Blessing or Curse?
A few months ago, I was mildly surprised to hear a report that the average life expectancy of both men and women in the United States, according to the National Center for Health Statistics, declined slightly for the first time since 1993. One would think there are limits to what science and medical advances can do to lengthen our lives, but it strikes me that perhaps this is only a plateau on the way to even higher averages. In fact, a study by the World Health Organization released in March 2017 suggested exactly that. It makes me pause to consider if this boost of average longevity is really a blessing or a curse. In part, the answer depends upon how well one has financially prepared for the prospect of adding another 15-20 years to their life. Are you?
I remember fondly as a child watching The Walton’s. The stories of life in “the Blue Ridge of Virginia” resonated with me because my father grew up in that era and near the oft-mentioned town of Charlottesville. Perhaps that tight-knit family network existed then even outside of “TV land”, as some of my fathers’ childhood remembrances attest. But as the series began to age, the story-line demonstrated the reality of a changing society and the dispersal of that family. Today, the common geographic dispersion of adult children, high rates of divorce, later in life marriage and child-rearing and the near absence of homemaking and one-wage earner families, among other causes, has limited the ability of families to care for one another as age related difficulty emerges. We are not living in the era of the Walton’s anymore!
Instead of the family caregiver support network, a legion of professional care resources has emerged to fill this need. Sitter services, home health, assisted living, memory care and hospice organizations have increased in number to meet the demand of caring for the aging in our society. There is even a resurgence of the “house-call” medical doctor model sometimes identified as concierge medicine.
This situation then begs the question of how one funds this probable and expensive care relying on professionals for these services? Medicare generally pays only for expenses connected with a hospital stay and social security is not adequate to cover the expense of extended long-term care services. Although some Veterans programs and Medicaid can provide additional funds for eligible applicants, these social programs are increasingly difficult to qualify for without first having “spent-down” personal assets.
The steward’s approach might suggest “The prudent sees danger and hides himself, but the simple go on and suffer for it” (Proverbs 22:3, ESV). Protecting your financial plan means accurately assessing risks and “hiding” yourself. That doesn’t mean shirk from it or run away, but face it with a courageous plan to deal with it appropriately. Be prepared for the day rather than ignore it and suffer. Who suffers? Well, if your plan has always been to leave a financial legacy to your family or to a charitable organization, those potential beneficiaries could suffer if your care costs consume resources once planned for other purposes. This could be the difference between longevity being a blessing or a curse to your family, from a financial point of view.
One way to “hide” your financial assets from care consumption, is to protect assets by utilizing a long-term care insurance policy (or policies as appropriate) in your overall plan. The marketplace has evolved from traditional policies to more creative and robust multi-use policies that might serve the need to protect your financial plan. Whether you have an older policy or have never considered putting this type protection in place, let’s discuss how the right solution can help update and protect your carefully made financial plan, or that of your aging loved ones.
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