Don’t Forget About This LTC Gap In Your Retirement Planning!

bridge_the_ltc_gapWhen thinking about retirement, Medicare might come to mind. Depending on your prescription drug needs, it is possible you could hit what is lovingly referred to as the “donut hole” where coverage for your drugs stops until you reach the next coverage point.

For many people this gap in prescription drug coverage can cost several thousand dollars, but insurers have come up with options to provide some coverage in the donut hole.

However, the gap we are referring to is not the Medicare donut hole.

The gap we are referring to could potentially cost hundreds of thousands of dollars, leave your estate drained, and cause hardship among your loved ones when reality finally sets in, and the bills come due.

The shocking truth is that most people in the US have failed to plan for long-term care costs. Considering almost 70% require some form of long-term care in retirement, it is hard to believe it goes unplanned.

There is a simple 2-step fix to this issue though.

Step 1 is to determine if there is a gap and how much it is. This can be done quick and easy by using the US Department of Health and Human Services calculator at the following link:

http://longtermcare.gov/savings-calculator/

When you get to this page you will be asked a few simple questions such as your age, your gender, where you plan to retire, the amount you can save each month to pay for future long term care, and the expected rate of return you will get from your investment of that money.

To save you some time, we took the liberty to come up with several calculations and outlined them here:

Female Age 55, Plans to retire in California, Saves $500 per month at 10% return

Your Results

*Cost of care in California (adjusted for inflation): $784,878.00
Your projected savings amount: $649,091.00
The gap between cost of care and your savings plan: -$135,787.00

At Age 50 with same assumptions:

*Cost of care in California (adjusted for inflation): $1,001,725.00
Your projected savings amount: $1,085,661.00
The gap between cost of care and your savings plan: +$83,936.00

Female Age 55, Plans to retire in California, Saves $500 per month at 5% return

Your Results

*Cost of care in California (adjusted for inflation): $784,878.00
Your projected savings amount: $300,681.00
The gap between cost of care and your savings plan: -$484,197.00

At Age 50 with same assumptions:

*Cost of care in California (adjusted for inflation): $1,001,725.00
Your projected savings amount: $418,565.00
The gap between cost of care and your savings plan: -$583,160.00

Male Age 55, Plans to retire in California, Saves $500 per month at 10% return

Your Results

*Cost of care in California (adjusted for inflation): $509,006.00
Your projected savings amount: $649,091.00
The gap between cost of care and your savings plan: +$140,085.00

At Age 50 with same assumptions:

*Cost of care in California (adjusted for inflation): $649,635.00
Your projected savings amount: $1,085,661.00
The gap between cost of care and your savings plan: +$436,026.00

Male Age 55,

Plans to retire in California, Saves $500 per month at 5% return

Your Results

*Cost of care in California (adjusted for inflation): $509,006.00
Your projected savings amount: $300,681.00
The gap between cost of care and your savings plan: -$208,325.00

At Age 50 with same assumptions:

*Cost of care in California (adjusted for inflation)    $649,635.00
Your projected savings amount          $418,565.00
The gap between cost of care and your savings plan  -$231,070.00

Step 2 is also simple. Contact a California Long Term Care Insurance Services Specialist today for a no obligation planning session to help you cover the gap in your retirement plan when it comes to your health.

Fill out the form to the right of this page, download your Free guide and get started now!

*The cost of care was based on an estimate of long-term care spending over remaining life at age 65. The key assumptions are that 69% use some form of LTC (paid & unpaid) with 58% having LTC payments. In 2005 real dollars, for those that use services, the average was $150,000. Women ($166,878) use more than men ($108,180). On average those who use LTC, the average length of use is 4.35 years with 2.3 years being paid.