Averages

I’m going to go completely count to our discussion and take longevity off the table.  And, let’s talk about averages and average planning.

According to a research brief that I read today from Richard W. Johnson (Urban Institute) and Judith Dey (U.S. Department of Health and Human Services) …

• 56% of the population turning 65 today will experience some need for long term care, and
• 22% of adults will have a disability lasting more than 5 years, and
• In today’s dollars, the average American will incur $120,900 of future costs for long term (care) support & services, and
• 37% of families impacted will pay out of pocket for the care received, and
• 14% will spend at least $100,000 on care, and
• This does not count lost wages due to providing care which would average out to be $204,000.

So, let me ask you a question.  Are you and your family average?

Let’s play this forward 20 years.  Assuming a modest 2.8% rate of inflation …

• the average American will incur $210,033 of long term care support & services, and
• 14% will spend at least $173,724 put of pocket on care, and
• On average, lost wages as a result of providing care will be $354,398.

Let me ask you now, are you comfortable being average? 

What if the rate of inflation exceeds 2.8%?  (2.8%, by the way, is the average rate of medical inflation.)

What is the need is longer than average?

What is the plan to address this scenario?

On average, can a client’s plan absorb a half million dollar hit? 

What if that scenario plays out for both spouses?  There is a 70% chance for that to happen with an average duration of 5 years. 

Can their plan absorb a million dollar hit?

What is the plan to address this scenario?

It’s all about being average.

With long term care, there is a boatload of uncertainty about who will need care, how long the need will last, where it will be received, how much it will cost, and what impact will it have on your family and finances.

I have an interesting perspective on this since we are talking averages.  If you are average, you won’t have a plan or an insured plan in place. 

So, being average means leaving the door open to an average long term care event that will cost about a half million dollars.

Now, we have a cost for being average.

Next week, I will share with you an idea how you can create that half million dollar pool of money.

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Just a reminder about another strategy that has caught fire – the million dollar annuity strategy. Learn more about it at  https://fridayswithfisher.com/million-dollar-annuity/. 

My “big ask” of you for the million dollar annuity strategy is to identify 3 or 4 annuity owners 75 or older who might be viable candidates for our leverage strategy then give us a call.