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September 2011 Edition Perspective
- 1. SEPTEMBER 2011 A Long-Term Care Primer Although your retirement savings — and your family — can be affected profoundly by market volatility or another recession, the need for long- term care can be even more catastrophic. No matter what triggers the need for care — a specific illness, an accident or age-related frailty — the financial and emotional costs Brian D LaHue can be significant for long-term care Financial Representative recipients and their caregivers. (812) 738-2198 WHAT IS LONG-TERM CARE? As Americans grow older, many suffer from blahue@lincolninvestment.com chronic illnesses, physical disabilities or cognitive impairments. Such conditions create a need for assistance with daily activities such as bathing, dressing, preparing meals and other tasks — that assistance is called long-term care. WHO NEEDS LONG-TERM CARE? Average Daily Cost Many Americans are expected to need long-term care at some point in their lives:1 of Long-Term Care $215 • 40 percent of all people receiving long-term care are ages 18 to 64 Nursing home (semi-private) • 40 percent of older people will need care in a nursing home Assisted living facility $194 Home healthcare • 70 percent of people over age 65 are expected to need long-term care services $190 $180 WHO PAYS FOR LONG-TERM CARE? One-third of adults believe that private health insurance, Medicare or Medicaid will cover long- $168 $147 term care costs. This is false. Long-term care costs are primarily paid out-of-pocket by the $160 individuals who receive the care or their families.1 $144 For long-term care recipients:2 For family caregivers:2 • $14,000 spent out-of-pocket, on average • $8,000 spent out-of-pocket, on average (excluding facility costs) (excluding facility costs) $108 $106 • 88 percent of recipients had household • 63 percent of caregivers had household $95 income fall by one-third, on average income fall by one-fourth, on average • 63 percent of recipients spent about • 61 percent of caregivers spent about $75 two-thirds of their savings two-thirds of their savings LONG-TERM CARE INSURANCE CAN PROTECT YOU AND YOUR FAMILY Long-term care insurance can help you meet the expense of a long-term care event. Experts suggest that the best time to purchase a long-term care policy is in your 50s, when you are in good health.3 Not all policies provide the same benefits, so it is important to discuss which policy may best suit your needs. 2004 2006 2008 2010 1 Kiplinger.com, 10 Things You Should Know About Long-Term Care, 2011 Source: AARP Data from the National Long-Term , 2 Genworth Financial, Beyond Dollars: The True Impact of Long Term Caring, September 30, 2010 Care Survey, September 2010 3 Reuters Money, The Best Time to Buy Long-Term Care Insurance, November 18, 2010
- 2. PERSPECTIVE | SEPTEMBER2011 2 The Ups and Downs of Managing Your Parents’ Money Middle age isn’t what it used to be. Today’s 50- • Understand the scope of the responsibility. somethings are vital, energetic and adventurous. Depending on your parents’ capabilities, you They can expect to live longer and healthier lives may need to pay bills, monitor credit cards, than their parents, who are expected to live to track checking accounts, sort mail and cull age 78, on average. As a result, 50-somethings e-mail to avoid fraud. In some cases, you may may need to keep a closer eye on their aging need to help your parents develop a spending parents than previous generations did. If disease plan and provide a weekly allowance. Make or mental infirmity occurs, they may need to step sure you communicate thoroughly with your in and help manage their parents’ money. If you siblings, so they understand what you are POWER OF ATTORNEY find yourself in this situation, here are a few tips doing and why. If a parent is in the early that may help: • Collect key information. Over time, you will stages of Alzheimer’s • Preserve your parents’ dignity. If you see piece together the fragments of your parents’ disease, it can be a good signs that your parents’ ability to care for finances. Gather key documents and make a idea to establish powers themselves is declining — uncharacteristic list of critical information, including doctors, of attorney for financial disorganization, unpaid bills, medical histories, accountants, financial expired food in the fridge, and health matters. A advisors, bank and investment accounts, an unusually messy house power of attorney social security numbers, tax forms and — talk with them about authorizes you, or your concerns and offer pension sources. another party, to make assistance. Taking over the management of your decisions for your parents’ money is not a simple task — • Transition slowly. parent. If a power of Don’t step in and take recognizing that parents are in declining attorney is not over everything at once. health is hard. Broaching the topic of Choose one financial providing financial assistance is designated while your responsibility, like completing complicated and accumulating full financial parent is competent information often takes a long time. Regardless tax forms, and offer your help. By helping with then legal guardianship of all the drawbacks, it’s a lot easier than stepping taxes, you can learn more about your parents’ may need to be in after your parents’ wealth has been lost to finances and initiate discussions about topics established in court. that might otherwise be difficult to introduce. fraud or careless management. © 2011, Lincoln Investment Planning, Inc. • Registered Investment Advisor • Broker/Dealer Member FINRA/SIPC • 218 Glenside Avenue, Wyncote PA 19095 • www.lincolninvestment.com P129_09/11 First Harrison Bank 220 Federal Drive NW PO Box 130 Corydon, IN 47112