Saturday, November 8, 2014

Why Long Term Care is Essential in Retirement

People are living longer. As recent as 2011 the average life expectancy was 80 years. There are 43 million Americans today over age 65. Currently, there are approximately 55,000 centenarians in the U.S., according to the U.S. Census Bureau. That number is projected to grow to 442,000 in 2050. According to a new study conducted by, nearly half of family caregivers spend more than $5,000 a year on expenses associated with providing care. Of those spending more than $5,000, 16% are seeing costs of as much as $9,999 while 11% are spending as high as $19,999 and 5% are absorbing out of pocket expenses of as much as $49,999. There are two choices to make. Take on all of the risk of a longevity expense or shift some of that risk away. Go out and ask your financial advisor about what options you have to leverage your hard earned money and to protect your retirement. Protecting you retirement is as much about protecting your lifestyle as it is your financial wealth.

Why does LTC planning make financial sense? Using LTC Insurance, a $240,000 LTC pool of money is available today for a 60 female by paying annual premiums of $4500. In 20 years when that 60 year old is 80, the LTC pool would have grown to $450,000. If instead our 60 year old decided to invest her money so that in 20 years she has the same $450,000 of benefit available she would either have to ensure a 4% after tax return on a deposit of $187,000 or annual deposits of $13,000 a year for the next 20 years! To look at this another way, if our 60 year old female invests the $4,500 of premium she would have paid for a LTC policy over 20 years, she would essentially purchase 468 days worth of care. By shifting the risk to the insurance company, her $4,500 of premium actually creates 10x that amount or 1,460 days of care or 4 years’ worth of care available today!

Syndicated financial columnist and talk show host Steve Savant interviews nationally recognized long term care author and expert Maria Sarci.

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About Steve Savant

Steve Savant

As the National Marketing Spokesperson for Ash Brokerage, Steve Savant looks forward to meeting financial professionals in every way possible - in person or by video through conferences and social media.

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