Friday, June 21, 2002
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*** New content posted today in the Center for Long-Term
Care Financing's Donor-Only Zone includes:
The "LTC Week in Review" for June 17 to 21, 2002:
LTC E-Alert #157--WWW.GOVBENEFITS.GOV
LTC E-Alert #158--Washington Post Profiles Assisted Living
LTC E-Alert #159--News on Glaucoma, Alzheimer's and Diabetes
LTC E-Alert #160--Handy CD-ROM with Info on Strokes
LTC E-Alert #161--ALF Savvy
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LTC BULLET: WAKE
UP, LITTLE SUSIE
Center for Long-Term Care Financing President Stephen Moses
wrote the following article. It was
published in the May 2002 issue of "Advisor Today," the monthly
journal of the National Association of Insurance and Financial Advisors.
Read it here in the original or jump to the edited version, titled
"The LTC Wake-Up Call," published on the magazine's website:
Wake Up, Little Susie, Wake Up
Stephen A. Moses
When we were young and innocent, we danced to that Everly
Brothers tune with nary a care in the world.
Nowadays, the song is a telling metaphor for our generation's lack of
financial preparedness. Soon, we'll
wake up to the retirement equivalent of "The movie's over, it's four
o'clock, and we're in trouble deep."
On average, baby boomers have saved only 12 percent of what
they'll need just to cover basic living expenses in retirement.
If we don't get busy saving soon, our generation will find ourselves
deeply in debt and facing impossibly difficult financial obligations, just when
we want to relax and enjoy life.
According to a recent "Allstate Financial Retirement
Reality Check," 76 million baby boomers comprise 29 percent of the United
States' population today. In 30
years, 70 million people will be over age 65, more than double the number of
elderly in 1999.
Yet, this gigantic aging population believes falsely that
they are 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 lifestyle. But, wake up
Susie, the facts are very different.
Boomers said they would need only $30,000 per year for
basic living expenses in retirement, optimistic at best. To generate that amount reliably, however, they'd 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 over Social Security's solvency, 32 percent of boomers plan to rely on
that program for the majority of their retirement income. According to the study, even the events of September 11, 2001
failed to wake up our somnolent generation.
Boomers really are sleeping through this movie.
A majority of us are looking forward to retirement and 63 percent of us
say those will be the best days of our lives.
But as a group, our hopes and expectations do not synchronize with the
hard facts of financial reality. We
boomers need to get real about retirement planning.
If we don't, this time around, we'll have to answer not to our parents,
but to our adult children. It is
that much-smaller generation that will have to take care of us if we can't take
care of ourselves.
So, before we have to admit "We fell asleep, our goose
is cooked, our reputation is shot," let's wake up, smell the coffee,
sharpen some pencils, and get to work. Save,
invest and insure to prepare for the normal expenses and catastrophic risks of
retirement and old age. There is
still time for us baby boomers to prepare for retirement and to enter our golden
years with a happy "Oh, la la."
Same song, second verse:
No one is more important to the task of waking up our sleepy generation
than America's financial advisers and insurance agents.
Maybe the general public can be forgiven for succumbing to the lullaby of
easy living and a government-induced entitlement mentality.
But there is no excuse for professional financial advisers.
If you purvey information or products designed to create, grow, and preserve retirement savings, then you have a fiduciary responsibility to your prospects and clients. First, make sure you grasp the problems and understand the solutions. If the facts presented early in this article were a surprise to you, then you have some serious catching up to do.
Are you completely up to speed on the single biggest
financial risk aging people face, long-term care? If not, you can find a growing list of training and
certification programs on long-term care and long-term care insurance at the end
of this article. [See the published
version of the article at
for this list.]
Once you understand the problems and you're confident that
you possess the solutions, warn your clients that their biggest risk these days
may not be dying too soon, but living too long. Give them the facts. Show
them how to protect themselves. Be
professional, but be passionate. This
is an important mission, perhaps as critical in the long run as homeland
security. So, sound the reveille.
Wake up Susie, and everyone else, before it's too late.
For more information on the Allstate survey, see:
Stephen A. Moses is
president of the Center for Long-Term Care Financing in Seattle, WA.
Reach him at firstname.lastname@example.org
or 425/467-6840, x2 or direct at 206-283-7036.
Or visit www.centerltc.org.
The Center for Long-Term Care Financing is a 501(c)(3) charitable,
nonprofit, nonpartisan think tank and public policy organization with the
mission of ensuring quality long-term care for all Americans.