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Do You Have a Long-Term Care Plan That’s Self-Insuring and Assigns the Risks?


Do You Have a Long-Term Care Plan That's Self-Insuring and Assigns the Risks?

Wisdom is defined in part as the quality of having experience. By definition, only after an experience will we become wise. This is why only our older, eh-hem, wiser selves can look back to our youth and say, “wear sunscreen,” “take care of your body,” “don’t go out with Chad,” or “prioritize date night.”

When it comes to planning for your future, rather than relying on your own wisdom – which comes after-the-fact – rely on the experiences of others instead. Although your 20-year old self couldn’t see the inevitable damage of any SPF, your current self can wise up to an issue your future self is highly likely to experience: long-term care.

Long-term care provides support when you are unable to do two out of six activities of daily living (such as bathing and dressing). 70% of people turning age 65 will expect to use some form of long-term care during their lives. The healthier you are, the higher the chance that you will need help over your (expected) longer lifetime. Yet, having a long-term care game plan is one that many of us don’t want to face. We get it. It’s hard to imagine being dependent on others for our own care and, if we can, it’s too uncomfortable to entertain for long. Instead, we plan for other, more palatable expenses like college funding. Although long-term care costs vary by state, in certain states like California the cost of full-time help could be more than a 4-year education. Absent proper planning, the burden of care will fall on children and loved ones. Watching loved one’s age is an emotional expense alone. A plan to help cover the financial costs should be just as important as college funding.

A long-term care plan may include self-insuring if you have enough income or assets to cover the expense, assigning the risk to an insurance company by purchasing a long-term care policy, or a combination of both. To allow time to accumulate assets dedicated to this need and to help keep insurance costs down, we recommend that you begin planning for long-term care needs in your mid-40s or early 50s. Don’t let your 80-year-old self say, “if I knew then what I know now” about long-term care. Work with your financial advisor to get a plan in place or email us if you need help.


The Wealth Effect: An idea that investors feel wealthier when the value of their investment portfolios rises, making them inclined to spend more. In the past, the wealth effect has explained why investors continued to spend more during times when spending was expected to decline- following a tax rate increase, for example. 

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