What if I have a major healthcare event in retirement?

This is a question that comes up often in client conversations. It’s also commonly known as the “long-term care” question, or, the woefully expensive healthcare event(s) that Medicare will not cover in retirement. It can be a major source of anxiety and is often overlooked when structuring a financial plan.

It breathes complexity into a plan for two reasons:

1. Spoiler alert: there is not a one-size-fits-all solution.
2. It requires thinking about a difficult period in life sometimes 20-30 years into the future, which as human beings we are ill-equipped for. Combine that with the major changes the long-term care insurance marketplace has undergone, and answers become elusive.

While the solutions range, what is not a viable solution is the following response: I will deal with it when the time comes. And based on current actuarial tables and average lifespans in the US, it is more of a “when,” not an “if,” for most couples in retirement.

So how do you plan for this?

• Understand the costs involved with LTC, which vary greatly by service types, and location/geography.
• Work with an advisor to model out the short and long-term effects of the event.
• Understand your funding options, which range from self-funding to a variety of insurance products with their own pros, cons, & trade-offs.
• If you have a policy already, get a second opinion, stress test it under new scenarios, and understand the coverage, benefit periods, and what rights you have under the policy versus the insurance company.

Long-term care and healthcare in retirement can be difficult to navigate. Have a conversation with a CERTIFIED FINANCIAL PLANNER™, and don’t “deal with it when the time comes.”