By: Mark D. Milbrod, CLU, CLTC
Vice President, ASG
A weather forecast is always helpful. It helps us prepare for events that can severely impact our lives. That’s why millions of us look to The Weather Channel when there is a storm coming. We want to know the facts. We want to know what is headed our way so that we can not only stay safe, but properly prepare so that we can mitigate risk.
The Boomer generation is facing a huge crisis that we refer to as “The Silver Tsunami.” By the year 2030, the last of The Baby Boomer Generation will be turning Age 65. It is projected that there will be over 72 Million older Americans over the age of 65. Of that, it is predicted that 70% of them will require some type of Long Term Care and over 40% will need a nursing home at some point in time.
The math is staggering.
If nothing is done to prepare for this, it is apparent that many lives will be changed. Not only will the seniors requiring this care be affected financially, but the families around them will be as well. After all, less than 10% of the care provided will be from paid caregivers. So, what does that mean? Family members will be providing the large majority of care which will have a negative financial impact on them as well. Considering that almost 50% of children of retirees expect to eventually take care of their parents, it is even more impactful.
So, where is the money coming from to pay these expenses? Sure, it can come from personal assets, but we all know how that story ends; it’s gone before you know it. Why would anyone want to deplete a lifelong nest egg and sacrifice all they have worked for and built over the years when there is a better, more economic approach to mitigating that risk?
In the context of planning, I want to share my personal story of losing my dad last year. My brothers and I had put together a plan for my dad that would ensure that his final expenses were covered through a life insurance plan. In addition, we put a Long-Term Care plan in place. Making a long story short, having these two pieces in place avoided what could have easily been an even worse situation.
After sustaining a life changing injury several years prior, my dad had to go to into an Assisted Living Facility. His Long Term Care policy covered ALL of his expenses and he was able to live with dignity for the last three plus years of his life.
As a side note, having these policies in place and having his living expenses covered under his LTC policy, we were able save a nice sum of money for him. Couple that with his life insurance policy, my brothers and I were spared from what could have been a catastrophic financial burden for all of us.
As an added (and unintended) bonus to the planning that we did, in the end, my dad was able to leave a modest legacy to each of his eight grandchildren. This is something he never knew was an option, but I am sure he is looking down smiling knowing that “HE” was able to leave this special gift from Grandpa.
The point in all of this has to do with proper planning. Just like preparing properly for a storm, sound financial planning can help mitigate some of those “what-ifs” that life throws at us.
The products we sell really work. My dad’s story is proof of that.
Think about your own situation and the many clients that you serve. How can you help them prepare for the financial storms that can wind up on their forecasts?