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Americans Are Unprepared

A recent survey conducted among U.S. adult consumers by Age Wave/ Harris Interactive and sponsored by Genworth Financial reported that the vast majority of Americans acknowledge the importance of long-term care expense planning but only nine percent said their financial advisor had discussed the issue with them.

Research conducted by Columbia University, AARP and the American Council of Life Insurers reports that most people over age 50 are concerned that they will have enough money in retirement. Pre-retirees, those aged 55 to 65, are more risk averse than younger investors. Retirees were found to be focused on preservation of capital and five times more risk averse than younger investors.

Although long-term care is top of mind and insurance is an asset and income preservation strategy, many Americans have not even discussed long-term care with family members. Sixty-five percent of responders said they had not brought up the subject with family because it would be upsetting, 92% of spouses or partners had not discussed the three key topics outlined below and 95% of parents had not discussed the key topics with their adult children.

To help get these important conversations started, Age Wave’s Ken Dychtwald, PhD and an expert on aging, health and retirement, suggests three key topics for family discussions: 1) preferred care options and associated costs, 2) roles and responsibilities of family members overseeing the care, and 3) how will the care be funded.

There are really just three funding options available to most Americans: 1) self-fund using income, savings or liquidate investments to pay for care, 2) transfer the risk to an insurance company, or 3) qualify for government assistance by spending down assets and meeting income requirements.

Of course, our preferred option is to transfer the risk because we focus exclusively on long-term care expense planning and appropriate insurance solutions. We can also assist with prudent, tax-advantaged self-funding strategies. And, we have business partners who are experts in qualifying for Medicaid. Whatever your funding option, let Gurley LTCI be your first resource.