Long Term Care Services are EXPENSIVE!
And someone has to pay for it. How will you pay for care?

Financial Planning and Long Term Care

If you were to ask a hundred different people what financial planning meant to them, you would get a hundred different answers. Many think of investing and saving for retirement. Others think of managing assets to create income and leave a legacy. Some may equate financial planning with growth strategies in a bear market and protection strategies in a bear market. Some may consider hedging a part of the equation. The answers to this question will vary as greatly as the number of respondents surveyed and yet financial planning is really very simple.

Financial planning is not investing. It is not protecting. And it’s not hedging. Financial planning may be all of these things or none of these things, but… financial planning at its core is about risk management. It’s about planning for and mitigating the financial pitfalls a family risks during their working years and in retirement. And for most Americans, there are really just a hand-full of major risks including:

  • RISK: Lack of Money/Income – The majority of financial planning is often wrapped up in managing the risk of not having enough money to pay the bills. Savings accounts, investment accounts, 401ks and IRAs all have the primary purpose of building assets so you’ll have enough money for a rainy day and retirement.
  • RISK: Investment Losses – A lifetime of savings can be lost with huge swings in the stock market and real estate. Investing in different asset classes (diversification), dollar-cost averaging, target-date funds, and laddered bond and annuity strategies are just a few ways of managing this risk.
  • RISK: Loss of Income – The greatest asset for many Americans is their ability to work and earn an income, so losing one’s income due to disability or death can be financially devastating for those who are unprepared. Disability and life insurance are designed to mitigate these risks.
  • RISK: Longevity Risk -Just when you thought you had it all figured out, the months and years pass and you find out you have too much life left at the end of your money. It won’t be uncommon for many of to live well into our nineties and past 100, so it’s important we don’t outlive our income. Fixed and immediate annuities and laddered bond and annuity strategies ensure we preserve our investment principle and generate lifetime income.
  • RISK: Long Term Care – Flip a coin and you’ll see the odds of needing expensive long term care in your family. 3 out of 4 seniors over age 65 will need some kind of long term care that is not paid by Medicare and half of these will be women. Paying for expensive care out of your pocket can devastate a family’s retirement nest egg. Long term care insurance helps manage your greatest unfunded financial risk in retirement.

To be sure, there are other risks we all face – risks to our homes, cars, and other property. But for most Americans, there will be no greater financial risk in retirement than long term care. Be sure to learn what your options are in paying for care and consider whether long term care insurance is the right way to manage this risk for you and your family.

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