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March 30, 2016 at 09:45 AM
Someone was asking me the other day, “Where do you get your investment ideas?”
The truth is that, my outlook tends to be bleak enough that I see The Walking Dead as a fine source of long-term financial planning guidance.
Others see money market funds as the best safe harbor. Or, maybe gold. Or money under mattresses. My safe money tends to go into flashlight batteries.
See also: LTCI Watch: Zombie loans
But, of course, eight of the 10 last apocalypses I’ve expected never happened at all. The two that did happen weren’t much to talk about. And it’s really hard to keep track of flashlights and flashlight batteries.
What if civilization keeps going? What then?
I think Mark Dearsley of Partnership UK, a major provider of impaired risk single-premium immediate annuities (SPIAs) in the United Kingdom, provided a clue recently, when he talked about “point of need” long-term care (LTC) financing options at a session at the Intercompany Long Term Care Insurance (ILTCI) Conference.
The catastrophe under our noses is ordinary people’s failure to plan for LTC expenses or, really, to plan adequately for any other post-retirement expenses.
What will we do in 10 years when the oldest baby boomers start turning 80, and heading toward the “oldest old” category?
Some people who need services will literally end up on the sidewalk. There are already unlucky boomers who are somewhere in the ballpark of needing LTC services living on the sidewalk near the door to the office I work at in New York City. I think they often collect enough cash from panhandling to get a room for the night, but there are no guarantees.
Some people who need care will end up in terrible family care situations or in warehouse-like nursing homes straight out of a Dickens novel.
Chances are that most people who need care will end up in an informal care or formal care situation that is fine. Maybe it will not be the kind of sensitive, flexible, person-centered care that federal law now emphatically promises us, but it will be enough to keep people breathing, and fed, after a fashion.
How do we get from the point we’re at now, to the point in 2026, or 2031, or 2036 in which a high percentage of people who need LTC services are getting some kind of services?
One answer is that maybe people like you have helped about 15 percent of Americans get enough LTCI or other LTC financing arrangements to protect themselves pretty well against LTC expenses.
Maybe you still have a decent shot at helping another 15 percent get LTCI, short-term care insurance (STCI), or other products that can minimize the risk that those consumers will have major unmet LTC needs.
