Let’s get the bad news out of the way. The numbers don’t lie. There is a huge difference between what people need for a financially secure retirement and what they are saving. Adding to the problem is the perception by many that long term care services likely won’t be needed in their particular case, when reality tells a different story.
Facts: The U.S.A. is an aging population with a declining life expectancy, and limited financial safety nets. Many individuals are underestimating retirement costs and carry too much debt. Social Security does not provide enough to live on, and Medicare has significant costs.
The good news is that there are a number of legislative actions being discussed to address this Long Term Care (LTC) growing crisis. 1.) The Secure Act, if passed, would automatically enroll employees in a 401k, funded with 3% of their salary (with an opt-out option.) 2.) Medicare will likely ease Part B premium increases by restricting expensive medications to only those in clinical trials. 3.) There is regulatory support for those wishing to pay for long term care with LTC Life Settlements (using future life insurance proceeds to pay for LTC today.) Life Settlements will save Medicaid millions. The Baby Boomer population is turning to Reverse Mortgages and Life Settlements to fund their LTC.
COVID’s silver lining is that it has increased the value of insurance in the public’s eye. Purchasing LTC insurance today will avoid the necessity down the road to fund our long term care through reverse mortgages, or using future life insurance proceeds initially meant for a loved one after our passing.