Page 3 - AAG065_Boomer Effect White Paper

02 / american advisors group

THE BOOMER EFFECT:
What Advisors Need to Know about
the $18 Trillion Wealth Transfer

The Boomer Effect in Numbers:

97% 70% 91%

More than 97 percent Yet 70 percent will require For couples, there is a 91
of Americans make no some form of care in their percent chance that one
advanced plans for their lifetimes . of them will require care .
4
4
eventual senior care
needs .
3

A majority of Americans The cost of senior care
falsely believe that their may range from $32,760
medical insurance will pay per year for in-home care
for long-term care . to more than $102,930
5
per year for convalescent
care .
6

A 70 percent probability means that senior care is the most insurable event in our 3 American Association for Long-Term Care
Insurance. Retrieved December 18, 2014 from
lives and yet less than three percent of the U.S. population maintains long-term care www.aaltci.org/long-term-care-insurance/learning-
center/fast-facts.php
insurance. With such a significant need, why do so few plan ahead? The first reason is 4 USA Today (2016, October 18) “Five Facts You
the misconception by most Americans that long-term care will be paid for by their medical Didn’t Know About Retirement” USA Today, Oc
18, 2016 Jason Hall. Retrieved March 16, 2017,
insurance . It is understandable that making plans for the last few years of life is at the least from http://www.usatoday.com/story/money/
5
personalfinance/2016/10/18/facts-retirement-
an uncomfortable discussion for some families. Some may simply assume there will be social-security-long-term-care/91430992/
government assistance when the time comes. The reality is that Medicaid will pay for most 5 The Long-Term Care Poll. “Long-Term Care in
America: Expectations and Preferences for Care
long-term care patients in the U.S., but it is targeted to those with low income and fewer and Caregiving.” Retrieved March 16, 2017, from
www.longtermcarepoll.org/Pages/Polls/long-term-
assets. For clients in the middle-class, it can come at a great price. For some boomers, care-in-america-expectations-and-preferences-for-
care-and-caregiving-research-highlights.aspx
even after spending down assets, Medicaid looks to see if assets were liquidated to qualify, 6 John Hancock (2016). “Cost of Care Survey.”
and in the end uses a recapture provision to get repayment from the estate. Oftentimes, John Hancock. Retrieved March 16, 2017,
from www.jhltc.com/uploadedFiles/PDFs_for_
there is nothing left for the heirs after an extended convalescent stay. Newslinks_and_Banners/September_2015/
LTC_1167_0916_FINAL(3).pdf