Why Do People Not Plan For Long-Term Care?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

In life’s journey, few of us like to dwell on the potential hurdles that lie in the sunset of our years. But, unfortunately, the golden retirement period, the anticipation of relaxation and peace, often overshadows a crucial aspect of life that many overlook: long-term care. In this blog, we aim to help you understand why people often skip this crucial step in their planning and how awareness could help you prepare better.

Lack of Awareness – The Invisible Obstacle

Why it happens

At the top of the list is the lack of awareness. Long-term care involves services that cater to the personal and health needs of people who can’t perform everyday activities independently. However, many people aren’t aware of its importance or even what it truly entails.

Not Plan For Long-Term Care

Examples and impacts

Take the example of Jack, a 70-year-old retiree. Jack assumed his current health insurance would cover future health complications like many. However, he discovered his insurance didn’t cover these non-medical services when he needed assistance with daily activities after hip surgery. This lack of awareness can lead to unforeseen financial burdens and compromises in quality of care.

Denial – The Difficult Truth

Why it happens

The thought of aging, deteriorating health, and possibly becoming dependent on others is a tough pill. Unfortunately, this denial often leads people to not plan for long-term care.

Examples and impacts

Consider Sarah, who never contemplated needing help with daily activities despite her advancing age. When she did require such assistance, the lack of preparation resulted in added emotional stress on top of her physical challenges.

Why Don'T People Plan For Long-Term Care

Misunderstanding of Costs – The Financial Miscalculations

Why it happens

The costs associated with long-term care are often misunderstood, leading to people underestimating how much they need to save or what insurance coverage they need.

Examples and impacts

Meet Daniel, who assumed his Medicare coverage would handle any long-term care needs. Unfortunately, Daniel’s misunderstanding led to a severe financial strain when he discovered that Medicare often doesn’t cover long-term care costs, leaving him to shoulder the heavy expenses.

Optimism Bias – The Overconfident Mistake

Why it happens

It’s human nature to hope for the best. Unfortunately, this optimism bias often leads people to believe they’ll remain healthy and independent, and as a result, they do not plan for long-term care.

Examples and impacts

For instance, Lily is a health-conscious, active individual who believes she wouldn’t need long-term care. But unfortunately, she found herself unprepared after an unexpected health issue and struggled to finance the necessary care.

Not Plan For Long-Term Care

Next Steps

Planning for long-term care may feel like a daunting task in the grand scheme of life. However, we can address these issues by understanding why people overlook them. Lack of awareness, denial, misunderstanding of costs, and optimism biases are reasons people do not plan for long-term care.

Our golden years should be filled with peace, tranquility, and the freedom to enjoy our time. By shedding light on the importance of planning for long-term care, we hope to help you pave the way for a secure and comfortable future. Remember, planning today for potential care needs isn’t about admitting defeat—it’s about empowering ourselves to live our later years with dignity and independence.

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If I have Medicaid, can I not plan for long-term care?

No, Medicaid is not a long-term care insurance policy. It is meant to provide financial assistance in covering the costs of medical and health care for those who qualify as low-income individuals or families.

At what age should I consider an LTC plan?

It is best to consider a long-term care plan when you are in your 50s or early 60s, as this is typically when people start needing more help with activities of daily living such as bathing, dressing, and eating.

Who does not need to plan for long-term care?

It is advisable to consider planning for some form of long-term care coverage just in case. Everyone’s health and needs vary, so assessing your situation is essential.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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