When it comes to living a long life, I have good news and bad news.
The good news is that women are outliving men.
The bad news is that it’ll cost more money to fund a longer retirement.
Longevity is the greatest retirement risk for women and that is compounded by the ever-increasing cost of health care such as long term care and assisted living.
Because women live longer, we will require access to long term care and assisted living more often than men. Outliving our male counterparts and living alone is not something most women want to think about. However, in this day and age, it would be imprudent not to.
Living to age 95 or 100 brings several issues into play that will negatively impact your nest egg:
- Changes to benefits such as SSI and Medicare
- Market volatility
- Healthcare costs – especially long term care
According to Fidelity’s Retirement Health Care Cost Estimate, a couple aged 65 retiring this year can expect to pay an estimated $280,000 on healthcare costs. (Source)
Without long term care insurance of some sort in place, those dollars will come out of your pocket.
I’ve heard many parents proudly proclaim, “My kids will take care of me when I get old.”
Please don’t be one of those parents who think that their children should bear the burden of caring for you when you’re no longer able to take care of yourself.
In addition to healthcare there are other costs to consider, such as the financial, physical and mental costs of what it will take to provide for your care. If your adult child or grandchild has to stay home to take care of you, that will cost them the opportunity to produce an income and contribute to their retirement savings. You’ll be compromising their future financial security. Please don’t do that to them.
There are plenty of ways to cover long term care costs that can fit into your budget. In addition to traditional long term care insurance, there are hybrid products on the market now. These policies allow you to pass on your premiums (or most of them) to your beneficiaries should you never need long term care.
There’s also the California Partnership for Long Term Care program, which is designed to provide options for low-to-middle income families who might not otherwise have access to care. (Forty-seven states in the U.S. provide this option.)
Jason Brown, an economist at the U. S. Treasury Department determined that women need help with long term care.
Personally, I believe that no retirement plan is complete without a strategy to cover long term care costs.
The two most crucial components of a woman’s retirement plan are
- Long term care insurance
- Guaranteed lifetime income that you cannot outlive
The reason I’m so passionate about my work is that I help my clients manage the risk of outliving their assets. That’s a big deal and I take my job very seriously.
A solid retirement plan should manage the risk of
- Living too long
- Outliving your assets
- Extended need for long term care or assisted living
If you don’t have a plan to address these risks, you don’t really have a plan.
Ladies, the bottom line is this: There is power in planning!
Got questions about your retirement plan or long term care needs? Please feel free to call for a 30-minute complimentary consultation.
(831) 641-7127 or submit your questions here: Ask Patti