Long-Term Care Planning For Families: What You Need to Know

As we age, our physical and cognitive health can start to decline. This inevitably raises questions about how families should plan for the long-term care of a loved one. Unfortunately, many affluent executives and entrepreneurs don’t have the answers they need to make informed, beneficial decisions for their families. 

They may not know how to approach this kind of planning in cost-effective ways, either. With inflation and stock market volatility complicating things, that’s a problem, as well. As a result, in this blog post, we provide an overview of what you need to consider when making long-term care planning decisions for your family.

Please explore these topics with us:

  • Long-term Care Planning Statistics For Self-motivation
  • Estate Planning With Long-Term Care Coverage For Single Individuals
  • Caution: Preserve Your Children’s Inheritance with Long-Term Care Coverage
  • Lack Of Financial Literacy Causes Financial Inertia
  • How An Independent Financial Planner Can Help
  • How To Have a Meaningful Conversation With Your Parents About Money
Chapter 1

Long-Term Care Planning Statistics for Self-Motivation

Long-Term Care Planning Statistics humanitywealth.comFinancial planning for long-term care can be essential to a comprehensive financial plan to help you retire with confidence. 

The hard truth is that failing to account for high levels of expenditure on long-term care can lead to serious financial hardship later in life. For instance, the average hourly cost of long-term homemaker services in the United States was $26 in 2021. 

The price of a home health aide, meanwhile, was $27 per hour. Neither of these services stayed the same, however. In fact, both are expected to climb considerably over time. By 2030, both kinds of services are expected to cost over $30 an hour. 

If this sounds negligible so far, please read on: By the time 2050 rolls around, the cost for either kind of service is expected to run northward of $58 per hour. It’s not a stretch to expect even high costs for long-term care in the years beyond. 

That’s why it bears repeating that enjoying a lifestyle of affluence now, alone, cannot guarantee a well-funded retirement in the future. Today’s uncertain markets and continuing inflation mean that comprehensive research and informed decision-making are more essential than ever.

Chapter 2

Estate Planning With Long-Term Care Coverage For Single Individuals

long-term care costs humanitywealth.comLong-term care coverage is a form of health insurance that covers the costs associated with extended medical or custodial care. It also provides coverage for those who require assistance with daily activities such as bathing, eating, dressing, and more over an extended period of time. 

It’s designed to supplement Medicare and other forms of traditional health insurance policies that may not cover all long-term care expenses. For single individuals, having it can provide a sense of security in the event that they need extended medical or custodial care in the future. 

Additionally, this type of coverage often comes with tax deductions on premiums paid as well as potential asset preservation, should there be a need for long-term care down the road. Furthermore, having this type of policy in place can help ensure that your hard-earned assets are preserved for future generations; not depleted by higher and higher long-term care costs.

If you’re single and considering estate planning with long-term care coverage, it is important to keep in mind the various factors that need to be taken into account: your budget, your lifestyle needs, and your risk tolerance levels should all be considered.

Additionally, it is important to understand what types of services are covered under your policy. This allows you to know exactly what you are paying for and how much benefit you will receive, if needed, in the future. 

Having this type of coverage in place makes it easier to plan ahead. When you know that your assets are preserved, should you need extended medical or custodial treatment later, you can prepare for the future more confidently.

Chapter 3

Caution—Preserve Your Children’s Inheritance With Long-Term Care Coverage

When you have children, it’s natural to want to provide them with the best future possible. However, if you find yourself needing to use long-term care services, you may be worried about the effect on your children’s inheritance.

With long-term care coverage, you can help preserve your estate from depletion and potentially ensure that your kids will get what’s rightfully theirs. Again, long-term care coverage preserves your assets in case of prolonged illness or disability, including nursing home, adult daycare, or assisted living facilities costs. 

At the same time, it can also cover home health aides, private duty nursing services, and other types of medical assistance. There’s a lot to be said for not having to worry about depleting your hard-earned savings or other assets over time. 

If you don’t need to use the policy, you can always pass along the benefits of having it to your children when they inherit your estate after you’ve passed away. So, your family retains that equity, even if you never need it during your lifetime.

The best time to purchase long-term care coverage is while you are still healthy and before any signs of illness appear. Additionally, you may also qualify for discounts on premiums if you purchase your coverage while you are younger. 

Since many policies are designed to pay out benefits as soon as a qualifying event occurs (meaning you’re rendered unable to perform two activities of daily living), getting proactive is vital. You need to plan accordingly for your loved ones to be taken care of financially, should something happen down the road. 

There are several different types of policies available, depending on what level of coverage works best for you and your family’s needs. Generally speaking, there are three main categories: traditional long-term care insurance policies, hybrid life/long-term care insurance policies, and annuities with long-term care riders. 

Each of these has its own advantages and disadvantages. As a result, it’s important to do your homework before deciding which type of policy will work best for you and your family’s unique situation. With careful planning, long-term care coverage may provide you potential confidence now while ensuring that your loved ones are well taken care of in the future.


Concerned by Inflation’s Impacts on Your Savings and Investments? We Can Help.

Chapter 4

Lack of Financial Literacy Causes Financial Inertia

subscription-based financial planning humanitywealth.comAlthough the subject of money isn’t always discussed openly in polite conversation, it’s an important topic to discuss. The financial decisions we make have a direct impact on our future wealth and well-being. 

Unfortunately, even some remarkably successful people lack the financial literacy necessary to make these decisions wisely. As a result, they can slide into “financial inertia,” which is the tendency for people to remain in their current financial situation due to a lack of understanding or motivation. 

Generally speaking, this occurs because they don’t perceive how taking a particular financial action will benefit (or preserve) them. It’s surprisingly common among affluent families, members of whom do not understand their need to plan for the future, why diversifying their assets is important, and so on. 

For example, investing in stocks can be challenging, especially if you don’t understand how the market works. Similarly, if you aren’t aware of how changes in interest rates can affect your investments over time—or inflation’s potential impacts—you may not understand why these matters should concern you. 

While many factors can contribute to financial inertia, two common factors are a lack of financial education and psychological barriers. Poor financial literacy can mean that someone may not understand how different aspects of finance work. Similarly, they may not know why taking certain actions can help ensure their long-term financial well-being, either. 

Meanwhile, psychological barriers may include things such as a fear of failure, procrastination, or the refusal to admit that we need help with our finances. Any single one of these can prevent individuals from taking the necessary steps toward their financial goals. When they coincide, the problem may be compounded.

One of the best ways to avoid financial inertia is by educating yourself about personal finance and investing principles. Additionally, creating an achievable plan with short-term goals along with regularly reviewing it will help keep you motivated and on track for your long-term goals. 

When done correctly, these things can lead to greater control over your money and, possibly, better economic outcomes for yourself and your family.

Chapter 5

How an Independent Financial Planner Can Help

independent financial planner humanitywealth.comWhen it comes to planning for long-term care, it can be difficult to know where to start. That’s why working with an independent financial planner can be a smart option. A good one has the knowledge and experience necessary to help you accurately assess and track your current financial situation. 

At the same time, good wealth management helps you assess your risk tolerance, cash flow optimization, asset allocation, insurance needs, retirement planning, tax planning strategies, and more. All of these things normally play a major role in long-term care planning.  

Humanity Wealth Advisors provides subscription-based financial planning to help you pursue your wealth-growing and asset-preservation goals. Similarly, if you could use a financial services firm in San Ramon, we’re here for you, too. Contact us today.

Chapter 6

How To Have a Meaningful Conversation With Your Parents About Money

financial services firm San Ramon humanitywealth.comMoney can be a taboo topic, especially among affluent households. Having a meaningful conversation about it with your parents, especially, can be intimidating and difficult to do. Nevertheless, it’s important. Without learning what you can, you won’t understand the financial challenges facing you and your family as well as you need to. 

If there is tension or awkwardness, consider diffusing things with light humor. You might pair this with expressing appreciation for their hard work. Finally, end by expressing gratitude for both the ongoing conversation and any advice they may have provided. You know your parents better than anyone, so please go with the approach you think is best.

Regardless of how you get it, you need their input on the following:

1. Long-term care. Conversations on this subject may not come naturally at first, but they are essential. Remember to keep calm, respectful, compassionate, and understanding while allowing them room to express their thoughts and feelings. With that said, be prepared to put facts before emotions to help ensure that your parents have all the information they need to make informed decisions.

Discussing this topic isn’t just important for verifying their wishes. Long-term health care is expensive—and getting more so every year. Inflation’s dollar-diminishing effects and bear stock markets make it important to plan measures for fortifying your family’s financial legacy as much as possible.

2.  Preserving your family’s wealth. You may want to start by informing your parents of your concerns in this area. Avoid making assumptions or generalizations; instead, focus on positively identifying common goals together. With clear expectations around what works best for both parties, you should be able to navigate the subject reasonably.

That’s important because building an asset preservation strategy is the most important thing, financially, that your family can do. It’s meant to shield assets from conflicts and potential litigation. Ideally, it should include investing in insurance policies, setting up trusts, and reforming business entities as necessary. 

3. Generational Affluence. Consider talking through the family’s financial goals, both long and short-term, and what practical steps can be taken to reach those objectives. Also, make sure to explain why this conversation is necessary, given the economic time period we’re experiencing.

It may help to emphasize making the wisest use of resources now so that future generations of your family benefit. Outline the potential rewards that help with the accumulation of wealth may potentially bring not just for yourselves but for your descendants, too. 

Lasting affluence can help ensure their financial well-being and your family’s long-term success. This is not as easy of an endeavor as it once was, but there are steps you can take to help you along to this goal. For example, you could diversify your investments across a variety of asset types, safeguard property through trusts, and establish a cohesive strategy for overall growth over time.

This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about long-term care insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.

No strategy assures success and diversification does not protect against market risk.

Humanity Wealth Advisors and LPL Financial do not provide legal advice or services.  Please consult your legal advisor regarding your specific situation.