Don’t be The Person Who Says…

“If I had a known I was going to live this long, I would have done things differently.”

Hindsight is 20/20, and while none of us has a crystal ball to tell the future, we do know three things. 1) We are going to live. 2) We are going to die. 3) And we may be disabled in the meantime. Whatever circumstances life deals us, we need to be prepared. There are four primary risks that must be considered when planning finances for a lifetime.

  1. Outliving your money. You can expect to spend as many years in retirement as you did working. Will your resources last a lifetime?
  2. Cost of living increases. At 5% inflation, the cost of living doubles every 15 years. If your retirement lasts 30 years and starts with a lifestyle maintenance of $24,000 in year one, it will cost $96,000 in year 30!
  3. The rising cost of healthcare. An obvious and relentless challenge for all of us.
  4. Leaving a spouse impoverished. Tragically, it happens, but it doesn’t have to happen to you.

The good news is, that with proper financial guidance, all of these potential problems can be minimized or even eliminated.

If It’s to Be, It’s Up to Me

We know that based on our aging population, our government will not be in a position to provide the financial support and services that we will need as we age. Medicare and Medicaid benefits are being scaled back every year. That is why you must know and understand what strategies and programs can be put into place now to ensure your resources last a lifetime. Consider the following tools:

The Power of Medically-Underwritten, Single-Premium Immediate Annuities

Mrs. Jones is 86 years old and has been diagnosed with Alzheimer’s Disease. Her life savings of $300,000 was earmarked for her children, and she does not want to spend it down for her own care. Through a medically-underwritten, single-premium immediate annuity, she can reposition $134,000 of her savings that will provide her with the extra $3,000 a month she needs for her lifetime care and still leave $166,000 for her family. Annuities like these represent an excellent way to shift some of the risk of outliving your money to an insurance company. These annuities are evaluated on an individual basis so you need to work with a licensed life insurance agent.

Long-Term Care Insurance

Long-term care insurance is one of the best strategies to address the cost of paying for long-term care at home or in a senior care community. Statistics show that more than half the people over the age of 65 will spend some time in a nursing home.1 According to the National Center for Health research, four out of five couples will have a spouse who requires nursing home care. 2 Shifting this expensive risk to the shoulders of an insurance company by purchasing a long-term care insurance policy can be a fiscally sound move.

Asset-Based, Long Term Care Coverage

Another form of long-term care coverage is asset-based and uses a life insurance policy that allows you to access the death benefit in the policy to pay for long-term care benefits. If those benefits are not needed, then the life proceeds pass to the heirs. If you change your mind, you can surrender the policy and receive the cash surrender value. These plans require medical underwriting, so if you have health problems, you may not qualify.

The Reverse Mortgage

A study released by the National Council on Aging (NCOA) shows that reverse mortgages can be used to pay for long-term care expenses at home, allowing many to remain independent and in their homes longer. For more information on reverse mortgages, visit www.aarp.comwww.ncoa.org, or www.reversemortgagenation. com.

Don’t Delay. Call Today!

Talk with a qualified professional to learn about all of your options before you need them. Be proactive! The industry is changing and financial services professionals spend a great deal of time educating themselves so they can better inform you of the options and programs available to help your resources last a lifetime.

About the Author

Lamy Brodhead-Buck provides creative financial services to help those already retired and those that will be retiring soon. She graduated from the University of Florida in 1985 with a B.S. in Finance. Life and health insurance licensed in 1986, securities license (series 6 and 63) in 1989, became a CSA (certified senior advisor) in 2002 and a certified reverse mortgage specialist in 2004. Call for a Free Booklet “Retirement Risk Matcher”(1) to help understand the major risks people face in retirement, call Lamy Buck at Next Generation Financial Services, (912) 728-5600, or email lamybuck@hotmail.com.