Why Long-Term Care Insurance Deserves a Spot in Your Retirement Plan
Why You Should Consider Long-Term Care Insurance
There are two certainties in life. Death and Taxes. It is the uncertainties that are causing Americans so much insidious distress. Top on the list for Baby Boomer-aged Americans are the cost and benefits of long-term care insurance.
1. Where will the money come from?
The Pew Center for Research describes the economic reality of being a member of the sandwich generation today. Forty-seven percent of adults in their 40s and 50s that are raising children have a parent over the age of 65. About one in seven of this group is providing financial support to both generations. Who among us has enough ‘bread’ to sustain this sandwich? Credit cards, home equity loans, savings accounts are called upon to bridge the gap between these expanding needs and limited resources.
2. What does insurance cover?
The safety nets of the Social Security Act Title XX, signed into law decades ago, have pretty much faded away with all the other competing economic demands. While social policy rarely makes its way into the polite dinner conversation, this lack of attention to shoring up community-based programs is now a shock to many Baby Boomers. Take a quick tour of this link for Medicare.gov for a menu of the programs available for the aged and disabled needing care from registered nurses, therapists, and hospital-based physician care. Medicare coverage for the kind of community-based services and caregiver support is unequal and often hard to secure.
3. Complicated family trees
Demographics paint a frightening picture when it comes to caregiving. Today there are three potential caregivers for each person requiring care. That ratio declines significantly to 1.7 caregivers for each person needing help by the year 2030. The divorce rate among Boomers topped 50% in the past five years. That means more than ⅓ of all Boomers are divorced, never married, or widowed. Changing social norms have created a web rather than tree structure of families today. Boomers are caring for parents, in-laws, stepparents, and unattached elderly relatives simultaneously.
4. Home is where the heart is.
Harvard and AARP released a comprehensive study on the financial realities of housing for senior adults. The reports highlight the indicators that affect the cost and location of caregivers. Baby Boomers today are saddled with the highest debt of any previous generation as they approach their own retirement. So, the family home now represents an economic drain including mortgage, taxes, utilities, and insurance not to mention the prospects of home modifications to accommodate physical disabilities and aging. Home equity is the bright spot as Boomer face retirement as late-career advancement declines.
5. Caregiver’s struggle to find answers.
Unfortunately, aging doesn’t happen in the same neat and tidy sequence as raising children. Many Boomers begin the caregiving journey seeking answers from Dr. Google. Missing from all the health advice on the web is a road map because each caregiving journey follows its own path. Pew Research on caregiving reveals that 46% of family members are performing skilled nursing duties with little training. Many complicated legal, financial, medical, and social issues plague the sandwich generation.
Monica Stynchula, MSW, MPH,. is CEO & Founder of Credit for Caring by REUNIONCare, Inc., an online platform that connects those requiring care with their family members, caregivers, and professional health care providers to collaboratively create and manage a patient-centered care plan.