Long-Term Health Care Costs Can Put Your Retirement Plans at Risk

An article on long term care insurance appeared this week in the AJC (Atlanta Journal and Constitution) written by the Associated Press at the DesMoines Register that really did a good job of summarizing the potential problems for Baby-Boomers' retirement.

The high cost of long-term health care will drag down the quality of life for nearly two-thirds of today's retirees. It can cost $77,000 a year for a nursing home room and $20,000 for in-home care, expenses that many people are ill prepared to absorb, said the Center for Retirement Research at Boston College.

The key fact I found so troubling is... 

...that it is estimated that 64% of all retirees will not be able to maintain their standard of living when the high potential cost of long term care is factored in.  The financial tsunami has literally cut Boomer's retirement accounts in half in most cases and the nest egg they were banking on to pay to maintain their lifestyle and pay potential long term care costs.  Now, we've seen the huge financial problem rear it's ugly head and the government's response of HUGE capital injections will create inflation in the near future.  What is one to do to plan for the long term care risk?  Plan, Plan, and more Planning. 

You might decide to not buy long term care insurance and that's OK, just have a plan.  However, a common method many people can use a to pay for long term care insurance is the "Interest on Savings" method.  Read more in the link, but essentially what it is can be explained in this simple example.  Say you have a portfolio of 500k and simply take the interest on that 100k CD you have say 4.5%, which would give you $4,500/yr in interest.  Take a portion of the intrest which will create a separate LTC account filled with about 500K of money you could use on a long term care need for either you or your spouse.  By using a portion of the interest from that one account you protect the whole portfolio. 

Sifting through all this LTC info can be confusing especially when trying to compare companies to find the best deal.  At LTCtree since 1998 we've been helping out clients shop the entire LTC market  in one place with the goal of finding the best deal with a blue-chip carrier.  If you'd like to get you quotes from the top 5 mailed to you simply fill in the form below.  Thank for reading today's blog...we really appreciate it.