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Aug 03

The Biggest Retirement Concerns – Do You Agree?

A 2014 survey by LifeHealthPro, Legg Mason and Nationwide Financial reports these top five concerns:

1) Having a catastrophic event that uses my retirement funds

2) Living longer than retirement funds last

3) Government not following up on obligations

4) Not saving enough for retirement

5) Low interest rate environment

They seem to come down to this one: outliving our savings…what do you think?

And why could that happen? Of course I’m going to tell you that it could easily happen if you need long-term care and you haven’t prepared for it. If you don’t have a long-term care plan, you haven’t prepared. Notice I didn’t say insurance. I said “plan”.  What is your plan?

  • you will self-insure? Then you should have at least $1,000,000 set aside for this and if you do, that’s great. Using the historical rate of inflation for LTC of 5-6% a year, that’s how much 3 1/2  years of care will cost in about 25 years. I’m using 3 1/2 as that’s the average length of care for care that lasts longer than a year according to the Society of Actuaries LTC Experience Intercompany Study (Appendix E-1), June 2011.
  • your family will take care of you? Which one will quit a job to be your 24/7 caregiver? Even your spouse has to sleep and go to the grocery store. Many of you have taken care of your parents and you know exactly what I’m talking about. Do you really want to be the person responsible for the toll your care will take on the family member who winds up as your primary caregiver?
  • the government will pay? Good luck with that one. With the dramatically declining ratio of workers to retirees, at some point we have to wonder how there will be enough taxes to pay for education, law enforcement and road building, much less long-term care for the millions who don’t have a plan.

 

 

 

 

 

 

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