Safeguard Your Retirement Savings

Think retirement is far away? It will happen soon than you think, and getting ready for retirement is something you should be doing throughout your working years.

When respondents were asked when they plan to retire in a Gallup survey, most people said between ages 65 and 67. However, the average age that people actually retire is 61. Are you prepared for retirement and the consequences that come with aging?

If you are at least 40, you should already have saved money for your future retirement. By putting money in your 401(k), IRA, or 403(b), you have started a plan for a successful future retirement. You should also plan to protect that money from the financial costs and burdens of aging. For many people, affordable Long-Term Care Insurance will safeguard their hard-earned assets and ease the burden extended care places on family.

Insurance for your 401(k)

Long-Term Care Insurance is insurance for your 401(k) and other assets. Where will the money come from to pay for your future long-term health care? You should know by now that the responsibility is yours unless you have little or no income and assets, in which case Medicaid can be your long-term health care plan.

Health insurance, Medicare, and supplements only pay a limited amount of skilled services. These insurance options do not cover the costs of custodial services, which help with everyday activities-of-daily living. However, most people require custodial services as they age.

This is a Big Issue, Especially for Generation X and Late Boomers

Long-term health care will impact you, your family, assets, lifestyle, and legacy. Inflation and increased demand for long-term health care services are raising the costs of care services throughout the country.

If you need long-term health care today, could you take on an additional bill for anywhere from $4000 a month to more than $10,000, depending on your needs and where you are receiving your care? Probably this would be financially difficult, if not almost impossible, even if you have done well over your working years.

Now, if you are age 50, for example, think about what your long-term health care will cost in 25 years when you are age 75. The cost of care depends on many variables, including where you live.

For someone in Des Moines, Iowa, for example, one year of in-home care, based on a 44-hour week, will average over $4800 a month in 2022. But in 2047, that cost is expected to average over $9400 a month (based on higher labor costs). Assisted living, memory care, and nursing home care will be even more expensive.

Now, compare Des Moines to Sacramento, California, for example. In Sacramento, the same amount of in-home care services that average about $4800 a month in Des Moines runs over $5400 a month. Assisted living and nursing home costs are even higher in California compared to Iowa. These numbers come from the LTC NEWS Cost of Care Calculator. 

If you can't afford professional care and don't want to go into a Medicaid long-term care facility, your family will become your caregiver. Do you want to be dependent on them and place that burden on them and their families?

The duties of a family caregiver typically fall on a daughter or daughter-in-law; however, more men and even young people become caregivers out of necessity. 

What to Get Done Now

Be sure to take these proactive actions to help ensure a successful future retirement:

• Make contributions to your 401(k) or another retirement account

• If your employer does not offer a 401(k) set-up and contribute money to an IRA

• Put in place paperwork like your last will and testament, living will, and powers of attorney for finances and health care 

• Consider which one of your adult children would hold the power of attorney. Have you discussed your wishes?

• If you have savings to protect consider adding a Long-Term Care Insurance policy to your plan

LTC Insurance - Part of the Plan

Long-Term Care Insurance provides guaranteed tax-free benefits to pay for your choice of quality care options, including care in your home. You don't have to be concerned about the markets or the economy; your benefits are guaranteed. 

Since you must health qualify to get coverage in place, the ideal time to obtain coverage is before retirement. Most people purchase coverage in their 50s to save money and take advantage of better health.  

You probably want to enjoy a worry-free retirement. That takes planning, and that planning should be already in progress. If not, better get going now.