New York residents who are planning for retirement are generally focused on income streams, managing risk, minimizing tax implications and Social Security. A key aspect of planning for retirement is the inclusion of health care planning. Many financial planners fail to make it a focus in their conversations with prospective clients, but that could be doing them a disservice.
A major health crisis can render even the ideal investment and wealth protection plan insufficient. Recent estimates indicate that the average American couple will be required to pay $260,000 for out-of-pocket health care expenses during retirement. Long-term care, which is not included in that figure, is not covered by Medicare, and assisted living can run several thousand dollars a month in a modest facility. Either way, a hard look needs to be given at the prospect of health care creating a drain on assets during one’s golden years.
Conversations between loved ones should take place as well as with financial planners regarding the prospect of debilitating health care needs and priorities. Unlike general cost of living projections, the cost of required health care is much more challenging to ascertain for financial planners. This uncertainty can make some planners uncomfortable initiating this particular dialogue, but one cannot be fully prepared for retirement without a holistic review of potential contingencies putting assets at risk for depletion. One solution for many people is the purchase of long-term insurance, which can be expensive but provides a secure hedge against health-related uncertainties. Another option is Medicaid planning, which, in conjunction with an appropriate IRA structure, can ease the burdens of long-term care.
Every family situation is unique and requires individualized planning. A qualified and experienced probate and estate administration attorney can help provide the peace of mind that comes with knowing that contingencies, such as health care needs, have been addressed before an emergency occurs.