The Center for Retirement Research recently reported that 64% of pre-retirees will be at risk of not having enough money saved to maintain their current lifestyles. That means that 2 in 3 retirees will have to reduce their standard of living in retirement.
If no major medical issues arise, it may not be so bad. But we are living longer, and with that comes an increased chance of needing some sort of long term care. Unfortunately, most couples are not financially prepared for paying that type of expense out of pocket. Here are four reasons to consider buying long term care insurance:
It is easier to buy it when you are young
It may be hard to try to justify the expenses when we are in our 40s and 50s and nothing is wrong. But we must consider that we may not be able to buy it if we wait too long.
Our health is better when we are younger. According to the American Association for Long Term Care Insurance, about 70% of applicants ages 45 to 54 are accepted. However, acceptance drops to less than 40% for applicants between the ages of 65 and 74.
There is also a big jump in the cost as we get older. The annual cost of a policy for a 65 year old is double that of the cost for a 55 year old.
You never know if you will actually need it
We all think we will be healthy and never find ourselves in a long term care facility. But how realistic is that? Studies show that almost half of us will need some form of long term care during our lives.