Does Your Retirement Plan Have a Big Red Bullseye On It?

Does Your Retirement Plan Have a Big Red Bullseye On It?

I want to warn you, this article you are reading now is not sexy, warm and fuzzy, but it is critical if your goal is to not only preserve your dignity but to ensure you don’t run out of money during your most vulnerable retirement years. I’m talking about the vital need to protect the assets you worked so hard to build over your lifetime with a “funded plan” for long-term care needs.


What do I mean by that? Well, consider these factors:

  • The main reason people purchase an insurance product to fund their future long-term care needs is because this is by far the best way to “leverage” their money. In other words, if you want to pay the least amount of money to receive the most amount of benefit—using an insurance product is the best way to do that. As an example, think of paying $150 a month to receive an immediate benefit of $150 a day, which will continue to grow with inflation protection added...for as long as you live. This is how a traditional long-term care policy may work.
  • Life-expectancy continues to grow, and the fact is the longer you live, the greater the chance that you will need some level of personal care assistance as you grow older. Currently, the stats show if you live to age 65 there is about a 70% chance you will need long-term care at some point.
  • If you do need long-term care, this can be a devastating cost if not budgeted for. Think about your retirement income needs. Could your plan support added costs of $50,000–$60,000 a year for part-time homecare assistance? How about an additional $90,000–$110,000 a year for full-time facility care?
  • It’s a curse and a blessing, but since women live longer than men... guess who is using the majority of long-term care benefits? Women.
  • Women also tend to be the “caretakers in the family”. Just ask anyone who has been a caretaker how physically and mentally exhausting it is to be a caretaker and you will realize how this also impacts our own need for long-term care next.
  • Because the majority of long-term care benefits are paid out to women, almost all insurance companies have decided to charge women more—to the tune of about 40% more than men!
  • The number of insurance companies that still offer coverage for traditional long-term care has declined dramatically over the past few years, and it is getting much harder to secure a contract as well.
  • However, if you wish to explore using a traditional long-term care policy as part of your funding plan for long-term care, we have a small window of time to apply with one of the best carriers for long-term care... Since they are the only ones in California who have not yet raised their rates for women — and that is why we have a very timely issue on our hands!

Most of this article has revolved around traditional LTC policies because they tend to offer the maximum amount of leverage for your dollar. We also feel the opportunity to obtain them at a reasonable cost (or at all) is quickly becoming a thing of the past. Thus the urgency of this message. 

However, you should realize that we typically use a number of tools when helping clients create their long-term care plan. This may include life insurance or annuities that also offer a long-term care benefit, as well as other assets that can be set aside to fund long-term care needs. The most important point may be: any plan is almost always better than none. So ask yourself, what’s your plan? We are here to help.