Increasingly baby boomers are trying to juggle a professional life in pre-retirement mode, perhaps children in college, and now a new phenomenon: aging parents.  In an article from Knoxville Tennessee today, we learn that employers are starting to reach out to those caught between multiple generations in offering schedules and other things as a way to ease the caregiver-employees into it.

That can be as simple as providing resource materials and referral services, unpaid leaves of absence, dependent flexible spending accounts or counseling. Workers can also take advantage of the Family and Medical Leave Act, which allows an employee up to a total of 12 work weeks of unpaid leave annually.

The reason I bring this story up is because long term care insurance can solve this issue for baby boomers when they get older.  For that reason, it almost seems like the industry should market itself not to baby boomers but to the kids of baby boomers, for they stand to gain the most.  I do agree, though, with one comment in the story that life is not all about play.  For those who are saddled with the responsibility of caring for elderly parents, there is some solace in knowing that the care is at home, in a loving environment.

Lately, there are increasing reports of the effects of inflation throughout the economy.  But one often overlooked corner of the economy is long-term care.  An important part of any financial plan includes long-term care insurance, but how can you plan if the numbers keep changing?

Here are some of the recent facts and figures released in a recent Genworth survey of long-term care costs across the country:

• Costs range from $45,000 in Louisiana to $187,000 in Alaska.  Some remote areas can have extreme cases where costs are much higher than even the next market-over.  Try to think of where you plan to stay and remember that staying in some remote areas may be cost prohibitive.
• It is recommended that clients look into long-term care insurance when they are about 50.  The premiums are still reasonable.  Currently long-term care insurance has about a 7% penetration in this market, with 1/3 of the clients using their policy for a claim.
• Some Genworth policies are starting to pay for family members to care for loved ones, as the long-term care workforce is not growing as fast as demand.

     Options when planning for Long Term Care

     In my decade of helping people plan for long term care (LTC), I've met or spoken with over 10,000 people on the subject and unlike investments which I help people with as well, long term care is often viewed as a depressing subject to talk about.  You will get that person who is grumpy and when the subject is broached, he'll (or she'll sometimes) say, "well if I ever need long term care, I'll just shoot myself."  Now, increasingly, I'm finding that as people have become more educated on planning for long term care over the years because of more media coverage or maybe seeing how devastating a long term care stay can be with one of their parents, more and more are becoming realistic about the subject and planning before it's too late. 

     If you simply stop, and logically think about the long term care problem and your options, there are only 4 LTC choices you have when planning for your retirement.

Option 1: Public Programs
     You simply cannot rely on Medicare because on a nationwide basis, Medicare covers only 11% of nursing home care costs and 24% percent of home health costs.  Medicare pays only for post-hospital, short-term rehabilitative care and short nursing visits (typically 20 days max).  Medicare Supplement Plans do not offer much help either, these plans cover co-payments, deductibles of the limited benefits, and services covered by Medicare.  You don't want to rely on Medicaid because in order to qualify for this Welfare program you have to spend-down your assets to the state’s poverty level--that's means your now broke. 

Option 2: Private/Family Support
     Of course, your kids, family and friends might care for you if you were to need long term care.  On the surface, this may sound like a good solution to your problem.  However, think about it and ask yourself realistically: Will they have time to drop what they are doing to help me?  Can they provide, and do they have the proper training needed to give the type of care I may need?  Do I really want to ask this of them and have my son or daughter give me a sponge bath?  There are numerous over-looked emotional, physical, financial, and geographical requirements that can make relying upon your kids and or family/friends an uncomfortable and most importantly unrealistic option.

Option 3: Self-Insure
     You may not realize it, but right now you are self-insured against the long term care risk, unless you already have a long term care insurance policy.  Without coverage, your 401K, Cd's, IRA, etc. are your insurance company and you are solely taking on the financial risk for the costs of long term care.

Option 4: Protect you and your family with a Long Term Care Insurance policy

     Asset protection is essential to financial stability, especially during retirement.  With out a doubt you have already taken steps to ensure your family's financial future is protected in the event of accidents.  You probably have life and health insurance, as well as coverage for your home and car.  These are realistic-practical approaches to transferring the risk of unforeseen expenses away from you and your family to an insurance company because it makes sense.  Think about this for a second...imagine you are going on vacation to Disney World and you pack your bags in the car, turn off all the lights, turn down the thermostat, and leave the front door wide open.  By not having long term care insurance when you have a nest-egg to lose, you are leaving your front door wide open to your greatest risk you will face.  Do yourself and family a favor and at least look into long term care insurance and see if its right for you.

At LTCtree we work with most all the top long term care insurance so take a few minutes and complete the form below and we'll get your quotes out to you in today's mail.