76 percent of Americans are concerned about their ability to achieve a secure retirement, with that level of worry at 78 percent for Democrats and 76 percent for Republicans. Some 88 percent of Americans agree that the nation faces a retirement crisis, and the concern is high across party lines.
Some people are concerned about having enough Social Security to live on in retirement, as that is all they will have.
Some people are concerned that their savings and Social Security may not be enough to live on in retirement.
Some people are concerned about a large, unexpected bill that will ruin all their retirement plans and decimate their finances.
It is not usually the casinos or the cruise ships that cause financial ruin in retirement, but often times it is the need for Long Term Care and the high costs of it.
Long Term Care is sometimes an unexpected and sudden bill, other times it creeps up slowly. You know it will be expected, you are headed towards it, and can do nothing about it. That is exactly the reason why people investigate and purchase LTC insurance.
Just like we buy auto insurance in case we have an auto accident, people purchase LTC insurance when they are healthy so that when health changes they do not end up with bills that will ruin their retirement and decimate their finances.
The good news here is that most people do not need as much of it as they think they do – or is offered by insurance agents unfamiliar with LTC planning and how LTC is used. When someone starts slowing down, drives less, golfs less, travels less, dines out less, or has less boats, campers, boats, motorcycles, etc. they find these things were expensive. When these activities can no longer be enjoyed the money spent on them can be redirected towards the cost of their care.
The interest earned on savings can also help out paying the costs of care without spending any of the principal. Thus less LTC insurance may be needed. Many people today do not plan to cover the expensive nursing home as less than 13% of LTC is done there. Most care is received right in your home or in the assisted living facilities. If you are comfortable with only covering 87% of the risk, then a small policy might be appropriate.
Let’s look at an example of a 65 year old who can cover much of the costs for care from income and interest. If the shortfall is only $2000 per month, only a smaller policy of $70 per day will be appropriate. An inflation factor that grows this benefit by 5% compound each year is included in pricing, along with a 90 day deductible and a 10 year benefit period. This means the client pays for the first 90 days out of pocket and then benefits start and continue for 10 years of care. The price comes to just a hair under $2000 per year for this policy. If that premium is paid for 20 years until age 85, the total paid is just under $40,000
Due to the built in, automatic 5% compound inflation factor and benefits starting at age 85 of $185 per day, they will increase each year (with premiums now waived when on claim) to $288 per day in the 10th year of claim. The total collected in benefits to this policy holder is $852,603 over 10 years.
$40,000 of premiums paid over 20 years turns into $850,000 of benefits paid back over the next 10 years. Why haven’t you investigated LTC insurance for yourself yet?
To investigate this fairly and appropriately, meet with an expert in just this field, someone with 24 years experience financing LTC. Someone who can help (at least a little) no matter your health or finances, even if one of a couple is already on Medicaid Check us out at www.TheLongTermCareGuy.com or call us at (920) 884-3030 to schedule an investigation meeting.