Expert Contributor | By Terald Shaw, Financial Advisor, CLTC®, BFA™, Thrivent
Hopefully, you already have a comprehensive financial strategy in place for your short- and long-term goals. Yet you may be missing a critical component: a plan for extended care. If you’re unsure what extended care is or how to incorporate it into your financial strategy, you’re not alone. And, as we witnessed this past year with the pandemic, life can change at any moment so it’s important to be prepared for the future.
According to Thrivent’s 2021 Extended Care Planning Survey, 70% of Americans don’t have a documented extended care plan in place for themselves or a family member. Of those who participated in the survey, over half (51%) said COVID-19 did not change their approach to extended care planning at all. This research was conducted in partnership with data intelligence company Morning Consult and polled 2,200 adults across the country between March 11-15.
As defined in the survey, extended care is non-medical care for those who need assistance with basic daily activities such as dressing, bathing or using the bathroom due to a physical or cognitive impairment. An extended care plan should outline your preferences if the need for long-term care were to arise, a designated decision-maker for your care needs, living preferences, and how you’re going to fund your care.
Furthermore, the survey revealed that 78% of Americans over the age of 45 report do not have a plan in place, even though the likelihood of needing extended care increases with age, and 59% haven’t spoken to anyone about creating such a plan. Additionally, 75% of survey respondents said it would be difficult to pay for long-term care and more than half (52%) wouldn’t be able to fund their care if they needed it today.
These findings expose gaps in how people are planning for and thinking about their extended care strategy. It also reinforces the importance of including extended care as part of a comprehensive financial strategy. When you make these important decisions and incorporate them into your overall strategy while you’re healthy versus waiting for a crisis to occur, you’ll likely feel closer to achieving financial clarity and have more confidence about the future.
Below are a few suggestions from Thrivent to help you start thinking about an extended care plan and how it may fit with your broader financial strategy:
1. Document the important elements of your plan:
You should have a written plan that provides your family with clear directions about how to handle your care. As noted above, it should include the following: 1) what you want to happen if you should need long-term care; 2) who the primary decision-makers are in executing your care; 3) where you want to live and; 4) how you intend to pay for your care.
2. Discuss your wishes with loved ones.
As you’re developing your plan, communicate with family so there’s no question about your wants and wishes. If necessary, take time to make any changes to your plan based on their input and feedback. By being proactive with extended care planning and having a direct dialogue with those you love, you can have confidence knowing that you’re ready for the future, no matter what happens.
3. Consider how you will fund your extended care wishes.
Funding care isn’t a one-size-fits-all. There are different features for various care options, so it’s important to understand the range of costs that may be involved, and how those will factor into your broader financial strategy. Planning ahead will help you figure out the best way to anticipate and navigate these possible expenses.
The pandemic has reinforced the importance of having a comprehensive financial strategy — one that includes extended care. It’s important to have these critical conversations with your loved ones early on and while you’re healthy. By taking the necessary steps to having an extended care plan, you’ll be one step closer to achieving financial clarity, enabling a life full of meaning and gratitude.
This article is not intended to be used as a solicitation for long-term care insurance but is instead meant to provide helpful information that reinforces the importance of extended care planning.
About Thrivent: Thrivent is a diversified financial services organization that helps people achieve financial clarity, enabling lives full of meaning and gratitude. Thrivent and its subsidiary and affiliate companies serve more than 2.3 million clients, offering advice, insurance, investments, banking and generosity products and programs over the phone, online as well as through financial professionals and independent agents nationwide. Thrivent is a Fortune 500 company with $162 billion in assets under management/advisement (as of 12/31/20). Thrivent carries an A++ (Superior) rating from AM Best, a credit rating agency; this is the highest of the agency’s 13 rating categories and was affirmed in June of 2021. Rating based on Thrivent’s financial strength and claims-paying ability. Does not apply to investment product performance. For more information, visit Thrivent.com. You can also find us on Facebook and Twitter.
Thrivent is the marketing name for Thrivent Financial for Lutherans. Insurance products issued by Thrivent. Not available in all states. Securities and investment advisory services offered through Thrivent Investment Management Inc., a registered investment adviser, member FINRA and SIPC, and a subsidiary of Thrivent. Licensed agent/producer of Thrivent. Registered representative of Thrivent Investment Management, Inc. Advisory services available through investment adviser representatives only. Thrivent.com/disclosures. 3679650.1
Terald Shaw, CLTC®, BFA™ | Financial Advisor | 407-305-2591 | terald.shaw@thrivent.com | connect.thrivent.com/terald-shaw
