News

70% of Americans over 65 years old will need some level of long-term care services.[1] And yet, only 3% of Americans have some sort of long-term care insurance[2]. The problem lies in that when it comes to planning a safe and secure retirement, long-term care remains a confusing and unaddressed challenge to many people’s financial security. Long-term care insurance is not always the answer, but formulating a plan for a potential long-term care event within your retirement is a must.

Why are people not planning for this critical issue?

• It seems remote and too far off
• There is a false sense of security (“That won’t happen to me”)
• It’s too stressful to think about
• Long-term care insurance feels too expensive
• Many think Medicaid will pay for it.

What are the risks of not planning for a future long-term care event?

• Spending down most of your assets and leaving strain on the surviving spouse
• Leaving little to no inheritance
• Unintended tax consequences when spending money for care
• Family strain on responsibilities and care arrangements
• Lost wages or missed work for family members put in responsibility for this care

What are the steps to take in order to begin planning for long-term care?

The first step to planning for long-term care is to create a true financial plan for yourself and your family. There typically are three options to pay for care. 1. Self-funding care from your income and assets, 2. Protecting assets and spending down assets to qualify for Medicaid, and 3. Paying for care with insurance. As you can see, long-term care insurance is not the only way to plan for a long-term care event. Each of these options have significant pros and cons, as well as significant costs in various forms. At Marshall+Sterling Wealth Advisors, we start with a true retirement plan to get a visual on your cash flow, retirement assets, growth projections, and retirement income needs. We factor in social security, inheritance goals, estate planning, and taxes. We discuss family history, health concerns, and what your ideal vision is of your long-term care. Once we have this clear picture, we then look at various long-term care scenarios that could occur, and we see how your retirement plan holds up to each of those. We consider all options available for paying for this potential care need and evaluate which one is the best fit. Because the costs of long-term care are so great, finding a true fit for your unique retirement plan often helps save in cost over the long run.

A long-term care event, if not planned for, can be a detriment to your future finances. But, with proper planning, you can provide yourself peace of mind knowing that this topic was addressed with a qualified team by your side.

Retirement and Wealth