Avoiding Costly Retirement Surprises
In our golden years, unexpected expenses can derail even the best-laid retirement plans. Many retirees encounter unforeseen financial burdens, often stemming from long-term care needs or caregiving duties for loved ones. This article explores these challenges and offers insight into potential solutions.
Long-term care presents a significant risk. According to government data, people aged 65 and older face a 70% chance of needing long-term care. Moreover, about 20% of these individuals may require such care services for more than five years. Despite available assistance programs, qualifying can be difficult. For instance, Medicare limits coverage to a few months, while Medicaid’s support requires meeting stringent financial criteria. This limited safety net can place substantial strain on retirees’ finances.
The cost of long-term care can be staggering. The Genworth Cost of Care Survey revelated alarming figures. In 2018, home healthcare averaged $52,624 annually. Assisted living facilities followed closely at $48,612 per year, and private nursing homes were an astounding $102,200 annually. Lacking adequate planning, these costs can obliterate retirement savings.
Equally concerning is the cost of caregiving for a loved one. Many retirement-aged individuals need to provide care for family members, imposing further financial pressures. According to AARP, over half of caregivers have faced career disruptions. Some took leave, while others reduced their work hours. This adjustment affects financial stability, often requiring caregivers to dip into personal or retirement savings. Notably, three in ten tapped personal savings, and more than one in ten withdrew from retirement accounts. Without preparation, these additional costs can severely affect financial security.
Given these realities, it’s prudent for individuals to consider safeguarding their future. Long-term care insurance offers a potential buffer. However, securing a policy during retirement can be prohibitively expensive or not available at all. This obstacle leads many to explore alternatives like life settlements.
A life settlement involves selling a life insurance policy to a third party. In return, the policyholder receives a lump sum, which often exceeds the policy’s cash surrender value. This transaction enables retirees to relinquish premium payments while generating funds for care. The sale proceeds may be directed into accounts that pay for long-term care, easing financial burdens.
We provide a reliable avenue to convert life insurance assets into liquid funds. It ensures retirees can face unexpected financial demands confidently, preserving their wealth for years to come. Furthermore, our clients can leverage our assessment tools to realize the maximum potential of their policies. Our guidance through every step fosters transparency and trust.
