Do you have a plan for living a long life? The fastest growing age group is the group over age 85. When the social security system was initially put into place, it was set up as a safety net for those few people who lived much beyond age 65. Now there are people who are drawing from the Social Security system for almost as many years as they paid into it – a startling statistic isn’t it?
So how do we plan for living a long life? Have you thought about the consequences of living a long life? Have you thought about what retirement looks like? Most people would answer no not really,” I just know I want to be able to live like I’m living today and not go to work”. Obviously we need to have our finances in order. A common fear for many retirees is outliving their assets. Many are dependent on investment income to supplement Social Security earnings to meet their day-to-day expenses. Many retirees may be reluctant to tap into their principal, wanting to preserve it at all costs. “ I want to keep together what I put together.” Many say, “ I want to preserve my income stream and I also want to preserve the principal plus leave a legacy but not at the cost of my retirement.” I think you would agree that is a great deal of pressure on a retirement portfolio.
One great risk to a retirement nest egg is that of an extended care need. And the likelihood of needing care increases with increased age. The older we are, the more likely we are to develop conditions that may require us to have assistance with day-to-day activities such as bathing, dressing, getting in and out of a chair. The need for assistance can be due to things like severe arthritis, emphysema, cardiac problems, or even an accident. It may also be due to conditions such as multiple sclerosis or Parkinson’s. It may simply be due to growing old and more frail or developing dementia. According to ALZ.org / Alzheimer’s Association Risk Factors (May 2015), of those over age 85, fifty percent have some level of dementia. Remember, this is the fastest growing age group in our country!
Planning for a long life must include planning for disability or incapacity. Have you given this any thought? If you were unable to care for yourself, what would you do? Would your spouse be able to care for you? What if your spouse were to pass away before you? What if your spouse was the one who needed care? Would you be able, physically, emotionally, and financially to provide the necessary care?
Have you spoken with your children about your preferences if you need care? Many of us have living wills and other documents that may say we don’t want to be kept alive by artificial means. The chronic conditions that were mentioned earlier—arthritis, cardiac problems, emphysema, Alzheimer’s disease, do not require life support. These are not situations where you are given the choice of “pulling the plug”. You could live with these conditions for many years, still enjoying many activities and relationships while needing assistance on a daily basis.
I hear people say, “My children will take care of me.” What does that mean in your family? Does that mean that they will move in with you or have you move in with them and their family? Does that mean that they will provide hands-on care such as bathing you? Or does it mean that they will provide for you financially?
As part of your planning, it’s important first of all to acknowledge that living a long life is a near certainty, that the longer we live the more likely we are to need some type of day-to-day assistance; that Medicare, Medicaid, and the Veteran’s Administration do not provide for the type of care that we may need if we experience a long-term or chronic illness or injury. In that event, we need someone to come into our home to provide assistance, or we may even need to move to where that assistance can be provided on a daily basis.
It’s then important to acknowledge that an extended care situation will have a tremendous impact on your family. What would the impact be on your child’s life if they become responsible for your care twenty-four hours a day? Think about the impact even if they provide care only eight hours a day. What does that do to their family time? To their career? To their other responsibilities and commitments? What would it mean to them financially?
I firmly believe that spouses and children will do all they can to provide care but it can be very difficult. They will do the right thing. But having a plan in place can help them in this new role as caregiver.
So, for your planning, make your loved ones aware of your care preferences. Do you want to stay in the area that you currently live or would you prefer move to another part of the country where you have family or friends? Would you want to move in with your children or, like many, do you not want to be a burden to your family members? Do you want to receive care at home for as long as possible or would you prefer to be in a setting such as an assisted living facility where there are other people around, there is help as needed, and there are a variety of social activities planned?
If care is needed, how will you pay for it? There are options other than taking on the risk yourself. There is long-term care insurance and many life insurance and annuity policies offer features and riders that let you access benefits in the event of illness or injury that help pay for expenses associated with becoming ill. Many consumers are not familiar with the scope of benefits offered by these types of products.
Do a favor for yourself and for your loved ones. Have a plan for the eventuality of needing care. Let people know your desires. Set up the financial resources. Let your family know what resources are available either in the form of assets or insurance to pay for your care. Then, enjoy the peace of mind that comes from good planning and get out there and enjoy the years that you’ve been given!
The companies of National Life Group® and their representatives do not offer tax or legal advice. For advice concerning your own situation, please consult with your appropriate professional advisor. Long-term care insurance is available through representatives who are independently contracted with one or more insurers who provide these types of insurance contracts. Long-term care insurance is not underwritten or issued by the insurance companies of National Life Group.
Riders are supplemental benefits that can be added to a life insurance policy or annuity contract and are not suitable unless you also have a need for life insurance or annuities. Riders are optional, may require additional premium and may not be available in all states or on all products. This is not a solicitation of any specific policy.