Provided by Sara Frank-Hepfer
Many of the women we see portrayed in movies and on television are independent, wealthy, and confident, with great digs, a closetful of designer clothing, and high-powered careers.
But real women, as self-sufficient and sophisticated as they may be, face a more complicated set of realities:
o Women usually live longer than men.
o Women usually end up single, even if they were once married.
o Women usually earn less than their husbands and men in general.
o Women usually end up with decreased income if they outlive their husbands, and many become vulnerable to poverty.
o Women tend to be more conservative investors over the course of their lives.
The cumulative result of these factors is that women are much more likely than men to need long-term care-and much less likely to be able to afford it. When you consider that the average cost, nationwide, for a private room in a nursing facility is now more than $87,000 a year, and home care averages $45,188 a year 1, a strategy for funding potential long-term care expenses is an essential component of any woman's financial plan.
Concerns about aging
Women have many concerns surrounding aging that a long-term care plan can help to alleviate. Some women, for example, may be worried about having sufficient assets to leave to children, grandchildren, or charities. Because a long-term care plan provides cash flow to help pay for health care expenses, it can also help protect your estate, enabling your financial plan to execute the way you intended.
Many women also worry about becoming a burden on family members. A long-term care policy enables your family to manage care instead of serving as the actual caregivers. In addition, it can give you the freedom to choose the place where you want to receive care, whether in your home, an adult daycare, an assisted living facility, or a nursing home.
Sometimes, though, families assume that a spouse or children will provide care if and when it's needed. If that's the case, it may be time to ask a few tough, but reasonable, questions:
o Who exactly will be the caregiver? Have you discussed this with the family?
o Are family members capable of caregiving? Do they have the necessary skills? Are they geographically close?
o Are family members able to dedicate time and money to the caregiving effort? Are they willing to compromise work or their own family responsibilities to become the caregiver?
Keep in mind that caregiving can be a significant burden, both physically and mentally. In fact, a long-term illness can often take a bigger toll on a caregiver than a spouse's death, turning his or her “golden years” into an unexpectedly stressful time.
What about self-insuring?
Affluent individuals may believe that self-insuring is the best way to fund long-term care expenses. That way, if they never need care, they haven't “thrown away” money on a policy they didn't need. If you fall into this category, linked-benefit products may be a good option to help pay for care. A linked-benefit policy is a single-premium life insurance policy that provides long-term care benefits-as well as a tax-free death benefit in the event long-term care isn't needed.
As your financial advisor, we have the resources and expertise to help you decide on the best long-term care strategy for your situation and goals. Remember, a woman who plans for long-term care protects her financial plan, her family, her health, and-not least-her independence.
1 Genworth 2014 Cost of Care Survey, conducted by CareScout (April 2014)
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
Sara Frank-Hepfer is a financial consultant located at Financial Technology, Inc., 1500 Abbot Road, Suite 150, East Lansing, MI, 48823. She offers securities as a Registered Representative of Commonwealth Financial Network®, Member FINRA/SIPC. She can be reached at (517) 351-8600 or at
© 2015 Commonwealth Financial Network®
This article was printed in the March 6, 2016 - March 19, 2016 edition.