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Why an Income Analysis is a Critical Part of Your Retirement Plan Part 2

Why an Income Analysis is a Critical Part of Your Retirement Plan Part 2

Clear Direction for Your Retirement:

Why an Income Analysis is a Critical Part of Your Retirement Plan Part 2

In the first article of our series “Why an Income Analysis is a Critical Part of Your Retirement Plan”, we detailed several factors that need to be taken into consideration when developing your retirement income plan, including:

  • Increasing longevity for both men and women
  • The reality that woman typically outlive most men by over two-years
  • The fact that women traditionally don’t derive as much Social Security benefit for several reasons

Rising healthcare costs

In this second installment, we’re going to cover an additional healthcare consideration that could significantly eat into your retire-ment savings…long-term care. 

Take Good Care of My Baby

As outlined above, one of the reasons a retirement plan income analysis is so important is that people are simply living longer and living longer means you need to make sure you have enough retirement savings to cover the duration of your life.

Living longer doesn’t always mean living better and with longer lifespans comes the reality of needing care for sickness or general age-related decline that make if difficult or impossible to care for one’s self.

With the very real prospect of the average retiree living to their mid-eighties…84.3-years-old is the average age males live to and 86.7 for females…there is an ever-increasing need for long-term care. On average, over half of all Americans (52.3 percent ) turning 65 will need long-term care at some point…46.7 percent of men compared to 57.5 percent of women.[1]

According to Genworth’s 2019 Cost of Care Survey, median long-term care costs can range from approximately $45,000 to $97,455 per year. Factors affecting the cost include geographic location, type of care needed and length of stay. Those costs obviously represents a substantial cost and could consume a large chunk of your retirement nest-egg, negatively impacting your financial stability and peace of mind.

Government programs of Medicare and Medicaid might not offer a lot of help either. Medicare doesn’t provide benefits for long-term care; while Medicaid does pay for long-term care, it requires “spending down” assets before it will provide any coverage.[2] Waiting to purchase personal long-term care coverage can be expensive, as rates increase with age.

I Wanna Hold Your Hand

Many Americans require care that may not qualify for long-term care facilities or in-home services. As a result, more individuals are finding themselves in the role of primary caregiver, both in the years leading up to and during retirement.

It’s estimated that 34 percent of caregivers are 65 years or older.[3]  In some cases, they are caring for an aging spouse, and in others they are providing for a disabled child. The number of grandparents raising grandchildren has also increased dramatically. More than 2.7 million grandparents have primary custo-dy of their grandchildren, an increase of more than 7 percent from 2009.[4]

Caregivers often find it rewarding to take responsibility for loved ones, but it can also take a toll on the caregiver’s financial and physical well-being. Tending to a chronically ill or disabled loved one may mean additional expenses that place a financial burden on the household. Many caregivers spend more than 20 hours a week providing care for ill loved ones,[5] making it difficult to work outside the home. Taking in extended family may also mean postponing retirement or returning to the workforce to provide for the additional people in the household.

A solid financial plan is flexible and adaptable to life as it happens. After laying the initial groundwork in a retirement income analysis, your financial advisor should meet with you regularly to review the plan and adjust to any life events as they happen, no matter the circumstances.

Your financial advisor can assist you in structuring a long-term care strategy that accounts for your unique needs. The planning conducted in a retirement income analysis can provide you with more choices and options you might not have considered, increasing the likelihood your funds will last as long as you do.

If you need help planning your retirement, contact us today to schedule a free income analysis. We’ll help you determine if you have enough to retire comfortably, when you can retire and help you put all the pieces of your retirement plan in place.


  1. Genworth. “2019 Cost of Care Survey https://www.genworth.com/aging-and-you/finances/cost-of-care.html.
  2. U.S. Department of Health and Human Services. “Medicaid Eligibility: Financial Requirements –Assets.” https://longtermcare.acl.gov/medicare- medicaid-more/medicaid/medicaid-eligibility/index.html. Accessed July 5, 2018.
  3. Family Caregiver Alliance, National Center onCaregiving. “Caregiver Statistics: Demographics.” https://www.caregiver.org/caregiver-statistics-demographics. Accessed July 9, 2018.
  4. PBS NewsHour. Feb. 16, 2016. “More grand- parents raising their grandchildren.” https://www.pbs.org/newshour/nation/more-grandpar- ents-raising-their-grandchildren. Accessed July 2, 2018.
  5. Family Caregiver Alliance, National Center on Caregiving. Ibid. Original content prepared by Advisors Excel. Accessed July 9, 2018.

Investment Advisory services offered through Game Plan Advisors, Inc., a registered investment advisor. Insurance services offered through Wootton Financial Group, Inc. Game Plan Advisors, Inc. and Wootton Financial Group, Inc. are affiliated through common ownership. Neither Game Plan Advisors, Inc nor Wootton Financial Group, Inc. offer legal or tax advice. Please consult the appro-priate professional regarding your individual circumstance. Not associated with or endorsed by the Social Security Administration or any other government agency.
Please consider the investment objectives, risks, charges, and expenses carefully before investing in Variable Annuities. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from the insurance company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
The investment return and principal value of the variable annuity investment options are not guaranteed. Variable annuity sub-accounts fluctuate with changes in market conditions. The principal may be worth more or less than the original amount invested when the annuity is surrendered.
Fixed Annuities are long term insurance contacts and there is a surrender charge imposed generally during the first
5 to 7 years that you own the annuity contract. Withdrawals prior to age 59-1/2 may result in a 10% IRS tax penalty, in addition to any ordinary income tax. Any guarantees of the annuity are backed by the financial strength of the underlying insurance company.
Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. With-drawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.  Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated.

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