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With a Long Term Care Event; Consider the Unintended Consequences

Jun 27, 2013

As a financial planner, much of my work involves the analysis of numbers and the pictures they paint to help my clients see their global financial situation and make informed decisions about their financial wellbeing.

A long term care event can mean a significant financial obligation for a family and must be considered as part of a financial plan. The best retirement plan is destined to fail without a plan for a long term care event.

You need to understand the consequences of having no plan for a long term care event. The potential financial impact can be frightening and overwhelming when reviewing long range financial projections of potential costs of care. Reviewing financial projections 10 to 20 years into the future of long term care costs can sometimes have the appearance on paper of a distant possibility of actually happening. This perspective comes into play even more so when there is a cost today to set a long term care plan into place to address the possible future costs.

Unfortunately we do not know if, when or even how much care we will need as we age. At this point it might be easy to say “that will never happen to me or us so we do not need a plan or long term care insurance” or “my family will take care of me”. Maybe some of these will actually come true but what if you do age (not so gracefully) and need long term care services? Does your family know they have been designated as care givers when the time comes and do they understand what this means? By avoiding planning for a long term care event, your plan by default is no plan. In this case understand the consequences of no plan when you and your family are facing an actual long term care event.

What was once a possible future cost outlay for a long term care event is now actually happening. There are also important hidden costs to a long term care event; the unintended consequences to the emotional and physical well-being of the family caregivers who surround the person needing care.

Here is a snapshot of a typical long term care event for a family with no plan of care:

If you are the first spouse in your family in need of long term care, the family will respond because there will be a compelling reason to respond out of love and care services will be set into place which may result in the following:

  • Make healthy spousal caregivers sick or ill trying to meet needs of care and trying to keep up with all other household affairs,
  • May force children to put their personal life aside to help provide care which means their family suffers emotionally, physically and even financially,
  • Stresses sibling relationships and can tear them apart; siblings have different perspectives on caregiving and who should do what to help mom and dad,
  • Paying for the care of a sick spouse may deplete the financial assets for the healthy spouse leaving them financially destitute requiring more support from children or other family members.

Know and understand the consequences of a long term care event and no plan. Having no plan has significant financial costs and hidden unintended costs to your family. The consequences are 100%. The risk of a long term care event occurring is not reduced by planning for a long term care event. However, setting into place a plan for care helps mitigate the unintended financial, emotional and physical consequences to your family of a long term care event.

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