You face 3 big threats to your retirement savings. Elder care attorney Dennis Toman explains why long-term care costs may be the biggest threat to your family’s financial future.
Families work so hard to put away assets for retirement and hope that they will have a long and pleasant retirement without money worries. But so often in my practice, I see three big threats to retirement savings.
The first of course is inflation. Just think about how much you are paying for gas back in the 60’s and 70’s? You know, ten cents or 35 cents? Now go look at the gas pump and see how much you’re paying these days. Inflation is a tremendous issue it hurts retirement savings.
Another issue of course, is taxes. Many people have their retirement savings in IRAs or other types of retirement plans, and those are pre-taxed dollars, which means as you use them, you’re going to be paying income taxes.
But really, the biggest threat to retirement savings for families who have put away some money is the devastating cost of long term care. If it’s going to cost eight thousand to ten thousand dollars a month to get care, you simply need to decide where are you going to take that money from first, and then ask yourself how long is that money going to last? Many times, the answer is going to be one year, two years maybe, maybe a little bit longer that some people can afford to pay privately.
The point of all of this is that for your retirement savings, this is a particularly big issue for families who are in the middle. You know, for a family that doesn’t have much in terms of assets, there are going to be some benefits pretty readily available. For families that can afford privately with assets in the millions, there are still some insurance coverage matters they need to attend to, but they’re not going to be worried about Medicaid, or how to qualify for Medicaid benefits.
It’s the families in the middle… the folks who have worked hard, saved hard, put some money away, have their own house…these are going to be the folks that are going to be hurt the worst if they don’t do the proper planning for retirement.