Have the Talk

Chas is the breadwinner and patriarch of the family. He made the money, pays the bills, invests and manages all finances for the household. What happens when he becomes incapacitated or passes? Sara would be overwhelmed and probably turn to her children for help. Have you had the talk with your kids?

One of the biggest expenses for a couple retiring at age 65 is Healthcare. In a study by Nationwide Retirement Institute, a couple can expect to spend, on average, $260,000 on medical expenses over approximately 20 years which doesn’t even include any nursing care costs. 45% of individuals polled, like Chas have never even discussed these expenses with anyone.

In 2016, Nationwide polled 1316 Americans over the age of 50. Of those who had the talk, half discussed with a spouse, 43% talked about retirement medical costs with their financial advisor and only 19% with their descendants. This is problematic because it suggests retirees aren’t preparing for higher medical costs.

Retirees cite privacy issues as the primary cause for avoiding these discussions. More than half don’t want to “worry” their loved ones and concerned their healthcare costs would reduce the assets they had intended for their offspring. The reality is, it is a family concern. In an effort to reduce costs, many seniors are taking drastic steps: trimming grocery spending, skipping wellness visits and even halving medications to make them last longer.

Sixty percent of those polled were not aware how much Healthcare would cost for each year in retirement. 75% could not estimate long term care costs. 33% of the seniors polled would not be able to pay unplanned expenses as low as $500. That’s frightening.

Have the talk with your spouse, children or beneficiary. It doesn’t have to be awkward. Where do you plan to live in retirement? How do you plan for it? How can you structure your estate to pay for it? HAVE THE TALK.