Year-End Financial To-Do: Holidays Are a Great Time to Address “LTC Denial” – 2019

Nov 21, 2019

By Dan Schulte, Vice President and Manager, Annuities and Insurance

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Americans will travel near and far during the coming weeks to gather with family and friends for the holidays.  Many families will have someone close to them- possibly a parent- who needs help with activities of daily living for an extended period (long-term care).  Even with this reality, most families do not address their own likely future need for long-term care.  For many people, the thought of needing care is too depressing to think about, much less discuss with others.   As a result, many people live in LTC denial, thinking that they will never need care, or that the problem will take care of itself.   To illustrate the point, you might want to take a couple of surveys when there is a lull in the conversation at family dinner:

“By show of hands, who believes they will need long-term care for an extended health care event, such as Alzheimer’s, sickness, or injury?” (Expect no hands to go up.)

“By show of hands, who knows someone that receives care from a home health care worker, at an assisted living facility, or is in a nursing home due to health issues?” (Expect nearly every hand to be raised.)

This type of disconnect is typical. Often people expect to maintain their current lifestyle and good health until death.  But the reality is that according to the U.S. Department of Health and Human Services, today’s average 65-year-old has a 70% chance of needing long-term care as they age. The national average for 24-hour home care or for nursing home care is more than $100,0001 annually.  Consequently, extended caregiving financially can impact all income and wealth levels significantly.  In addition, family dynamics can be dramatically affected by an LTC event, especially if a plan is not developed or communicated to loved ones.

Everyone’s situation is different.   Think about the unique challenges the following situations would present on a family/individual:

  • Sandwich generation: An individual becomes a primary caregiver for his or her parent, while also maintaining a career and raising their own children.
  • No Immediate Family: An individual has no family.  Will a friend step in to help?
  • Location Issues:  A single parent needs care and lives in a different city as his or her children.  Who will be responsible for coordinating care?
  • Caregiving spouse: Often spouses would like to provide care for each other, but are they able physically and financially?   Will caring for your spouse disrupt your own retirement plans and change your long-term financial goals?
  • Blended families:  Will biological adult children and step-children share equally in caregiving?  Will they share any financial burden equally?

November is LTC Awareness Month which means it could be the perfect time to start having these discussions with family members you will spend time with during the holidays.  Having an open and honest discussion about long-term care is the first step in developing a plan that works for you as well as your family and friends.

There are a variety of LTC planning issues and insurance options to consider. Contact your Benjamin F. Edwards financial advisor for help with evaluating your situation and developing a plan based on your current assets, health situation, family dynamics, and cost-of-care in your area.

1 Genworth cost of Care Survey, 2018