Long Term Care Planning and the Declining Economy

With the U.S. economic meltdown firmly established, and 401K and IRA savings decimated, folks are now wondering what to do next, especially regarding retirement security and independence.

Our friends in the financial planning arena report that many who were once depending on savings and investments to cover future long term care costs are now adding long term care insurance coverage to their planning mix.  They can no longer rely on so-called safe investments to protect against the catastrophic costs of future long term care.

Many once claimed, “I’d rather invest my money than pay for [tag]Long Term Care[t/ ag] Insurance premiums,” but reports from the front lines of financial planning now reveal a trend toward upgraded financial strategies in light of current events, meaning long term care insurance protection.

The nation is now painfully aware of possible investment pitfalls and disadvantages with so-called secure investment vehicles. It’s now clear that people cannot depend on investments alone to pay for long term care costs.  So here we are today, and it’s not looking good folks, and we think it will get much worse before it gets better.  No matter who’s in Washington, it will take years, possibly decades, to pay down these trillions in debt and get back to a balanced budget.

The US government website states, “?Anybody can need long term care at any time in their life.  Currently, 40% of people receiving long term care services are working age adults, between the ages of 18 and 64.2  Automobile and sporting accidents; disabling events such as strokes, brain tumors, and spinal cord injuries; and disabling illnesses such as multiple sclerosis and Parkinson’s disease are examples of injuries and ailments that can happen to anyone at any age.

“As people age and our average life span increases, the chances of needing long term care increase. After age 65, an American has more than a 70% chance of needing some form of long term care.1 In general, the longer you live, the higher your odds of needing long term care.?. How can you prudently plan and prepare for your future security? In particular, how can you safely prepare to handle long term care?”

“It won’t happen to me,” proclaim those in denial, and this is an understandable reaction And you can  cling to denial, but statistics don’t lie - More than 70% of Americans will need long term care at some point in their lives.

“I’ll wait it out,” say some, believing that their net worth may increase soon, so those folks are willing to wait and learn.  However, experts are projecting that it may take 5-10 years to recover from our 2008 losses losses.  Will your health hold out that long, and will you still be able to qualify for coverage? It’s a gamble, for sure.

“My kids will take care of me,” say others, but experience proves that although family home care is certainly a loving, noble gesture, it rarely works for long in reality.  Familial home care can be expensive, not to mention incredibly stressful.  In our home, where we live with crippling Multiple Sclerosis, we’ve paid tens of thousands for in-home care, medical devices and personal care items alone in the first half of 2008.  I get no respite, and a few months ago, I had a nervous breakdown, which is why I haven’t blogged lately.  Long term caregiving is challenging, at best ,and clinical depression is common among familial caregivers.   Caring people want to avoid inflicting such hardship and stress on their families.

Then there are those souls who decide, “OK, Now it’s time to get some LTC insurance.”  Hey, good thinking!  If you can afford it, and you know you can keep paying premiums even if the economy worsens, this is definitely the time to insure.  Do it while you’re still healthy, because you won’t be accepted once you show signs of possibly needing care.  These signs are called “pre-existing conditions” in  insurance lingo, and these disqualifying signs can show up exactly when least expected… and least wanted, making you unable to enroll.

So, what to do next?

Current events compel us to re-think our financial plans and to take this long term care risk off the table while we are still able to do this.

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