Don Hanifin discusses long-term care risk
Listen to the interview on the Business Innovators Radio Network: https://businessinnovatorsradio.com/interview-with-don-hanifin-founder-of-dh-retirement-solutions-discussing-long-term-care-risk/
Don Hanifin, founder of DH Retirement Solutions, discusses the critical topic of long-term care risk in retirement planning. Don emphasizes the importance of understanding how long-term care can impact financial stability, likening it to a potential leak in a retirement income bucket. He addresses common misconceptions surrounding Medicare’s coverage of long-term care, highlighting the confusion that often arises from the government’s messaging. Don also notes a significant change in Medicare’s definition of long-term care set to take effect in 2025, which he brought to the attention of his peers during a national conference.
Long-term care (LTC) represents a significant financial risk in retirement, making it essential for individuals to understand its potential impact on household finances as part of effective retirement planning (CT & MA). In a recent episode of the podcast “Influential Entrepreneurs,” Don Hanifin, discussed the complexities surrounding long-term care and the importance of having a strategy in place.
- High Monthly Costs: The episode outlines the staggering costs associated with various types of long-term care:
- Home Care: Approximately $5,500 per month.
- Adult Daycare: Ranges from $1,900 to $2,000 per month.
- Assisted Living: Costs between $5,000 and $6,000 per month.
- Nursing Homes: The most expensive option, with costs ranging from $13,000 to $20,000 per month – or more, depending on where you live.
These figures illustrate how quickly long-term care expenses can deplete a lifetime of savings, underscoring the necessity for individuals to plan ahead.
- Lack of Awareness: Many people are unaware of the financial implications of long-term care. Don points out that while individuals often have strategies for unexpected events, such as a tree falling on their garage, they typically lack a plan for health conditions that may require long-term care, like Alzheimer’s. This lack of preparation can lead to financial devastation when the need arises.
- Informal Care Costs: The episode also discusses the financial impact on family caregivers. According to the RAND Corporation, family caregivers lose over $500 billion in wages annually, with many spending their own money—averaging just under $7,500—on caregiving expenses. This financial strain can further complicate household finances, especially for those who may already be struggling.
Given the potential for long-term care to significantly affect retirement savings, it is vital for individuals to consider their options early. The podcast emphasizes the need for education and awareness regarding long-term care insurance and other financial strategies.
- Insurance Options: Only about 3% of Americans currently have long-term care insurance, which can help mitigate these costs. However, many people are hesitant to invest in such policies, often due to misconceptions about their value. Don reminds us that just like auto or homeowners insurance you do not pay “into” your policy – you pay “for” it (cash value is never built). Insurance products are designed to leverage personal dollars against catastrophic loss. Having essential coverage guarantees a person will have strong choices.
- Alternative Resources: The episode also discusses alternative resources for funding long-term care, such as tapping into life insurance cash value or utilizing home equity. Additionally, hybrid policies that combine life insurance with long-term care benefits are becoming more popular, providing a safety net for those who may need care while also ensuring a death benefit for heirs.
In summary, long-term care represents a significant financial risk in retirement, with costs that can quickly escalate and threaten household finances. The lack of awareness and planning around this issue can lead to devastating consequences for individuals and their families. Engaging with financial professionals, like Don, can help individuals navigate these complexities and develop a comprehensive strategy to address long-term care needs effectively.
Don emphasizes that many people do not have a strategy in place for dealing with long-term care needs, often relying on the hope that they will not require such services. This lack of preparation can lead to devastating financial consequences, as the costs of long-term care can quickly deplete a lifetime of savings.
As a result of the limited coverage options and the low uptake of long-term care insurance, many families find themselves in the position of providing informal care. Hanifin notes that family caregivers often bear the brunt of this responsibility, with a significant impact on women who often take on the role of caregiver for aging parents.
Don shared: “Medicare and You. I suggest to people that attend seminars when we’re talking about Medicare or Social Security, keep that book by your bedside. It is nature’s most powerful natural sleeping pill.”
Additionally, AARP reports that informal caregivers spend an average of just under $7,500 of their own money annually to support their loved ones. This financial burden can strain family relationships and lead to feelings of resentment or burnout among caregivers.
About Don Hanifin
With 29 years of experience in the financial services industry, Don is the founder and owner of DH Retirement Solutions, Inc. Based in Massachusetts and Connecticut, Don specializes in helping individuals and families navigate retirement income planning with a focus on optimizing income and reducing taxes.
Don works with clients to create comprehensive strategies that integrate life insurance, annuities, Medicare, and longevity care allocation planning. By taking a proactive approach, Don helps clients secure their financial future, ensuring they enjoy a comfortable and worry-free retirement.
A trusted advisor, Don provides personalized solutions that align with each client’s unique goals and financial situation, all while helping them maximize their retirement savings and minimize tax liabilities.
Insurance Licensed in MA & CT | Retirement Income Planning Expert
Learn More: http://dhretirementsolutions.com/
Recent News and Interviews:
Don Hanifin discusses how life insurance fits into retirement: https://authoritypresswire.com/don-hanifin-founder-of-dh-retirement-solutions-interviewed-on-the-influential-entrepreneurs-podcast-discussing-how-life-insurance-fits-into-retirement/
