What topics are advisors discussing with their clients?
And What Do Clients Think?
Clients see value in discussing long-term care with their advisors:
- 20% Very Valuable
- 58% Somewhat Valuable
- 78% Valuable
Without planning for long-term care, all the attention and work devoted to retirement saving, asset allocation, and retirement income planning could be significantly disrupted. You and your client may feel they have enough assets to cover long-term care, but we encourage you to think more critically about this. Assets in a portfolio are really “capital” in nature; that is, their purpose is not to be used to pay for care—or any other expense in life—but to generate predictable streams of income that will keep up with a rising cost of living that the client cannot outlive. Using capital to pay for care creates unintended issues with:
- Unnecessary taxes
- Market timing
- Liquidity issues
- Leaving a legacy
And perhaps most importantly, every dollar used to pay for care is one dollar less available to generate income to keep ongoing commitments. And that can lead to a financial death spiral. The equation you want to consider is: “Reallocation of income and assets = severe reduction in quality of current & anticipated lifestyle.”