Affluent people often tell me they don’t need long-term care insurance (LTCi). They’ll self-insure, instead. This is contrary to my experience.
Traditional retirement planning typically calls for a gradual drawing down of savings to produce retirement income. Contrary to this long-held belief, a recent study published by Employee Benefit Research Institute (ERBI) proves otherwise. In fact, affluent retirees do not want to spend their money!
As illogical as it sounds, this is a point I have been writing about for years. Retirees find great comfort in the size of their nest egg and there is too much uncertainty in their future.
ERBI’s new study shows affluent retirees (with over $500,000 in non-housing savings) had only spent down 11.8 percent of their savings within the first twenty years of retirement. This is far less than projected. In fact about one-third of sampled retirees increased their assets over that period.
Relaxing About the Future
My strong opinion, based on nearly 30 years of client observation, is this: LTC insurance ownership releases people from an ever-present gray storm cloud of a possible LTC need looming on the horizon. The gray cloud grows ever larger with each passing year. Let’s call it the LTC Storm Cloud. It’s caused by fear of an unexpected, unplanned for, possibly catastrophically expensive “Spending Shock“, caused by a chronic long term care need.
An AHIP study released in 2014 (email me at firstname.lastname@example.org for the actual study) confirms LTC insurance owners get 35% more hours of care, as well as many additional advantages, such as increased independence and dignity, decreased financial stress, higher quality family relationships, and the list goes on.
The reason LTC insurance owners obtain more care is because they’re not paying for it out of their income or savings.
I see people denying their true need for care all the time. Often, it’s because they have the money for it, but just don’t want to spend it. They’re afraid of losing their wealth. Don’t let this happen to you!
When you’re ready to get some peace of mind about your future needs, click here to receive a no-obligation quote for your personal LTCi policy.