That popular image of a behemoth nearly crowding you out of your own space—“the elephant in the room”—works well to convey the folly of refusing to acknowledge a problem that ought to be a priority. The problem I’m talking about arises from the fact that, in spite of all our technological advances, we humans are still unable to predict the future, which means we’re still unable to count on living a healthy long life, even if we’re in great shape today.
Therefore, we know (or should know) it’s a real possibility that we, or a loved one, might need long term care at some point. And there you have it: a future event requiring the need for long term care is the elephant in the room, and the problem that ought to be a priority is the failure to recognize the need to plan for the day you come home and find an elephant in your chair.
Many of us, while taking pride in having shown the foresight to plan for our financial future, nevertheless turn a blind eye to this enormous creature looming before us. Yet, its very presence puts our financial plan at tremendous risk.
Chances are, you’re already working on your financial plan to insure ample income throughout your retirement. Part of the planning process includes a regular review in order to adjust for the numerous normal life events that happen along the way, or for those unexpected events that cause our lives to change on a dime.
In this regard, the latest Northwestern Mutual C.A.R.E.* Study released on March 12, 2018, finds that:
Interestingly, although Americans recognize the pervasiveness of long-term care events (more believe it is likelier to happen than outliving retirement savings or job loss), three quarters (73%) have not planned for their own long-term care needs. This gap underscores a disconnect between priorities and actions as more than half (56%) indicated that saving for long-term care is a top financial priority, ranking second after saving for retirement (68%) — even ahead of paying off debt (55%) and saving for a home (30%).
A regular review of your financial plan not only allows for shifts in strategy when your needs or risk tolerance change, but also provides the opportunity to incorporate a long-term care plan when the time is right. This action then results in a synchronized plan that covers your entire financial life. It’s important for everything to work in harmony, to include your being in control in the event you or your loved one experiences an extended health care event that could drastically interrupt or wreck your financial plan.
There’s no doubt that with the sudden presence of an enormous creature (an unexpected long-term care event) showing up in our living room, we’d rewrite our schedule immediately to deal with it. Having to react, however, rather than being proactive, presents its own set of thorny problems.
Wouldn’t you agree that it’s preferable to be able to snap to attention if you walk into your room to find the elephant staring at you? Otherwise, as we know from first-hand accounts, facing this beast not only causes emotional panic, but brings tremendous financial consequences that must be dealt with as well.
Nevertheless, there are still too many people around who are steadfast and confident in their disregard of the hovering monster. An extended health care event has the potential for a disaster of elephantine proportions, so please don’t miss the memo about the elephant.
Have the conversation to make certain your plan is protected.
* C.A.R.E.: Costs, Accountabilities, Realities, Expectations