Happy Halloween! You may not believe in ghosts and goblins. Unfortunately, many also don’t believe in this real-life bogeyman: having their retirement nest egg wiped out by the all-too frightening expense of a disability or long-term care situation. An alarming number of working-aged individuals are forced out of the workforce due to disability, while the majority of retirees will need long-term care at some point – and most people are frighteningly unprepared for the resulting costs.
Warning – the following facts and figures are the stuff of financial nightmares.
Disability: A frighteningly common reality.
For the average 20-year-old, the thought of becoming disabled may seem unthinkable. However, the Social Security Administration (SSA) says that one in four 20-year-olds is expected to experience disability before reaching retirement age.
A cancer diagnosis or traumatic injury may just be the beginning of a financial nightmare. For serious illnesses and injuries, the treatment and recovery process can take months, if not years. During that time, people may not be able to work, but the medical bills and normal expenses keep piling up.
Long-term care: A spooky retirement nightmare.
For working aged individuals, the lost wages may be the scariest possibility. For retirees, it may be drained retirement savings.
The Administration for Community Living (ACL) says most people will need long-term care at some point, and people turning 65 today has a nearly 70% chance of needing long-term care in their remaining years.
Health insurance doesn’t typically cover long-term care, so this can quickly turn into a financial nightmare. Even the most perfectly planned and diversified investment portfolio won’t ward off the spine-chilling risk of a long-term care event.
Consider these scary odds:
- Odds the plane you’re on will crash: 1 in 1.2 million (The Week)
- Odds of being killed by a shark: 1 in 3.75 million (Business Insider)
- Odds a 65-year-old will need long-term care services at some point: about 7 in 10 (ACL)
- Odds a 20-year-old will experience disability before reaching retirement age: about 1 in 4 (SSA)
Many people are afraid of things like plane crashes and shark attacks, but the numbers make it clear that disability is the true threat.
The costs are spooky too.
While advances in medicine have allowed us to conquer many ghoulish illnesses and live longer, they’ve also increased our need for care when we’re old.
For example, advances in cancer treatments have increased the odds of survival. That’s undeniably a good thing, but it comes at a literal cost. According to the American Association for Cancer Research, the cost of cancer care in the U.S. is expected to go from $183 billion in 2015 to more than $245 billion by 2030, an increase of more than 30% in just 15 years.
Long-term care is also expensive. The ACL says a semi-private room in a nursing home can run $6,844 per month on average. The average nursing home stay is one year, so that’s more than $82,000.
Don’t shield your clients from the scary truth.
Have you educated your clients about these REAL financial nightmares? Don’t wait. Add DI and LTCI to your bag of treats, download these spooktacular client handouts today:
Four Compelling Reasons for Paycheck Protection
10 Facts to Know About Long-Term Care
