You May Live Longer Than You Think : Financially Plan For It

A woman is helping an older man with his shirt off.


The Wall Street Journal recently ran an article entitled “Plan on living past your life expectancy,†which emphasized the fact that with people living longer, many outlive their money.  There are many reasons that this could happen, among them claiming Social Security too early, passing up the opportunity to buy annuities or long-term-care insurance, or simply mis budgeting.  Life expectancy refers to the average number of years someone will live from a given age, while longevity refers to how long someone might live if  everything goes well.  Many people, unfortunately, are ignorant of their so-called longevity risk, which is the probability of living a very long life.  Speak with your financial advisor to see if you are prepared for a long retirement.

Long Term Care Providers And Policy Holders Suffering

A woman is hugging an older man


I was fortunate enough to be able to buy a Long Term Care or LTC Insurance Policy that only required payments for 15 years, something which I don’t even think exists anymore.  Actuaries underestimated how long people would live and, as a result, have been paying out more LTC claims than originally projected.  This has caused many LTC providers to pull out of the market completely, and others to raise rates dramatically.  AARP The Magazine (December 2022/January 2023 Issue, page 28) profiled Terry Koplan, a retired Los Angeles resident who bought a policy with an inflation-protected benefit, currently $270/day, for an unlimited time.  However, he was recently notified that his annual premium would triple in 2024 to $14,315.  The insurer offered him other options such as cancelling the policy and refunding one-quarter of past premiums.  “ I feel like I have been completely cheated,†Terry told AARP.

Long Term Care Providers And Policy Holders Suffering

A woman is hugging an older man


I was fortunate enough to be able to buy a Long Term Care or LTC Insurance Policy that only required payments for 15 years, something which I don’t even think exists anymore.  Actuaries underestimated how long people would live and, as a result, have been paying out more LTC claims than originally projected.  This has caused many LTC providers to pull out of the market completely, and others to raise rates dramatically.  AARP The Magazine (December 2022/January 2023 Issue, page 28) profiled Terry Koplan, a retired Los Angeles resident who bought a policy with an inflation-protected benefit, currently $270/day, for an unlimited time.  However, he was recently notified that his annual premium would triple in 2024 to $14,315.  The insurer offered him other options such as cancelling the policy and refunding one-quarter of past premiums.  “ I feel like I have been completely cheated,†Terry told AARP.

Monterey, CA Caregiver Costs Rising : It’s Expensive To Stay In Your Own Home And Independent

A jar of coins with the word retirement written on it.


A recent article in AARP Bulletin said that nearly 70% of senior citizens will require help from others to get through their day.  Women will need it for an average of 3.7 years and men 2.2 years.  However, having owned Family inHome Caregiving of Monterey and Santa Cruz for more than 12 years, I think these numbers can be low—some people require help for more than a decade.  Seniors are living longer, and if you live to be over 100 and need care starting at age 80, that can be two decades of monthly caregiving bills if you don’t have a relative willing to step in.  Unfortunately, Long Term Care or LTC Insurance is the only type of insurance which pays for having a caregiver come to your home, and few people have it.  I always urge the children of clients that we care for to get it while they can.  It’s very expensive and the younger you get a policy and the healthier you are the better rate you will get.  Some companies also give discounts if both a husband and wife buy a policy at the same time.

Pebble Beach, CA Caregiver Costs Rising : It’s Expensive To Stay In Your Own Home And Independent

A jar of coins with the word retirement written on it.


A recent article in AARP Bulletin said that nearly 70% of senior citizens will require help from others to get through their day.  Women will need it for an average of 3.7 years and men 2.2 years.  However, having owned Family inHome Caregiving of Monterey and Santa Cruz for more than 12 years, I think these numbers can be low—some people require help for more than a decade.  Seniors are living longer, and if you live to be over 100 and need care starting at age 80, that can be two decades of monthly caregiving bills if you don’t have a relative willing to step in.  Unfortunately, Long Term Care or LTC Insurance is the only type of insurance which pays for having a caregiver come to your home, and few people have it.  I always urge the children of clients that we care for to get it while they can.  It’s very expensive and the younger you get a policy and the healthier you are the better rate you will get.  Some companies also give discounts if both a husband and wife buy a policy at the same time.

Pacific Grove, CA Caregiver Costs Rising : It’s Expensive To Stay In Your Own Home And Independent

A jar of coins with the word retirement written on it.


A recent article in AARP Bulletin said that nearly 70% of senior citizens will require help from others to get through their day.  Women will need it for an average of 3.7 years and men 2.2 years.  However, having owned Family inHome Caregiving of Monterey and Santa Cruz for more than 12 years, I think these numbers can be low—some people require help for more than a decade.  Seniors are living longer, and if you live to be over 100 and need care starting at age 80, that can be two decades of monthly caregiving bills if you don’t have a relative willing to step in.  Unfortunately, Long Term Care or LTC Insurance is the only type of insurance which pays for having a caregiver come to your home, and few people have it.  I always urge the children of clients that we care for to get it while they can.  It’s very expensive and the younger you get a policy and the healthier you are the better rate you will get.  Some companies also give discounts if both a husband and wife buy a policy at the same time.

 

Monterey, CA Caregiver Costs Rising : It’s Expensive To Stay In Your Own Home And Independent

A jar of coins with the word retirement written on it.


A recent article in AARP Bulletin said that nearly 70% of senior citizens will require help from others to get through their day.  Women will need it for an average of 3.7 years and men 2.2 years.  However, having owned Family inHome Caregiving of Monterey and Santa Cruz for more than 12 years, I think these numbers can be low—some people require help for more than a decade.  Seniors are living longer, and if you live to be over 100 and need care starting at age 80, that can be two decades of monthly caregiving bills if you don’t have a relative willing to step in.  Unfortunately, Long Term Care or LTC Insurance is the only type of insurance which pays for having a caregiver come to your home, and few people have it.  I always urge the children of clients that we care for to get it while they can.  It’s very expensive and the younger you get a policy and the healthier you are the better rate you will get.  Some companies also give discounts if both a husband and wife buy a policy at the same time.

 

Inflation Hitting Caregivers Hard : Get Long Term Care Insurance (LTC) If You Can Afford It

A man and woman looking at a laptop


Inflation is at the highest level that we have seen in more than four decades, and it is taking a toll on family caregivers.  It’s so expensive, in fact, that Amy Goyer—AARP’s family and caregiving expert and an author of two books on the subject—had to file for bankruptcy after taking care of her parents.  Once she ran out of money, she started putting expenses on credit cards and things got out of control.  “I am a caregiving expert.  How did I end up in bankruptcy?†she told the Wall Street Journal.  People are living longer, which can be a blessing but also a curse.  After more than a decade of caring for her mother, who had a stroke, her father was diagnosed with Alzheimer’s so she had the burden of caring for two parents.  There are 53 million family caregivers in America who provide $470 billion per year in free care.  On average, caregivers spend 26% of their income on caregiving expenses, according to a 2021 AARP study.  The median average cost of care rose 18.5% from 2016 to 2020 and now stands at $55K per year, according to Long Term Care Insurance (LTC) Genworth.  Get LTC Insurance while you are still young and its more affordable.

Get Long Term Care Insurance LTC If You Can Afford It : Few Seniors Can Afford TO Remain At Home And Independent : By Derek Baine, Carmel, California


One of the biggest mistakes people make in retirement planning is figuring out how much money you will need in your old age to live comfortably, and still be able to pass on gifts to loved ones and your favorite charities.  People are living longer and longer and some financial analysts are having to throw traditional models right out the window.   The New York Times recently posted an article entitled, “Tallying the Cost of Growing Older,†which explored many of the pitfalls seniors fall into as they enter retirement.  “Becoming frail and needing help with basic personal care is probably the greatest financial risk people face at older ages,†Richard Johnson, the economist who directs the Program on Retirement Policy at the Urban Institute,†told the NYT.  A 2019 study he undertook for the federal Department of Health and Human Services found that over their lifetimes, about 70% of older adults will need help from caregivers either in their own home or in long-term care facilities.  Dr. Alicia Munnell, an economist and director of the Center for Retirement Research at Boston College found that only about half of the U.S. population will be able to maintain their standard of living in retirement.  Her team analyzed senior lifetime care needs as low, medium or high intensity, based on how many activities of daily living they need assistance with.  Their analysis found that only 17% of 65-year-olds will need no long-term care, while almost one-quarter will develop severe needs, requiring many hours of help for more than three years.  Most people are somewhere in-between.  Their research also found that only 36% of people in their late 60’s could not even cover a year of in-home care, and that was at 2018 rates of $22 an hour—this has gone up significantly with the current labor shortage.  We are a big proponent of long-term-care insurance.  It’s very expensive but worth it in the long run if you run into health problems.  Few people realize how expensive it can be to remain independent in your own home with the help of paid caregivers.

https://www.nytimes.com/2021/10/02/health/elderly-health-care-finances.html?campaign_id=9&emc=edit_nn_20211003&instance_id=41936&nl=the-morning&regi_id=105425463&segment_id=70562&te=1&user_id=0fafdefaa53c0a82473acdaa719a0aac

 

Long Term Care Insurance Or LTC To Be Funded By The Government?

A stethoscope laying on top of papers.


Long Term Care or LTC Insurance is the only insurance policy which will cover the care of services provided by companies like Family inHome Caregiving.  Unfortunately, it is very expensive and few people have it.  A 2019 study funded by the National Investment Center for Seniors Housing & Care found that by 2029, more than half of the nation’s 14.4 million middle-income older adults won’t have the financial resources necessary to pay for senior housing or in-home care.  The study concludes that both public and private funds need to come to the rescue.  There is hope.  The Well-Being Insurance for Seniors to be at Home (WISH) Act would create a federal LTC trust fund that would pay for catastrophic long-term care for those who need it, and it would also allow private insurance companies to offer affordable coverage plans for the initial years of disability.  The plan would be fully paid for by a slight increase in the payroll tax (0.3% of income for both workers and employers), or roughly $300 per year for a median-income earner.

https://www.wsj.com/articles/social-security-costs-expected-to-exceed-total-income-in-2021-as-covid-19-takes-financial-toll-11630436193?mod=djemwhatsnews