Making Long-Term Care Part of a Client’s Financial Strategy

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During October and November, the financial services industry highlights long-term care planning. This focus offers financial advisors and the wealth management programs at financial institutions the opportunity to sit down with clients and review their strategy for long-term medical care. While the level and duration of long-term care is unique to each client, most any kind of care will impact a client’s financial plan for retirement. To help prepare for that discussion, review these key statistics from LongTermCare.gov.

Important facts to share with clients

• 70% of adults turning 65 today will need some kind of long-term care services.
• One-third of today’s 65-year-olds may never need long-term care support, but of that third, 20% will need support for more than five years.
• On average, women need care longer (3.7 years) than men (2.2 years).
• The national annual median costs of care ranges from more than $20,280 a year for five-days-a-week adult day care healthcare services to more than $108,000 a year for a private room in a nursing home.*
• Medicare only covers up to 100 days of care in a skilled nursing facility. 

Depending on the type and duration of care a client needs, the cost of care cited above can significantly impact a client’s retirement savings, especially if they do not have insurance to help cover the costs. As clients age, their views on their finances change. It’s a good idea to talk with your clients to better understand how you can help them adjust.

Consider discussing these issues with clients:

• Do they have insurance that can help cover long-term care costs?
• Is a spouse or family member available to provide or supplement care?
• Have they explored options for care in their area?
  • Nursing home facility
  • Assisted living facility
  • Are adult day care services or home health aides preferred?

Balancing retirement goals with how clients answer these questions can help you better determine what changes you may or may not need to make to help your clients.

“Planning to self-fund a long-term care event may look good on paper for some, but that quickly changes the day your client requires care,” says Brian Varian, LPL’s assistant vice president for Long-Term Care Consulting. “Now is a great time to broach the subject with clients on more efficient ways to co-insure long-term care risk and avoid depending on assets under management to fund the entire expense.”

Varian also encourages LPL advisors and financial institution partners to visit the LPL Resource Center for additional long-term care information, ideas, and strategies “for inspiring more meaningful conversations with your clients.”

*Cost of Care Survey, Genoworth.com