Your clients are living longer than ever; as the Wall Street Journal points out, "life expectancy for women is expected to reach 87.3 years, and 83.9 years for men, by 2060," which means addressing Longevity is necessary for this aging demographic. They will experience the impact of the ever-increasing cost of care.  Research by Fidelity Investments indicates the average 65-year-old couple retiring today will need more than $315,000 to cover the cost of healthcare in retirement for items excluded by Medicare!   Making matters worse, the Fidelity estimate does not include the cost of Long-Term Care (LTC).  

"Healthcare is creating a 'retirement cost gap' for many pre-retirees," says Steve Feinschreiber, senior vice president of the Financial Solutions Group at Fidelity. "Although many assume their savings will cover all their retirement expenses, health care costs are often higher than anticipated. Many people assume Medicare will cover everything, but it doesn't. The average 65+-year-old retiree today should expect to pay around $5,000 a year on health care premiums and out-of-pocket expenses. So, you should carefully weigh all options."   When Fidelity looked at Long-Term Care expenses, they concluded that the same "65-year-old couple would need $130,000, in addition to savings for retiree medical expenses, to insure against long-term care expenses".....This analysis also aligns with the U.S. Department of Health and Human Services, which expects "70% of people turning age 65 can expect to use some form of long-term care during their lives."   

Another study on Long-Term Care by the LIFE Foundation, a nonprofit consumer education company, shows that even though awareness is rising, consumers aren't taking enough action. Seventy-one percent of respondents believe "50 to 80 percent of adults 65 and older will need long-term care services at some point." However, it noted that "just 8 million Americans have a Long-Term Care Plan, even though 100 million are older than 50."

The cherry on top of the discussion is an article entitled "Do Boomers Have The Guts And Wisdom To Course Correct Our Aging Nation?" by Ken Dychtwald, author, gerontologist, psychologist, and president of AgeWave.com. The premise of the article is that as Americans "migrate into elderhood, our huge numbers and vast influence over the economy, social policy, and the culture, in general, will transform America into a 'gerontocracy' and the growing costs of our anticipated illnesses and entitlements will further strain our economy." Mr. Dychtwald then lays out the major issues he sees our country facing and his ideas for addressing them, making it reasonably clear the responsibility for planning falls primarily on the individual or family.   Unsurprisingly, we continue to see a decrease in the average age of those engaged in Long-Term Care planning, which is a positive trend since planning costs are significantly lower for those younger and healthier.  

Although many of your clients already have significant financial responsibilities, perhaps it's time to encourage them to be proactive (as early as possible) and incorporate the "Cost of Aging" into their comprehensive planning. 



How are you helping clients address Longevity in their planning?

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