If you read my first blog Put [a] TAG on it, you probably know I’m good for a random story that keeps you wondering; where in the world is she going with this one? If you haven’t, you can check it out here.
You were right! Today, I want to chat a bit about a Haitian proverb I shared on Haitian Flag Day –“Ranje kabann avan dòmi rantre nan zye’w” Make the bed before you get sleepy – The literal translation makes no sense, but in my opinion, it illustrates the importance of proactive planning.
Imagine you’re on a multi-day trip. You are traveling by car, through different time zones, with a backseat driver like my cousin Rose, who prays and complains the whole way, but will not drive! You finally make it to your destination, but you don’t have a hotel room. You have a full itinerary, prepaid for your excursions, made dinner reservations at the best restaurants in town, but figured you’d just Priceline a hotel with a 4-star rating or above when you arrived. Well, you could in fact save a ton of money and score a nice room from a nearly empty resort. On the flip side, you could end up at the last shady motel in town. You’ll likely go on to have wonderful experiences on your excursions, enjoy wonderful meals at the local favorites, but you may not rest well.
After days on the road with my nagging cousin and no assistance with the driving, you are probably exhausted, over it, sleepy. You probably don’t have the time or patience to be selective. You will settle for what you can get.
Where in the world am I going with this? In my opinion, you can pad your retirement accounts, pay off your retirement home, and secure multiple streams of retirement income. If you fail to plan for the unexpected, you may not rest well.
So, why should you care about any of this?
Because we have 78 million aging baby boomers, and the statistics surrounding long-term care or long-term supports and services are alarming!
In an effort to deal with this growing concern, the Long-Term Care Financing Collaborative (the “Collaborative”) began meeting informally in 2012 for the purpose of finding a solution. They have since become an official group, made up of a variety of national experts and stakeholders with varying ideological stances. Their common goal is to improve the way Americans pay and prepare for non-medical care (Long-term supports and services) required by the elderly and those with special needs. In its report released February 22, 2016, the Collaborative recommends a broad package of reforms aimed at empowering people of all incomes to receive high-quality long-term services and supports. Whether you’ve heard about it or not, it’s a big deal!
Here’s what you need to focus on…
According to the Collaborative, there are approximately 10 and 12 million adults who require long-term supports and services, and that number is expected to double by the year 2030. More than two-thirds of older adults will need some type of assistance before they die. Of those, nearly half will have a need significant enough to make them eligible for private long-term care insurance or Medicaid to pay the bill. More than 6 million older adults need that level of care as we speak, and nearly 16 million will need it in 50 years. If the wheels are turning, you may be wondering why long-term care is not a national issue you hear about all the time. Sadly, it’s an important issue that people do not think about until they have a crisis. I hate to break it to you, but the rising costs of long-term care can destroy every dream you’ve ever had about your fabulous golden years.
Chew on that for a few minutes….
No matter how much you’ve saved, the reality is, few people can afford to pay for long-term care without breaking the bank. In fact, the Collaborative reports that a typical American between the ages of 65 and 74 has financial assets of $95,000 and about $81,000 in home equity. This does not include retirement savings, which vary greatly across the country. To pay for one’s lifetime medical expenses with a 90% certainty requires savings of about $130,000 and an additional $69,500 for long-term care costs.
Math is definitely not my thing, but when I crunch those numbers, I get the same answer each time. You will run out of money very quickly if you or a loved one requires long-term supports and services! Yep… All your savings gone…just like that! Living longer… but broke!
If you think you are too young to worry about this issue… chew on this…
The Collaborative estimates that in 2013, family and friends provided 37 billion hours of uncompensated long-term supports and services to adults. This adds up to $470 billion.
BILLION!?! Yes, billion!
No matter how much you love your family, caring for a loved one who needs long-term supports and services comes at a cost. I’ve seen my friends and colleagues try to manage life while caring for loved ones with special needs. It’s no walk in the park! So, unless you are willing to sacrifice your job, your love life, your time, or your health, me & you, your mama and your cousins too…. we need to be proactive planners!
Get that bed made before you get sleepy!