Only 11% of Americans aged 65+ own long term care insurance (Source: Urban Institute). For people between 55-60, only 5% have long term care insurance. So it’s likely that you – the one reading this article – are not prepared financially for long term care. That’s a problem, because if you are not prepared financially for long term care, you can ruin your family and exhaust the assets you’ve accumulated throughout your life.
So imagine this…you’ve worked your whole life. You’ve been a successful business person that has provided a wonderful life for your family. You’ve watched your family grow from perhaps just the two of you, to four of you to now eight little grandkids jumping on your knee while enjoying a cool summer night at your cottage at the lake.
But here’s the rest of the scenario, and you’ll see how quickly things go from “Hmmm…” to “My goodness, this is a crisis!”
You’re 70 years old now. You’ve got your physical issues – a bum knee, a dull pain in the shoulder. But otherwise, you feel good, and still work a little bit to keep your mind fresh.
A year or two goes by, and now you’re starting to become more forgetful – or at least that’s what your spouse and children have started to tell you.
A few more years go by, and you’re 77. In your mind, you don’t think you’re any different, but the people around you are noticeably irritated because they keep on saying you’re repeating yourself, and forgetting the grandchildren’s names. Another year or two go by, and it’s now a health care crisis that puts you in a memory care facility with beautiful grounds and a lush garden of flowers – and it costs $6,000 per month.
With Long Term Care Insurance
This is simple…it kicks in, and the financial burden on your family is minimal allowing them to provide loving care to you every day. Long Term Care Insurance is the tool that allows you to be the one coordinating care for your loved one, not providing it.
Without Long Term Care Insurance
Your spouse, who is also getting older, is reeling every day, going from sadness to anger to an odd feeling of empowerment. But in addition to the emotional roller coaster, he or she now needs to figure out how to pay for this new level of care. There’s no insurance, so the family is brought together to discuss how this is all going to be paid for.
“Well, we have his pension plan still a little bit. That, plus social security and Medicare help some.”
“Yeah, but not $6,000 per month some! And you have your own expenses, don’t forget.”
“So maybe we need to liquidate some of our investments. We have some stock, mutual funds…I’ll call my financial advisor tomorrow.”
“OK, that’s a good start. But that also needs to be available to you as you continue through retirement. We need to find a balance.”
“We can tap a bit into the trust for little Jimmy. Not much…it’s still there to hopefully pay for his higher education.”
“We could do that. It would be a real shame, but we could that.”
“We could sell the cottage. That would cover the majority of care from here on out.”
“Yes, I suppose we could do that. We’re going to need to make a decision quick, because the bills are going to start racking up. I have a real estate agent that can probably get to work now.”
“That’s great. I’ll call the financial advisor. You call your real estate friend. We can hold off the nursing home for a week or so, but we’re going to need to get this moving fast.”
“Such a shame. We all loved coming to the cottage. It’s been our most special place for decades.”
“I know, honey. We’ll always have the memories, though.”
The memories of the cottage and the hope for what the family trust would provide for the next generation are now associated with your long term care needs.