Erik and Nicole’s reaction to planning for their parents is typical of their generation. It’s a real struggle for younger generations to understand the positive role early long-term care planning plays in securing an envisioned lifestyle and retirement. But generations are living longer and longevity brings with it both the good and the less-than-good.
Many people remember their grandparents who seemed able to pay for their own care. Memories are not always a reliable resource. People are living longer and one source of retirement income has seen major changes in the last decade. The world of pension plans has dramatically changed over the years, moving away from defined benefit plans which provided retirees a specified payment to defined contribution plans. Defined contribution plans are saving plans that allows both employers (if they choose) and employees (if they chose) to contribute. Specific payments to retirees are not promised. Familiar examples of contribution plan are 401(k) plans, 403(b) plans, and simplified employee pension (SEP) plans. These plans, properly funded and invested, play an important role in retirement budgeting. Fortunately, both Jackson and Jodi have plans that will help secure their retirement unless they have to prematurely dig into the funds for unplanned extended and long-term care expenses.
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