Monday, May 22, 2006

Retirement expenses that can blow your nestegg

It's been a "challenging" couple of weeks. My parents were finishing a tour of California and ending in San Diego where I live. They were to spend 3 days near me and then head home to Florida.

The day they arrived in San Diego my Mom missed a step and fell wrong on her hip. It was broken and she required immediate total hip replacement. Not only did the logistical nightmare begin, but now the expenses are multiplying quicker than the US debt.

My parents are the type of people that believe they would never need long term care insurance. They are typical of many aging baby boomers who think things only happen to other people. Now they know.

I am diverging today from my usual capital gains post in hope that even one person may benefit from my parent's story.

Since they live in Florida, my Dad had to cancel his trip back and pay the penalty to change his flight. He was able to stay with me and have me as a temporary chauffer, but not all are that lucky.

My mom went from the hospital to acute rehab (at $1500./day) and then will have to go to assisted living until the doctor feels she is ready to fly home. She will probably need to upgrade to business or first class to be able to stand the long flight. Who knows how much post therapy she will need in the coming months.

They have good health insurance. It doesn't cover custodial care or assisted living. My parents have a pension and a paid for house, but really can't easily afford 20-30K out of savings. Their budget is tight.

The moral of the story is, stuff happens. More than you might want to admit. This is probably the first of several medical crisis with a lasting consequence.

For all my clients that have chosen to just "pay their capital gains taxes", think of how having that extra money working for them would have helped in a similar unexpected event.

Statistics say that 60% of people over 65 will need long term care. PLEASE be sure you can afford to cover your expenses if you choose not to have coverage. One mis-step can cost you your retirement savings.

Paula Straub
SaveGainsTaxaskpaula@savegainstax.com
Free report at KeepYourCapitalGains