Are You Underestimating This Key Retirement Need?

Dreaming about your future is one thing. But planning for it is an entirely different matter. One is about hopes and wishes, the other is about making smart decisions today that will give you the most secure and content tomorrows.

There is a place for both, but I hope you are eager to listen to me on one essential piece of retirement planning that you can’t afford to ignore: needing some/more/a lot of help as you age.

Let’s agree to deal with facts, okay? And the fact is that as we age it is natural (if not inevitable) that many things we do for ourselves today we may need help with later in life. The technical term for this is “Activities of Daily Living.” This includes cooking, cleaning, bathing/going to the bathroom, and just generally getting around your home.

I imagine you just read that as the vibrant, mobile person you are today and thought, “Oh Suze, that’s so not going to be me.”

My friend, that is veering off into the realm of dreaming. Don’t get me wrong…it may come true, but we also need to plan for the possibility you indeed may need help. That’s the only way to live securely in retirement.

A recent analysis from the Center for Retirement Research at Boston College can help you understand the potential need.

The analysis estimates that for people over 65, more than half will have intensive care needs, which is defined as needing help with at least two “Activities of Daily Living,” or because of cognitive decline.

For 14% the need for intensive care will last less than a year, for 20% it will last between one and three years, and for 18% the need will be for more than three years.

And women are at greater risk. The 52% probability of needing major care breaks down to 46% for men and 56% for women.

The reality is that most older people with care needs rely on family.

I understand that might be the only solution, but right now, when you are younger and can do some planning around this retirement reality, perhaps you can rethink how you will deal with potential later-life care needs. While there is often no question that family will step in if needed, I imagine you would prefer to not burden them with this.

This is especially important for women married to men, or in a committed relationship with a man. Men, on average, don’t live as long as women, and in many relationships the man is older. The upshot is that many wives/female partners are the ones caring for a husband/male partner. Yet if and when the husband dies first, who is going to care for the wife?

The typical assumption is that other family—adult children or grandchildren—will step in. And that may be the best solution for you, and your family. But as I said, I think some of you don’t want to put that responsibility on your loved ones.

And that brings us back to planning. Can you save more today to have more money later to hire professional help when needed? Or what about moving to a community that offers some support, if needed, as you age? And I always recommend thinking through the potential huge value of long-term care insurance (LTCi). My go-to expert for LTCi is Phyllis Shelton at gotltci.com.

I appreciate it may not be easy to think about an older you who would benefit from support and help. But committing to that possibility today is how you care for yourself and your loved ones years from now.