It is hard to believe 2011 is already here. As a child, I remember thinking that each year lasted a long time, but now each one seems to pass more quickly. In 2010, after an extended illness, my Dad went to Heaven, and, over the course of the last several years, I have worked with many other people who were caring for aging parents. Anyone who has walked that valley will surely agree that growing older can present unforeseen challenges. If you have experienced this in the past, you have learned that planning for that time in your life is more important than you had imagined.
It’s nice to think we will be healthy to the end, but the truth is that most of us will face declining health as the years go on. We often joke that the doctor’s news doesn’t get better when you have your annual physical after turning 50. Whether it’s blood pressure, cholesterol, or triglycerides, the rising trend is not good news, and “healthy living” gets more and more challenging. We like to assure ourselves we will not be a burden to others as we get older. So…what are our options?
Much has been written about saving for retirement so that our golden years remain golden. Many recognize the threat long term care presents to even the best retirement planning. Providing necessary care in any setting (including one’s home, adult day care, assisted living, or a nursing home) can cost thousands of dollars each month and deplete retirement savings faster than any projection forecasts.
It is true that Medicaid will pay the expenses for many who deplete their resources. For those who expect to use their own savings to provide care for themselves, there are few alternatives. The first is to self-insure. Cost can easily be $5,000-$10,000 per month depending on the level of care required and the environment where it is provided. It is not difficult to calculate how much that could be over a period of several years.
Many will consider Long Term Care insurance (LTC), a viable alternative to protect your financial planning and retirement savings. Although LTC insurance may seem expensive, it is an investment in financial protection. Costs continue to increase, so considering its purchase sooner rather than later means it will likely cost less, and you are probably healthier now than when you are older.
A new way to purchase LTC insurance is through a hybrid fixed annuity product that allows the annuity owner to purchase an LTC insurance rider and access additional benefits if the owner qualifies for long term care. Single females are especially at risk because they typically live longer than men and may outlive their savings.
To answer your questions and discuss your unique situation, call 866-739-7064 to schedule an appointment with a Founders Investment Services financial consultant.
Securities and investment advisory services offered through Financial Network Investment Corporation, member SIPC - Founders Federal Credit Union and Financial Network are not affiliated. Financial Network Registered Sales Branches are located at: 607 N. Main Street, Lancaster, SC 29720; 1307 Boiling Springs Road, Spartanburg, SC 29303; 1290 Old Springdale Road, Rock Hill, SC 29730; 100 Springcrest Drive, Fort Mill, SC 29715.
Not NCUA Insured - No Credit Union Guarantee - May Lose Value - Not Deposits - Not Insured by any Federal Government Agency.
This article was published in the Founders FCU's Springtimers Newsletter (March 2011). It was written by Kristen Davis Rhyne, Certified Financial Planner with Founders Investment Services Team.