Retirement Blindspots #3

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Retirement Blindspots #3

Some life & financial factors that can be overlooked.

We all have a “blue sky” vision of the way retirement should be, yet it helps to plan for retirement with a little pragmatism. Fate may alter the course of our retirement in ways we do not currently anticipate. So, as we plan for the next act of life, we may want to think about (and plan for) some life and financial factors that are often overlooked.

We may face an insurance coverage shortfall. Some of us rely on employer-sponsored health insurance. If we have to retire before age 65, how do we insure ourselves until we become eligible for Medicare? Will we be able to find coverage?

Beyond that basic question, we need to think about insurance from a couple of other angles. Will we need long-term care coverage? It seems to get more expensive each year, but as medicine and health care continue to advance and evolve, the possibility of a gradual rather than sudden death may increase. The wealthy may have the assets to contend with long-term care costs, but the middle class rarely does. In Genworth’s 2016 Cost of Care Survey, the median annual cost for a semi-private room in a nursing home is $82,125. In California, it is $91,250; in Florida, $89,060.*

Additionally, few pre-retirees have disability insurance. Some employers do provide it, but many do not. A small percentage of us will become disabled in our fifties or sixties, or become ill to a point where we cannot work for an extended period of time. If we don’t have disability insurance, how do we make ends meet? We may be tempted to draw down retirement savings.

Disability insurance and long-term care coverage may prove more essential to retirement planning than many of us realize.

* Citations. genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html [4/11/16]

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