A vast majority of Americans don’t give much thought at all to long-term healthcare. Across the board, the wealthy are like most other Americans when it comes to this subject. They just don’t think about it.
One reason many do not consider provisions for long-term care is because it can come with a hefty price tag. However, the cost of not considering it can be financially devastating.
We’re Living Longer.
With one of the largest segments of the population approaching retirement age and the leading edge of the Baby Boom generation already retired, the need for long-term healthcare costs is becoming more and more apparent. According to a 2010 study, “The fact is that the average American will need adequate assets for 25-30 years – or longer than previous generations. On average, one in five 65-year-old males will survive to age 90. A 65-year-old woman has a three in 10 chance. And, if they’re married, there’s an even chance that one of them will live to celebrate a 90th birthday.” (http://projectm-online.com/new-perspectives/savings/defining-tomorrows-benefits)
The Need is Unpredictable
It’s true that the need for long-term healthcare is unpredictable. And there’s always the chance that if you do make provisions, you won’t use it. That’s the best-case scenario and if you have a plan in place that provides for this circumstance, whatever money that’s been set aside and is not used will go to the designated heirs.
Then again, if you do have a plan in place the question is, will it be enough? Putting a long-term healthcare plan in place before it’s needed is more than just a financial decision. You have to consider how not having it will impact your family and the resulting social dynamics.
The sooner you put a plan in place, the better simply because the costs of healthcare and long-term care continue to escalate. Wealthy or not, long-term healthcare for a loved one can cost millions. The wealthiest Americans will be able to self-insure their long-term health care needs. But think about what could happen to a couple with assets of $2 million. If one of the spouses require unplanned for long-term health care, the costs can derail the best-laid plans and leave the other spouse in dire straights if the husband or wife passes on.
Review Plans With Financial Adviser
Several options exist for long-term healthcare. However the landscape of insurance and other provisions is constantly changing. Products are continually designed, redesigned and phased out. Looking at and reviewing all of your options with a financial adviser who knows the ins and outs of the product landscape is advised. Protecting and optimizing your income while reducing the risks in retirement is the payoff. The cost of not considering the potential need for long-term healthcare is far more costly.