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Are You Prepared for Long-Term Care?

Are You Prepared for Long-Term Care? Fitzwilliams Financial

The possibility of needing long-term care is a major factor in your retirement. It’s difficult to think about a time when you may need extra assistance with daily tasks, but it’s very common and very costly, especially given that it’s not covered under Medicare! Not every retiree will require it, yet it’s a potential need that could arise in the future. As per data from the United States Department of Health and Human Services, more than 70% of elderly individuals may need long-term care at some stage in their life.[1] Therefore, incorporating such possibilities into your post-retirement plan might be something to consider and monitor closely.

Individuals lacking the resources or a structured plan for their long-term care needs may find themselves dependent on relatives for help.[1] This is not always a bad thing, and it can be fulfilling and bring people closer together. However, it might not align with your vision of retirement, and it could impose a financial strain on your loved ones, as looking after you might limit their work capabilities and opportunities.[1] They also might need to cover some of your medical costs.[1] While everyone’s situation is different, long-term care needs can occur for some individuals; it’s important to remember this possibility even if it doesn’t look likely for you now.

Strategies to Consider When Preparing for Long-Term Care?

A viable strategy is to incorporate the likelihood of needing long-term care into your retirement financial planning. As you formulate your post-work life plan, considering the prospect of future long-term care may leave you better equipped should that need arise later. Make sure you save for it, and any health insurance decisions should be made knowing how long-term care insurance may or may not play into it.

One alternative you might want to contemplate is making contributions to a Health Savings Account (or HSA). The advantage of an HSA is that it enables the accumulation of non-taxable funds, provided they are spent on health-related costs.[2] An HSA comes with its own set of regulations and requirements and, depending on your unique circumstances, may not be accessible. However, if feasible for you, it’s certainly worth exploring the prospect of setting up one of these accounts.

There’s a multitude of potential choices and factors when it comes to devising your retirement strategy. Retirement planning is not a uniform process – it varies from person to person. Should you desire a custom-made retirement blueprint tailored exclusively to your needs, consider contacting one of our financial professionals for a no-cost financial assessment.

 

When consumer confidence hits a multi-decade low, it is completely natural for you to feel a sense of hesitation about your hard-earned savings. If you are approaching retirement, seeing prices rise while trying to figure out the right time to adjust your portfolio can feel incredibly stressful. However, this low confidence might actually be introducing a healthy dose of critical thinking into the market right now. Instead of rushing into investments out of a fear of missing out, I am seeing people take their time to analyze their moves before they act.

This deliberate pace could be a vital asset as we prepare for what might be a historic three trillion dollar wave of tech IPOs. The names hitting the market are incredibly popular, and the media hype may make you feel like you need to change your entire strategy to get a piece of the action. But we must look closely at the underlying reality: many of these massive firms are not yet profitable. The typical corporate fundamentals simply are not there yet.

Because of this, I believe you should treat these speculative assets with extreme caution, much like money you would take to Vegas. If you want to participate, you might consider limiting that exposure to no more than five percent of a well-diversified portfolio. You should never dismantle a carefully crafted, long-term retirement plan just to follow a market trend. Furthermore, you must realize that extreme trading volumes during these public launches could cause your orders to execute at vastly different prices than you originally intended. It pays to be patient and let the dust settle.

If you have questions about how these shifting market dynamics might apply to your personal retirement plan, our team is always here to help.

Key Takeaways

  • A drop in consumer confidence may encourage a healthier investment environment by forcing individuals to rely on critical thinking instead of emotion.
  • An upcoming wave of massive technology IPOs might generate significant media hype, but these companies may lack current profitability and traditional business fundamentals.
  • Investors should avoid allocating more than five percent of a diversified portfolio to highly speculative, unproven market assets.
  • Heavy trading volume during a major public offering could cause investment orders to execute differently than an investor expects.

Fitzwilliams Wealth Management, Inc. is an SEC registered investment adviser. FWM and Fitzwilliams Financial are affiliated companies. This content is for informational purposes only and should not be construed as personalized investment advice. We do not provide tax or legal advice. Investing involves risk. Media appearances are for informational purposes only and do not constitute an endorsement.
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