For current and soon to be retirees, healthcare costs are expected to pose the single greatest risk to retirement income. A recent study reported a 65-year-old healthy couple retiring in 2015 can expect to pay an average of $394,954 in healthcare costs in retirement. For a 55-year-old couple retiring at 65, total lifetime healthcare costs are projected to increase to $463,849 on average. *
For many retirees, Long-Term Care (LTC) insurance can offer a safety net for their retirement income in the event of illness or incapacity. Clients often voice concerns when it comes to LTC insurance, such as if they can qualify for a traditional Long-Term Care insurance due to age or current health factors. Some are reluctant to pay for coverage that may never be used in what many call a “use it or lose it” scenario.
The good news is options for LTC planning have become more flexible in recent years. There are alternatives to traditional LTC policies, including life insurance and annuity products with LTC riders. An alternative strategy specific to Life Insurance** is to swap accumulated cash value of an older policy for a hybrid policy that would offer a death benefit and LTC benefits. If benefits aren’t used for care, the policy eventually will pay a death benefit, avoiding the use it or lose it scenario. Perhaps it’s time to mitigate your retirement risk?
About the author: Scott Jones, CRPC®, RFC®, Founder & Financial Advisor with Genesis Wealth Advisor Group, LLC. Genesis Wealth Advisor Group is located Mount Laurel, NJ and specializes in retirement, multi-generational wealth & estate planning. Learn more at: www.genesisadvisorgroup.com.
*HealthView Services: 2015 Retirement Health Care Costs Data Report. Projections assume: life expectancy of 87 for the male, 89 for the female, and an MAGI income level below $170,000; Medicare Parts B and D coverage and a supplemental insurance policy; insurance premiums for medical, dental, vision; co-pays; and out-of-pocket expenses.
**The cost and availability of life insurance depends on factors such as age, health, and type and amount of insurance purchased.