- 70% of seniors 65 and over will need long term care in their lifetime.1
- Caregiving is costly in time, money, and emotional drain.
- When faced with taking on a caregiver role, clients will need a financial strategy.
A debilitating illness or injury of a family member can send a client’s current lifestyle and financial plans into a tailspin. Suddenly, new arrangements need to be made to provide care and cover the cost. As a financial professional, you are in a unique position to help your clients strategize what funds could be used to cover a potential future crisis.
It’s a challenge most people will face at some point in their lives. According to the U.S. Department of Health & Human Services (HHS), “70% of seniors 65 and over will need long term care in their lifetime.” 1 For your client, that usually means a parent or spouse.
When a client is suddenly faced with taking on the role of a caregiver, they must decide if they can manage it themselves or hire professional help.
A recent survey2 shows that many Americans expect their spouse or children to take care of them if the need arises. But the reality is, caregiving can cause a tremendous strain on a family member in the form of time, energy, emotional stress, and personal finance. See what the unexpected twists and turns in your clients’ journeys can look like.
It’s estimated that about 44 million Americans provide 37 billion hours of unpaid, "informal" care each year.3 This, of course, will also impact their finances as many will have to reduce their work hours to make time for caregiving.
The alternative is hiring help to provide care, which can also be costly. According to Genworth Financial’s 2017 Cost of Care Survey,4 “the average assisted living facility in the U.S. costs $3,750 per month, or $45,000 per year. The average nursing home costs $235 per day, or $85,775 per year, for a semi-private room and $267 per day, or $97,455 per year for a private room.”
So where can you provide value and assistance to help your client navigate this situation? Getting ahead of it can be a good start.
Make sure your client has discussed long term care with family members. Clients should know what funds are available to cover costs, and if they would prefer to go into an assisted living facility or receive care at home. Having this sorted out while everyone is still mentally and physically healthy will save stress when the time comes.
Long term care insurance
Encourage your clients to look into long term care insurance to make sure some monetary protection is there for an unexpected illness or injury. Some may find that this insurance is too costly once a family member is in their senior years, so it’s best to get it sooner than later.
Make sure your client is on a regular saving and investing track. Stress the importance of emergency savings and having the funds to cover long term care needs that aren’t covered by insurance.
Health savings account (HSA)
If your client doesn’t already have one, suggest an HSA account. This will allow them to make tax-free contributions and withdrawals to cover medical expenses. Premiums for long term care insurance, services provided, and medical equipment can be paid with HSA funds.
Care for the caregiver
Remind your client to take care of themselves to avoid stress and more healthcare bills. Your client may be thinking of quitting their job as caregiving needs increase, but encourage them to keep working, if only part time, to maintain a sense of normalcy and provide financial support.
Be part of their support network
When a client becomes a caregiver, they will need support in a variety of ways. When they know they can turn to you to help with their Wealth + Health strategy in this difficult time, you build trust not just with the client, but with their entire family, and that support speaks volumes.
Things to Consider:
- Most clients will need to provide care to a parent or spouse at some point in their lifetime.
- Clients facing a caregiving role will need to know what funds can cover the cost.
- Putting a financial strategy together early, before it’s needed, is the best path to protection.
1 “Caregiver Resources & Long-Term Care” HHS.gov, July 2017
2 “Long-Term Care Needs Not Included in Future Financial Plans for Many,” Plansponsor.com, March, 2018 3 “Caregiving,” Family Caregiver Alliance, accessed October, 2018
4 “Cost of Care,” Genworth Financial, 2017
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, legal or financial advice or guidance. Please consult your personal independent advisors for answers to your specific questions.