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Look "long term" when drafting retirement plans

By Fred Cowley

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Who, in their normal way of thinking, anticipates ever being confined to a nursing home?

“No way,” your client says. “My grandmother was in one of those places and it’s certainly not for me.”

Well, here’s the good news. Maybe (just maybe) your client is among the many Americans who will never need a nursing home.

Perhaps they’re one of the lucky ones who has a spouse or family member who has promised to take care of them in their time of need in the luxury of their own home. But listen to the (sobering) bad news: More than 50 percent of American seniors will someday require a nursing facility, assisted living or need home health care or institutional care.

So what does that mean to their bottom line? A patient, or their family, is spending anywhere from $150 to $200 per day for the privilege. That’s $5,000 to $6,000 per month.

But that’s not all. If the caretaking spouse is not properly trained, they will likely risk their own health in exchange for their loving efforts to lift, bathe, feed, toilet, roll the patient over, change sheets and bed clothing.

Here is the question for your client: How much of your retirement nest egg can you afford to give up to fund your out-of-home residency? And don’t forget your spouse’s needs … someone still has to keep up “ye ole homestead” while you are pursuing their attention at toting your bed pan.

Well, the true issue at hand is this: Are you, as an advisor, performing your fiduciary responsibility if you are not offering a long term care proposal every time you offer a “safe money” product?
It’s easy to sell retirement income, but no one wants to face the possibility of needing long term care due to health failure.

And, it doesn’t stop there. Senior adults also tend to be averse to spending money for protection that they are in denial of ever needing.

The bottom line is this: As advisors, we must address our responsibility of, at the very least, offering a long term care proposal with every financial plan proposal. Doing so can protect your own retirement income nest egg against lawsuits resulting from “negligence” on your part.

The issue here is whether or not you offer the opportunity rather than your client’s potential to decline your proposal. Your printed proposal is your evidence of “due diligence.” Don’t neglect it!