Financial planning involves more than just saving on taxes and putting away as much as possible; it also requires a strategic plan for retirement.
You should be managing both sides of your personal balance sheet: the debits and the credits, the assets, and the liabilities. That also involves insuring yourself against the risks that life entails.
Insurance that takes care of you
Many people are quick to purchase life insurance to ensure their loved ones are taken care of after they pass, but you also need to have insurance that takes care of you. Long-Term Care (LTC) insurance provides benefits in times of sickness, or simply old age, to subsidize the cost of your care. A great aspect of many LTC policies is the flexibility of the benefits. Depending on the level of care you need, you can decide on what’s right for you and have your insurance supplement the cost of that care. In some instances, you may be fully covered. Like life insurance, LTC insurance helps relieve some of the strain on both your bank account and your loved ones when you need it most.
Longer lifespans mean thinking about how to fund longevity
As people are living longer, LTC insurance is becoming increasingly relevant, especially as the cost of care is becoming more expensive. In 2019, the average monthly cost of an assisted living facility in the Bay Area is expected to be $5,665. At-home care is even higher at $5,794 a month and a semi-private room at a nursing home facility is $9,422. In just ten years those figures are expected to be roughly 35% higher.
Even if you have the means to pay for such expensive care, it’s far from an efficient use of the funds you’ve saved over your entire life. If you’re like many Americans, most of your savings are in tax-deferred vehicles. Dipping into those funds to pay for at-home care means paying income taxes to get the funds for the care you need. This could drastically alter any of the long-term planning for your family that you’ve put in place.
With over 70% of people aged 65 and over expected to need some type of professional care or assistance in their lifetime, appropriate LTC insurance will likely help you preserve your assets in the long-term while helping support you in your time of need.