Guidance

RESOURCES TO HELP SHAPE YOUR FINANCIAL FUTURE

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Jeffry P. Kraus
Senior Vice President
Wintrust Investments

One major risk to any investor's accumulated savings is the potential burden of paying for long-term care (LTC) late in life, after the earning years are over.

A great investment plan identifies probable risks to an investor's fiscal well being and then provides solutions designed specifically to mitigate—or even eliminate—those risks over the life of the investor.

An individual is considered a consumer of LTC services when they can no longer perform two of the six activities of daily living; bathing, continence, dressing, eating, toileting, and transferring (moving from bed to chair). Long-term care insurance may be put in place to provide some or all of the cash necessary to meet these needs. Today, 70% of people over age 65 require long-term care services, and the likelihood of needing care increases as individuals age. In 2011, nursing home care topped more than $87,000 a year, a burden Medicare and most health insurance plans do not pay for, and Medicare will not pay for any home health care or assisted-living costs.

Some individuals may feel that they have sufficient funds to "self-insure," that is, to pay costs as they are incurred. A downside to self-insurance is that it may force the liquidation of investments at an inopportune timewhen markets are down. There may also be tax implications from realized capital gains due to a sale. A viable planning solution may be long-term care insurance to provide a cash benefit to pay for LTC needs. Benefits are paid once an individual meets the qualifying criteria. The most popular plans allow for both in-home care, assistance of qualifying individuals, and benefits available for nursing home care.

LTC should be a top concern among adults, yet only 5-6% own a long-term care policy. With rising health care costs, an aging population, advances in medicine extending life expectancy, and dwindling retirement nest eggs, LTC insurance is a safe, secure option for many. Planning ahead allows older adults to have more control over their future.

Meet with one of our Financial Advisors to learn more about LTC options and what would be best for you and your family.