How Can I Protect My Retirement from Health Tsunamis?

Disasters are not just weather related.

When you think of disasters, you probably think of floods, earthquakes, hurricanes, fires, or even tsunamis.

Reports of them from around the globe are regular fare on 24-hour cable news programs.

Such disasters affect the financial fortunes of thousands of people at one time, let alone life and limb.

According to a recent Kiplinger article titled “Disaster-Proof Your Retirement Plan,” long-term care needs and market performance can be financially disastrous closer to home for retirees.

Preparation and planning are necessary.

If you have not started, you should begin now.

Before retirement.

You will always be busy.

There will always be excuses.

Push past these.

Why?

If you are age 65 or older, then there is a greater than 50 percent chance you will need long-term care.

Your assets will take a hit and could leave your widow vulnerable.

Why?

Care can cost about $10,000 per month, depending on where you live.

Around the Kansas City metropolitan area I am seeing folks fork over $8,000 each month in basic "memory care" settings.

And Medicare will not cover long-term care expenses.

To avoid spending down assets, you should consider long-term care insurance.

Get this while you are in your 40s or 50s and are still health.

What if you are in your 60s and premiums do not appeal to you?

Consider purchasing a single premium life insurance policy or annuity with a long-term care rider.

You could also get an income-based annuity.

In addition to a long-term care tsunami, protect your investments from being wiped out and thereby threatening your financial security.

One way is to set aside some money (yes, a bit more than is in your "rainy day" fund) in savings.

After calculating your annual expenses, consider setting aside enough for four years into safer and more stable investments.

These can help your money grow while providing a safety net.

You cannot predict your future.

But you can prepare for it.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Kiplinger (January 29, 2018) “Disaster-Proof Your Retirement Plan”