What is Long Term Care?

This topic is one of the most misunderstood, yet vital topics to be included in your overall financial and estate planning. This one issue causes more retired folks to lose their home and go bankrupt than any other. Having a written plan to instruct family members, friends, successor trustees and those holding powers of attorney is a “must include”element to your retirement and other financial plans.

We include this question on our Thought Organizer, which is the starting point for all clients that we work with. There are questions about a wide variety of personal feelings, beliefs and experiences on the Thought Organizer. This helps us to understand a client’s perspective, expectations and priorities. This in turn, helps us to be more effective in providing plans and recommendations to our clients. The very last question on this form is“How do you plan on handling your long term care expenses?”, because there is no point to helping someone with their investments and planning, just to have all that work go down the drain due to a chronic condition that requires huge sums of money to deal with.

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The answers people give to that question run the gamut from flippant, like “Smith and Wesson”, or “Cyanide”. One answer I see a lot is “I’ll let the kids worry about it”. But the most common response is; “I have no idea”. Well, in many cases the old saying “Ignorance is bliss” can provide devastating results that can decimate an entire family. See, most of the time we think about ourselves in this context, and fail to see the devastation that a long term care situation causes to others. When the provision of care is left to a friend or family member, you save money but lose in a number of other ways. One way is your dignity. Think about whether you would want your kids giving you a bath, dressing you or helping you with other “activities of daily living”. This is even if they are willing, would they be able? I know my 5 foot 3 inch wife would not be able to pick me up from bed and put me in a tub and bathe me.

How would the kids feel having to perform that task?

Another major loss is to your caregiver’s time. Generally, if you are being cared for by family or friends, they are not being paid to be with you. Also, if they aren’t spending as much time working their income usually goes down and they will have less time for non-work activities which will have a negative impact on their quality of life. This cost is usually much higher than people realize.

About 15 years ago, one of my former roommates and a long time close friend had a very tough choice to make. He was working as a high school teacher here in the Bay Area. His only living immediate family was his Mother. She was living in a senior independent living situation. One day he started to get calls from the administration complaining about his mother’s behavior. She was becoming cross with the other residents and the staff. She was missing meals and sneaking candy bars into her room (she was diabetic, so this was very bad for her health). One time they called to say she had stuffed things in the toilet and her room flooded as a result. Over a two year period the calls became more frequent, with the warning that they were not a long term care facility and were not equipped to make sure his Mom ate right and took her medications. Ultimately, they said she had to leave as she required more care than they could provide. This left my friend with a difficult choice, quit his job and take care of Mom, or arrange for a care giver.

After much research, he concluded that his teacher’s salary would not give him enough income to pay for her care, so he quit his job, left California and moved in with his Mother in a small trailer they owned in the Midwest. For the next 7+ years, he took care of her. He helped her to dress (and undress), he made her meals and made sure she took her medications. After a very short period of time you could easily see the changes it instilled in him. He became short and irritable. He began to feel isolated in his rural setting. Eventually he started to resent his Mother and would look forward to her becoming ill and going to the hospital so he could get a break. By the time she passed, he was in his late 50’s and never rejoined the workforce. He had missed out on significant changes to his profession and didn’t feel that he would be able to ever get current. He also missed his peak earning years. He took early social security and struggles daily to eke out a life for himself.

So you see, long term care isn’t just a tragedy for the individual, but also for many layers of family and friends as well. The stark facts are that, according to the Department of Health and Human Services, more than two thirds of all the people reaching the age of 65 will need some form of long term care assistance before they die, and the average amount of time care is needed will be nearly 3 years!

There are many ways to approach this problem. Not all of them require purchasing Long Term Care Insurance. The key is to have a plan before you need one. Contact us and we can help you explore your options before it is too late.

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