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The LTC Wake-Up Call

It’s time to protect clients’ savings with long-term care insurance.

By Stephen A. Moses

The Everly Brothers tune “Wake Up, Little Susie” is not only a golden oldie jangling from our radios, it’s also a telling metaphor for the Baby Boomers’ lack of financial preparedness, especially in the event of long-term care. If they don’t prepare, they’ll soon wake up to the retirement equivalent of “The movie’s over, it’s 4 o’clock and we’re in trouble deep.”

On average, Baby Boomers have saved only 12 percent of what they’ll need to just cover basic living expenses in retirement. If they don’t get busy soon saving more money—and protecting that money with LTCI—they will find themselves deeply in debt and facing impossibly difficult financial obligations. And this just at the time they want to relax and enjoy life.

According to an Allstate report, Financial Retirement Reality Check, 76 million Baby Boomers make up 29 percent of the U.S. population today. In 30 years, Allstate says, 70 million people will be over age 65—more than double the number of elderly people in 1999.

In spite of these alarming numbers, this large, aging population falsely believes that it is prepared for retirement. The survey found that 78 percent of Boomers think they’re prepared for retirement, and 69 percent believe they know how much money they’ll need to maintain their desired lifestyles. But wake up little Susie. The facts tell a different tale.

Boomers have saved only 12 percent of what is needed for basic living expenses in retirement.

According to the survey, Boomers said they would need only $30,000 per year for basic living expenses in retirement. This is optimistic at best. To generate that amount reliably, a retiree would need $1 million in savings. But Boomers have saved only $120,000 on average. Furthermore, 81 percent of the Boomers have no plans to increase their retirement savings significantly.

Despite serious concerns about Social Security’s future solvency, 32 percent of Boomers plan to rely on the government program for most of their retirement income. According to the study, even the events of Sept. 11 have failed to wake them up to the uncertain future.

Time to wake up
The truth is, Baby Boomers really are sleeping through the movie. Most look forward to retirement, but as a group, Boomers’ hopes and expectations do not synchronize with the financial reality. They need to get serious about retirement planning, and an important part of this is obtaining LTCI. If they don’t, they’ll have to answer not to their parents, but to their adult children. And that’s a generation that is expected to be smaller, so it will be a case of too few trying to take care of too many.

Your job as a financial advisor is to help your clients save, invest and insure to prepare for the normal expenses and catastrophic risks of retirement and old age. There is still time for your Baby Boomer clients to prepare for retirement.

If you give advice about retirement, or sell products designed to create, grow and preserve savings, you have a fiduciary responsibility to your clients. You need to make sure they grasp the problems of savings and wealth preservation, and then understand the solutions. But you need to understand the solutions yourself.

Get educated
Are you well versed in the single biggest financial risk aging people face—long-term care? If not, there are training and certification programs that can help bring you up to speed. Here are a few:

Warn your clients that their biggest risk may not be dying too soon, but living too long. Give them the facts and show them how to protect themselves. This is an important mission, so it’s time to wake up Susie, and everyone else, before it’s too late.

For more information on the Allstate survey, go to

Stephen A. Moses is president of the Center for Long-Term Care Financing, a nonprofit, nonpartisan public policy organization in Bellevue, Wash. You can reach him at


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