Long-term care is vital to any individual’s retirement plan. However, many do not even broach the topic while speaking to their trusted financial planner, either because they underestimate the true costs of assisted living, or because they do not wish to speak of something so uncomfortable.
However, it is a service that nearly everyone in our nation will need at some point during retirement. According to a study conducted by the U.S. Department of Health and Human Services, more than 70 percent of Americans over the age of 65 will need long-term care services at one point or another.
Additionally, the costs of these services have skyrocketed over time. A 2017 survey conducted by Genworth Financial revealed that, this year alone, the annual average cost of services has increased by approximately 4.5 percent. Furthermore, the cost of a semi-private room in a nursing home rose 4.4 percent to $89,000 a year, while a private room increased 5.5 percent to nearly $98,000.
Therefore, it is imperative that one not only includes this necessity in their retirement planning process, but searches for diverse options as well.
With that in mind, let us discover the importance of seeking a second opinion in long-term care planning.
A second opinion could prevent you from making common mistakes
The most common mistake in retirement planning is assuming Medicare will cover a majority of one’s costs. After all, assisted living care often falls under the umbrella of medical care, so it would be logical for it to be covered.
However, more often than not, Medicare and even basic insurance plans — including Medigap, a Medicare Supplemental Insurance program — do not pay for advanced services, as they are often labeled “custodial care.”
A trusted and trained financial planner would point this out to a client immediately. However, seeing as so many individuals believe they are capable of forming a retirement plan on their own, they may not even set foot in a financial planner’s office.
A second opinion could prevent you from falling victim to scams
Unfortunately, it is not uncommon for individuals to fall for financial scams, regardless of their age. In recent years, this has become all the more common, with faux, unlicensed financial representatives cornering retirees and convincing them they have few or options for securing a comfortable retirement. These claims are also accompanied by suggestions like placing their homes in a trust and even spending a majority of their retirement savings to ensure they are eligible for Medicare coverage — which we already determined does not pay for extensive long-term care coverage.
By taking a step back and bringing the contents of such a conversation to a trusted financial planner, you will not only save yourself from the harassment of unsolicited agents, but from putting your entire retirement fund on the line as well.