Long Term Care Financial Planning: Have You Had Your Check-up?
We all need check-ups.
As a financial advisor, your meetings with clients are little different from their preventive visits with doctors. They have chosen you to help them navigate what can be rough seas and develop a trusting relationship with that will last for many years to come.
Many advisors miss the mark and neglect three fronts that would serve their clients better, strengthen their relationships and grow their bottom line. Are you discussing these areas with your own clients?
Health and Long-Term Care Costs
Your clients need to learn the facts about health costs ahead of time so that you can work together to formulate the right plan for their needs.
Here’s a staggering statistic to break the ice: a 65-year-old couple retiring this year needs an average of $240,000 to pay for medical costs throughout their retirement (Fidelity, 05/12). That figure doesn’t even include long-term care (LTC) costs which continue to grow.
Add to that the fact that 36% of all LTC recipients are under the age of 65 (Georgetown University LTC Financing Project) and you can see that now is the time to start this discussion candidly with your clients.
Is LTC insurance (LTCI) right for everyone?
Not necessarily, but the conversation is important and if your clients don’t receive it from you, they will find it elsewhere. Time and again, I see advisors lose out when their clients purchase long term care insurance on their own because the subject was never breached with their advisor. Get to know the cost of care in your own community which vary substantially from region to region (the annual Genworth Cost of Care Survey by state is a good starting point). Above all, don’t delay… there is too much at stake for you and them.
You owe it to all of your clients to develop well-rounded strategies… that’s why they choose you rather than the next advisor.
Yet I see half of all clients are often left out of financial discussions and decisions right in their advisor’s office! Women control the largest amount of wealth in North America (Boston Consulting Group, 2009) and some 69 million of us are in the workforce.
Yet all too often, they feel as if their advisors don’t understand their unique situation in the workforce and at home… and they’re right. It’s imperative that you understand and address the needs of your female clients rather than become a statistic yourself: After all, a staggering 70% of widows leave their financial advisors within three years following the death of their husbands (Oppenheimer Investing Funds, Women & Investing Survey 2007).
Start by understanding their unique role as caregivers and wage earners.
Think about the women in your own life: How many of them have spent time care giving to their children, spouse or parents?
Chances are they all have. In fact, women will spend an average of 13 years outside of the workforce providing family care (Women’s Inst. For a Secure Retirement: What Women Need to Know About Retirement, 2004), which equates to substantially lower lifetime income and social security benefits.
Add to that the fact that women earn just 77 cents to a working man’s dollar and two thirds earn less than $30,000 annually without pensions (Women’s Inst. For a Secure Retirement, May 2008) and you can see the genuine anxiety many women have when it comes to retiring.
Given their lower pay, fewer benefits and longer lives, many financial experts recommend women have more money for retirement than men.
Don’t neglect your female clients, even if they aren’t used to discussing these topics. Listen to their needs, understand their situation and help them define a plan that will work.
Younger Clients’ Needs
Be sure to address your younger and working clients’ plans for their own aging parents and the costs associated with caring for them.
The average informal caregiver is female and aged 50 (Caregiving in the US from National Alliance for Caregiving, Nov. 2009).
Life insurance is another product that is designed to cover beneficiaries in many ways from paying off debts and mortgages to funding education and burial expenses.
Do all of your clients have life insurance… male and female, working and stay-at-home? Families are often ill-equipped for the financial costs of everything from childcare and homework tutoring to caring for a spouse or parent in old age.
If you have clients who are raising their own families, do not delay this conversation. It is one of the simplest insurances to purchase yet it will help keep them coming to you for all of their financial needs.
By Wendy Boglioli for LifeHealthPro.com Wendy Boglioli is a national spokesperson for Genworth Financial Inc., Richmond, Va. (NYSE:GNW), an Olympic Gold Medalist and a long-term care advocate.