What would you do if you knew that there was going to be a Tsunami hitting the shore of your town by a certain date in the future? Would you prepare or would you wait until it was so close it became a reality? And would it be too late to do something about it?
This is exactly what is happening in the area of Long Term Care for our elderly. We see the Tsunami and have warned our seniors (and their advisors)…yet there is still minimal action happening to take care of this impending storm. Why?
According to an article in WealthManagement.com, “Advisor and Clients alike Fail to Address Longevity Risk,” the numbers are not looking good for the people that have addressed this issue. For example…
- 58% of Advisors say fewer than 25% of their clients currently have a long-term care plan in place today
- 22% of Advisors say that only 25% – 50% of their clients have a long-term care plan in place
- 7% of Advisors say that 50% – 75% of their clients have a long-term care plan in place
- 1% of Advisors say that more than 75% of their clients have a long-term care plan in place
- 12% of Advisors say they don’t know if their clients have a plan in place or not
Based on these numbers, it is clear that both Advisors and their clients aren’t paying attention to the Tsunami that is approaching the shore. When 70% of the Advisors either don’t know if there is a plan in place or that less than 25% of their clients have a plan in place, this is alarming.
As the population ages and lives longer, this becomes an even more pressing issue. According to the report…
“The most common difficulty cited by (52 percent) of respondents is convincing clients to put an LTC plan in place in advance of needing one. Helping clients increase savings for LTC costs without substantially affecting their other financial goals (44 percent) and forecasting caregiving needs and addressing coordination of care (38 percent) were the next two most common responses.”
What is the number one issue?
“I’m amazed by how many people in the industry don’t fully appreciate the risks presented by longevity,” says Devine. “The whole financial services industry is centered around accumulation. … It has not been focused on savings or income and having some form of protected monthly income after you stop working.”
The good news is that this represents a tremendous opportunity to change the situation…recognizing and making plans to deal with the impending Tsunami. I feel the responsibility rests with BOTH the advisors and the clients. Both need to take an active role in figuring this out. Advisors need to know what is going on with their clients and help them put plans in place ahead of time that will work within their lives.
Clients, on the other hand, need to be asking for insights and help in making this become a reality in their lives. They can no longer be passive and figure that if their advisors don’t bring it up then they don’t need to worry about it. They need to take the responsibility of asking for help and assistance in this area so they aren’t surprised somewhere down the road.
If both the advisors and the clients are PROACTIVE with asking these questions, these numbers will change significantly. And if you aren’t sure where to start, ASK ME A QUESTION about it and I’ll be happy to get the discussion started and provide you with any additional information I can to help you get more knowledgeable and informed about the situation.
Let’s both agree this is an issue and work together to help you recognize the Tsunami and move to higher ground BEFORE the storm hits the shore. Working together we can address this and make sure you have the information you need to stop worrying about this issue.