With people living so long, a retirement can often outlast a retiree’s working years. Typically there’s considerable financial preparation that occurs prior to retirement. But despite all the planning, the most overlooked aspect of planning is experiencing an unexpected health change during a long life. The subsequent consequences of living with those changes – both personally and financially – can be significant and often devastating.
Compounding this lack of planning, a surprisingly small number of pre-retirees have had a conversation with loved ones about their wishes surrounding a long term care event. The conversation should include a discussion about preferences of where care would be provided, and how to fund the cost of that care. Yet results from a national survey* showed that only half of the spouses have talked with each other about a long term care event, and far fewer of those surveyed discussed this with their children.
Here are the numbers:
52% talked with their spouse about their desired place where care would be received
47% talked with their spouse about how the care would be paid for
29% talked with their children about their desired place where care would be received
24% talked with their children about how the care would be paid for
In addition, financial planning clients aren’t communicating with their advisors about an extended care event and the resulting consequences. 9 out of 10 people believe their advisor should be discussing a long term care plan with their clients. But only 1 in 5 clients has actually talked with their advisors about this. By the time you’ve reached age 50 it’s prudent to begin to explore the issue….even if you believe that “it won’t happen to me”.
We know that a large majority of people want to avoid having their adult children directly provide their care. And of course, no one would want one spouse to drain joint retirement funds, thereby leaving the other spouse with much less savings than anticipated. By proactively raising the issue of having a plan in place to address a future long term care need, you can be provided with some degree of assurance that your retirement portfolio will be protected. Your advisor can help to facilitate the conversation and in the process create a more holistic plan. Teaming up with a specialist in this area may be the best way to achieve this. I’m happy to help get the conversation rolling.
*Versta Resarch,”2017 LTC Marketing and Thought Leadership Research, Findings from Surveys of Advisors and Consumers”. October, 2017.
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