71 The Alabama Lawyer 394 (2010). Preparing for Risk Protects Your Family and Preserves Assetsm.

• Author: By Patty McDonald

Alabama Lawyer

2010.

71 The Alabama Lawyer 394 (2010).

Preparing for Risk Protects Your Family and Preserves Assetsm

Preparing for Risk Protects Your Family and Preserves AssetsBy Patty McDonald Financial security and peace of mind go hand in hand. Most people like to feel that they are in control of the money they work hard to earn and save. Unfortunately, certain situations may preempt that control. If you or someone in your family requires long-term care, your current financial and health-care planning probably will not provide sufficient coverage. Health insurance, including Medicare and Medicare supplements, does not cover long-term care. Even with the very best financial plan, spending the current average of $50,000-plus per year on long-term care will have an impact on a family's lifestyle.

Unfortunately, many people ignore the risk of this type of care, placing an unexpected burden on their family and risking the depletion of assets. A long-term care situation does not just affect the individual receiving care, but the entire family. A special section on retirement planning in the Wall Street Journal listed failing to consider long-term care needs as the number one mistake investors are making with their retirement savings. In the section's featured article, "Cracks in the Nest Egg," Joe Bowie, chief executive officer of Retirement Investment Advisors, Inc. states, "When people think about threats to their retirement savings they primarily think about market losses. What they fail to consider are the non-market-related threats-health care, long-term care-the catastrophic events that can cause as much harm, or more, as a volatile market."

The risk of needing care is high-70 percent once one reaches ages 65. Currently 40 percent of people receiving long-term care services are adults between the ages of 18 and 64, the result of chronic health conditions, accidents and illnesses. One out of four families is currently faced with long-term care, and many are in the "sandwich generation," caring for both their dependent children and their parents. So why do so many ignore the risk? Most people do not want to envision a time in their life when they may have to be dependent on others, or they think they are immune to this risk altogether. But due to advances in medicine and technology, and therefore increased life...