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Long term care in numbers: the side of the coin you need to consider when planning for retirement.

If you are in your 50’s, 60’s and beyond, this information is for you!

It is clear that one of the major challenges when planning for retirement is related to long term care. A recent study conducted by LIMRA ((Life Insurance Market Research Association) indicates that “pre-retirees are clearly more concerned about some risks as opposed to others; public policy (and how it affects retirement), and healthcare-related costs tend to worry pre-retirees the most.”

My recommendation is to include the care side of the equation while planning for retirement as early as you can, taking into consideration those aspects --such as your lifestyle -- and the role your health (or lack thereof) will affect you down the road. The longer you wait, the higher your cost for care and insurance premiums will be. The costs associated with long term care must be included while planning for retirement, using current costs as your point of reference.

Strategizing on how much to invest towards your care requires a significant amount of research. Understanding the alternatives in long term care policies based on a self-assessment (financially and health-wise) will help identify the approximate costs you will be needing to cover your needs. For example, if a family member suffers from Alzheimer’s/dementia, then you definitely want to research current costs of care because of the risk factor of being diagnosed with the disease down the road.

Although it’s impossible to predict how we live our golden years, there are other indicators that will help you start identifying the areas that might be needing some attention, and that may influence the state of your financial health during retirement.

I can assist in finding the coverage that best fits your needs depending on your age, health condition and especially your budget. The recommendation I typically give my clients includes:

Let me do the research for you: I can help you analyze the costs from a broker perspective, and those aspects you need to look for that respond to YOUR needs.

Propose alternatives for you: The cost of insurance has increased, and will continue to do so. There are other alternatives in the market, and perhaps your retirement savings can offset some of the costs of your care down the road. We have also briefly touched on the recent introduction of Hybrid Long Term Care coverages that offset care costs using an annuity or life insurance policy.

Budget analysis: I have had the opportunity of working with my clients in establishing their budgets. The one conclusion that stands out comes down to affordability within an expectation: avoid overpaying for care that might be difficult to afford own the road.

Morningstar.com has done a fantastic job in keeping up with the stats of long term care. This summary will hopefully offer some insights on the need for and costs of care. Don’t hesitate to contact me if you need help!

(Please note that the information below is meant as a representation, and is expressed in averages)