Preparing for extended care is a critical aspect of retirement and financial planning, yet it’s often overlooked until it’s urgently needed. The reality is that an extended care need can happen to anyone, regardless of age, due to accidents, chronic conditions, or the natural aging process. As financial professionals, it’s important that we offer guidance and recommendations to our clients throughout the different stages of life.
For Clients in Their 20s and 30s: Build Awareness and Financial Foundations
While your client might feel invincible in their 20s and 30s, accidents or unexpected illnesses can happen at any age. Beginning to plan for long-term care now gives them more time to prepare financially and protects them from potential financial hardship.
- Understand the Basics: Educate your clients about long-term care services and costs, including home care, assisted living, and nursing homes. Help them to understand Medicare and Medicaid and how they fit into planning for long-term care.
- Start Building Emergency Savings: Encourage them to establish an emergency fund that can help cover unexpected medical or caregiving costs.
- Consider Disability Insurance: Discuss the importance of a disability insurance policy, which can provide income if your client becomes unable to work due to illness or injury.
- Adopt Healthy Habits: Recommend that your client stay active, eat well, and manage stress as this can reduce the risk of chronic conditions later in life.
Read More: 3 Reasons to Start Long-Term Care Planning Sooner
For Clients in Their 40s and 50s: Evaluate Risks and Expand Their Plan
This is the stage where your client’s risk of developing chronic conditions begins to increase, and they may also find themselves caring for aging parents. It’s a perfect time for your clients to refine their long-term care strategy.
- Assess Family Health History: Understanding your client’s genetic risks can help them anticipate potential care needs.
- Purchase Long-Term Care Insurance: Premiums are more affordable when purchased at younger ages and while your client is in good health.
- Start a Health Savings Account (HSA): If your client has a high-deductible health plan, an HSA allows them to save pre-tax dollars for medical expenses, including future long-term care.
- Create or Update Legal Documents: Ensure that your client has a will, power of attorney, and healthcare directives in place.
Read More: Are You Discussing Retirement Planning Needs with Clients?
For Clients in Their 60s: Secure Their Care Strategy
As your clients approach retirement, the likelihood of needing long-term care increases. This is the time to solidify their plans and ensure their resources align with their goals.
- Review Insurance Options: If your client doesn’t already have long-term care insurance, explore hybrid policies that combine life insurance with long-term care benefits or a short-term care insurance policy.
- Evaluate Housing Options: Discuss whether your client will age in place, move to a retirement community, or relocate near family.
- Plan for Medicaid Eligibility (if necessary): Explain the asset limits to your client and investigate legal strategies for preserving wealth while qualifying for Medicaid if they have not purchased an extended care insurance policy.
- Discuss Plans with Family: Ensure clear communication between your client and their loved ones regarding preferences for care and financial arrangements.
For Clients in Their 70s and Beyond: Stay Flexible and Proactive
By this age, your client’s focus should be on managing current health needs and ensuring their care preferences are well-documented.
- Regularly Review Your Client’s Plan: Health and financial circumstances can change, so revisit your client’s care strategy annually. If your client has not purchased a long-term care insurance policy, it’s not too late. A 1035 exchange from life insurance, annuity products, and pension/401k accounts can help pay for LTCI premiums on hybrid policies.
- Simplify Finances: Your client should consider consolidating accounts and simplifying estate plans to make them easier for family members to manage.
- Stay Connected: Encourage your client to remain socially active. Social connections are crucial for emotional well-being and can reduce the risk of cognitive decline.
- Monitor Cognitive Health: Recommend that your client stays proactive about memory and cognitive screenings to catch issues early.
Read More: Agent Goals for Retirement and Long-Term Care Planning with Clients
Planning for long-term care is a lifelong process. By addressing this topic early with your clients and revisiting their plans regularly, you can reduce stress for them and their loved ones while ensuring their needs are met. Remember, the best time for your client to start planning is today—no matter their age.