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The Hidden Asset Drain

The Hidden Asset Drain that Can Derail Your Clients’ Retirement Plan

Married couple (ages 54/56) planning retirement in 10 years. Single professional (age 48) planning retirement in 15 years. Sound like any of your clients? Chances are by working with you these individuals are on track to meet their retirement goals. You have discussed risk management and these clients have implemented disability insurance in the event they are unable to work, implemented life insurance in the event of an untimely death, and discussed long-term care insurance to minimize the exposure of costs associated with long-term care. Is there anything missing?

What about these clients’ parents? In the event mom or dad need home health care, assisted living or nursing home care, would mom and dad have money to pay for the care? The reality in many families is they do not, thus leaving their children to provide for their care either physically or financially. This hidden asset drain can derail your clients’ retirement plan by forcing them to reduce retirement plan contributions or even worse, withdrawal retirement funds to pay for mom and dad’s care.

It is becoming more common for individuals to purchase long-term care insurance on their parent’s behalf as a way to manage the financial risk an individual’s parents present. Siblings will often divide the premium costs of the policy. This is also used as an estate preservation tool.

By addressing this with your clients, you are providing insight on a hidden asset drain that very few people recognize. Further, you are avoiding a potential risk management gap within your financial plan.