Oftentimes, retirement income plans don’t include late-in-life health or long-term care expenses. Here’s how to cover for the unplanned withdrawals to pay for those.
At lunch recently, a friend said he was about to meet with his financial adviser, who had prepared a 20-page report that, he told me, “will wrap up everything” about his retirement. I asked whether it would address long-term care or similar needs. He wasn’t sure.
I followed up: “Do you and your wife have LTC insurance?” Nope. He didn’t qualify when they applied years back.
So, the 20-page report will not cover “everything” my friend needs to consider for retirement.
Expenses for health care are often referred to as unplanned expenses, but actually they are expected; at least 70% of us will experience a long-term health event in our later years. So, I refer to these expenses as planned but not currently funded. The best plans account for them in retirement. (Unplanned expenses are what thousands of Los Angeles residents experienced this year with the wildfires.)
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