The Effect of Longevity on Your Life Priorities Presented by:
Cynthia Hutchins, CRPC®, CIMA® Director of Financial Gerontology
Chartered Retirement Planning Counselor℠ and CRPC® are trademarks or registered service marks of the College for Financial Planning in the United States and/or other countries. CIMA® is a registered service mark of Investment Management Consultants Association, Inc.
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The material presented at this seminar should be regarded as educational information only and is not intended to provide specific advice.
Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax, healthcare or accounting advice. You should consult your health care, legal and/or tax advisors before making any financial decisions.
All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. They are not backed by Merrill Lynch or its affiliates, nor do Merrill Lynch or its affiliates make any representations or guarantees regarding the claims-paying ability of the issuing insurance company. Long-term care insurance coverage contains benefits, exclusions, limitations, eligibility requirements and specific terms and conditions under which the insurance coverage may be continued in force or discontinued. Not all insurance policies and types of coverage may be available in your state. Merrill Lynch makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a registered broker-dealer and member SIPC, and other subsidiaries of Bank of America Corporation ("BofA Corp"). Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp. Investment products offered through MLPF&S and insurance and annuity products offered through Merrill Lynch Life Agency Inc.: Are Not FDIC Insured
Are Not Bank Guaranteed
May Lose Value
Are Not Deposits
Are Not Insured By Any Federal Government Agency
Are Not a Condition to Any Banking Service or Activity
© 2016 Bank of America Corporation. All rights reserved. | ARCHV433 | 06/2016
Baby Boomers have redefined how we age.
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Just like they redefined fashion. 4
And music.
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And how we retire.
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The next phase brings up some questions.
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Evaluate your most important priorities
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Health
Longevity and health
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Health
Health is the big unknown.
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Health
Percent of people 65+ who say the most important ingredients for happiness as they age are: Having good health
81%
Being financially secure
58%
Having loving family and friends
36%
Having purpose Continually trying new things
20% 5%
Source: Merrill Lynch research study, “Health and Retirement: Planning for the Great Unknown.� May 2014.
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What will your healthcare cost you?
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How illness can affect your financial strategy
#1 Illness is the #1 reason people retire earlier than planned1 72% of retirees and pre-retirees said health problems are their #1 concern. 1Source:
Merrill Lynch research study, "Americans' Perspectives on New Retirement Realities and the Longevity Bonus" May 2013
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Healthcare costs are on the rise
Healthcare costs more than doubled from 2000 – 2010 when compared to inflation Healthcare costs increase with age Source: “The Effects of Rising Healthcare Costs on Middle-Class Economic Security.” AARP Public Policy Institute 2013.
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Health
Lifetime out-of-pocket expenses beginning at age 65
Source: EBRI, Savings needed for Medigap premiums, Medicare Part B premiums, and Medicare Part D Expenses for retirement at age 65. Assumes 4% after tax rate of return on investments and a 10% increase in Medigap premium. 2010
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Medicare alone is not enough
Medicare covers only 62% of medical expenses associated with healthcare.1 Due to gaps in traditional Medicare, 90% of beneficiaries use supplemental health insurance.2 1. Source: “Setting the Record Straight About Medicare.” AARP Public Policy Institute (2012). 2. Source: “Medicare Chartbook.” Kaiser Family Foundation (2010).
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Understanding long-term care needs and costs
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Likelihood of needing long-term care By 75
By 85
By 95
17 47 57 in
in
in
Source: www.longtermcare.gov; 2015
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My Own Home: The #1 Choice for Long-Term Care
Base: Age 50+ retirees
Source: Merrill Lynch research study, “Health and Retirement: Planning for the Great Unknown.” May 2014.
Health
Common signs and symptoms of cognitive decline • Frequent difficulty in remembering simple things • Difficulty in following conversations or basic instructions • Frequent loss of train of thought • Forgetfulness (appointments and scheduled events) • May get lost in familiar surroundings or locations • Impulsiveness Source: Merrill Lynch research study, “Health and Retirement: Planning for the Great Unknown.” May 2014.
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Alzheimer’s: the most worrisome disease of later life Percent with chronic conditions, by age 18-44
27%
45-64
63%
65+
86%
6%
3% 2%
Alzheimer’s disease/dementia
10%
Cancer Stroke 54%
26%
Heart disease Diabetes Arthritis
1. Source: Ward, B.W. et al. (2014). Multiple Chronic Conditions Among US Adults: A 2012 Update. Preventing Chronic Disease. 11. 2. Source: Merrill Lynch research study, “Health and Retirement: Planning for the Great Unknown.” May 2014. 22
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Top worries about Alzheimer’s disease
1 Being a burden on my family 2 Losing dignity 3 Being more isolated from friends and family 4 Not being able to do the things I enjoy 5 Health care costs and related expenses Source: Merrill Lynch research study, “Health and Retirement: Planning for the Great Unknown.” May 2014.
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The Caregiver’s Burden “Mom refused to go to the doctor, and when we finally did go, she pretended like she was fine. But Alzheimer’s was already changing how she thought and acted.” “As the disease gets worse, I’ve had to start organizing more and more of her life. That means everything from buying her groceries, to making sure she takes her medicine, to managing her finances.” “My retirement plans didn’t account for becoming a caregiver. The costs are adding up, and it’s getting harder to concentrate at work. I need help, but I don’t know where to get it.”
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Annual median cost of long-term care
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1. Source: National Clearinghouse for Long Term Care Information, U.S. Department of Health and Human Services. Available at www.longtermcare.gov. 2014 2. Source: Genworth. Georgia – State Median: Annual Care Costs in 2014. Available at: https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html
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