If you are part of the baby boomer generation (born between 1944 and 1964), you may already know how important it can be to save for your retirement. Little remains of the security our parents may have enjoyed through company pensions. Today, the responsibility for retirement savings has shifted from employers to employees, and Social Security may only provide a base level of income. Today, it’s up to you to put the “golden” in your “golden years.”
Most likely, you’ve been saving diligently over many years in order to maintain your current lifestyle during retirement. But, have you factored long-term care (LTC) into the equation? Many people fail to consider what would become of their finances if they or someone close to them became incapable of caring for themselves, even temporarily. Although it’s tough to contemplate, it is likely that you or someone you love may eventually need LTC.
LTC services range from custodial care in the home to medical care in a nursing home, and the majority of LTC services provide assistance with activities of daily living, such as dressing, bathing, eating, transferring, and toileting. You are generally considered to be in need of LTC if you have difficulty performing two or more of these daily activities due to physical limitations, cognitive impairment, or both.
If you have accumulated wealth, such as retirement accounts or savings, and your funds are sufficient to cover LTC expenses, then you’re ahead of the game. However, if you hope to bequeath assets to your heirs, the cost of LTC could interfere with the best-laid plans. There may be options, such as selling property or borrowing from a permanent life insurance policy. But, these strategies can affect the amount of wealth you have to leave to heirs, and there may be tax consequences.
Maybe it’s time to consider LTC insurance (LTCi). Policies vary, but in general, they provide a set amount of coverage that can be used in a number of ways. Should you come to need daily assistance, LTCi can help cover the expenses of nursing homes, assisted living facilities, or even home health care. You may find that such coverage allows you to remain independent, while also expanding your options for care.
With LTCi, you can help mitigate the financial risk associated with extended care and manage the burden of uncertainty for yourself and your loved ones. Furthermore, if you purchase a qualified policy, premium payments may be tax-deductible. Whether you are in your 40s, 50s, or 60s, the time to begin planning is now. Each year you wait can potentially cost you more money. Premiums are based on age and benefits. So as you age, your risk of needing LTC may increase, along with the total cost.
Most people don’t think about LTC until it becomes a reality for them. As you prepare for your retirement, don’t overlook the possibility that you or someone you love may require LTC. While you don’t know what the future holds, proper planning today for an uncertain tomorrow may help preserve your hard-earned assets and enhance your options for care
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
This article was prepared by Liberty Publishing, Inc.
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