Question
In the video, “The top 7 retirement planning risks”, select one of the risks and tell me how you think that this particular risk could be addressed in a retirement plan.
Post by classmate
I recently retired from the military and started my second career. Knowing that I have a retirement income until I pass is nice however there are many things that I have overlooked. One of those things is a long-term care plan. I have two friends that are currently trying to figure out what to do with their parents that are going through dementia. One of them has a very robust long-term care plan that will cover up to about $9,000 a month. This is approximately $300 a day for a treatment facility. Although she has a long battle with medical issues she is lucky because her husband made plans to ensure she was taken care of before he passed. As I started doing some research I found that the average daily cost for this type of care in the Baltimore Maryland area is about $220 a day with the national average around $184 a day (The Federal Long Term Care Insurance Program, n.d.). The real issue when planning for a long-term care plan is the time of money increase that we need to plan for. The national average in 2041 will be around $305 a day for long-term care. When going off of the 2021 average it will cost around $67,000 a year if you need long term care. I wasnt able to get an exact quote but I found that the average cost for a policy is around $3,000 a year for a couple who was about 55 and in average health. These costs will drastically change if there are any underlying health conditions (Phillips, 2021). The problem with long-term care plans is that if you dont need them you essentially lose out on that money. With a solid retirement plan you would be able to combine different annuities to help cover the costs. Some of these annuities are specific for long-term care and if the owner of the policy does not need the care when they pass the remaining balance will be given to their heirs (Tarver & Rhinehart, 2021). In the end as long as we think about these different risks and have a plan we will be better off than just ignoring them all together.
