Financial, Tax, Estate And LTC Planning Need To Be Integrated

Over the past 30 years, medical and pharmaceutical advancements have increased boomers’ longevity by decades–far beyond that of their parents. In addition, many boomers married and had families at much later ages than their parents, thus creating what is frequently referred to as the “sandwich generation.”

As a result, boomers now face the responsibility of not only taking care of their own growing children, but simultaneously also seeing to the extended needs of aging and frail parents. All of this is happening against the backdrop of a seriously compromised Medicare, Medicaid and Social Security system.

It’s not surprising, then, that one of the biggest fears of today’s boomers is outliving wealth.

Today’s generation sees their parents setting goals for early and significantly longer years of retirement than did prior generations. Financial planning to accumulate wealth, coupled with estate planning to preserve and support that wealth through decades of retirement, require a different strategy, one that involves long term care planning and solutions.

Although most people think of LTC as an issue that only concerns the elderly, approximately 40% of LTC services are provided to people between the ages of 18 and 65. And with health care costs constantly increasing, it’s never too soon to purchase LTC insurance.

Changes in the health care system, tax and Medicaid legislation, such as the Deficit Reduction Act of 2006, have made a significant impact on estate-planning needs. Despite what many Americans would like to think, Medicare and Medicaid do not provide a safety net for LTC.

These days, it’s even more essential that people become active in planning for their extended futures. Everyone should create a will, establish a health care proxy and specify guardianship arrangements if they have children.

Although the majority of insurance needs that people face have not changed much over the years, the rising costs of living along with the increasing trend toward two-income families have made insurance even more essential. Today, for instance, both life insurance and long term disability are needed by both wage earners, to provide for the loss of crucial income in case of the death or disability of one partner or spouse.

And given the increasing costs of health care, hospitalization and medical care, coverage is no longer optional; it’s a must. All these changes have contributed to the need for early and continuing updates in both financial and estate planning.

LTC insurance planning includes budgeting for the cost of the policy throughout the retirement years to provide the safety net that can preserve people’s dignity, quality of life, and the retirement savings they’ve earmarked as their family’s legacy. The sooner they put a plan in place, the more likely it is that their good health status will qualify them for coverage, possibly at discounted preferred health rates.

Understandably, many people have great difficulty facing and discussing the issue of long term care, not to mention the financial costs involved for the rest of their lives. Yet with increasing frequency we are seeing more and more articles urging financial and estate planners to recommend LTC insurance protection to their clients.

In today’s world, financial, tax, estate and long term care planning are all integrated. No one specialist can provide all the expertise needed to put and keep all affairs in order, as needs and the laws constantly change.

Therefore, to reach their retirement and estate planning goals these days, people must actively seek wise and well-informed counsel to help plan their estates and protect themselves and their families–a goal that can best be accomplished by a cohesive group of professionals working together.

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This article first appeared in the July 2008 edition of LTC e-Wire, an online publication of National Underwriter Life & Health. You can subscribe for free to this monthly e-newsletter by going to .

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