For Want of a Plan

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Long-term care may be a growing concern in America, but you won't hear it discussed at many dinner tables. Fewer than one in three parents of adult children say they've talked about long-term care with their kids, according to a new survey by The National Council on the Aging (NCOA) and John Hancock Mutual Life Insurance Co. Instead, most families confront the issue too late, when a parent is hospitalized or needs extensive care. "Then they have three or four days to come up with a plan," says Gail Schaeffer, vice president at John Hancock.

Those quickie plans often entail dipping into college education funds and retirement nest eggs. Of survey respondents who've already provided financial assistance for long-term care for family members or friends, 26 percent used money set aside for retirement; 19 percent took a second job; and 12 percent raided savings meant for a child's education. James Firman, president of the NCOA, says boomers face a "triple squeeze": caring for their kids, their parents, and also planning for their own potential long-term care needs. "In the next ten years, long-term care will replace childcare as the chief concern for boomers," Firman adds.

Boomers and their parents differ sharply on how to pay for long-term care. Roughly 50 percent of adult children say they would use money designated for their child's education; 93 percent of parents would not want their kids to siphon from college funds. Of adult children, 69 percent would sacrifice job advancement to care for mom and dad; nine out of ten parents would not want their kids to make such a sacrifice.

Long-term care insurance may be one way to ease financial strain. According to the Health Insurance Association, about 5 million LTC policies exist today-relatively few compared to the 163 million group life insurance policies out there. Maybe that's because only 21 percent of companies with 500-plus employees currently offer LTC insurance as a voluntary benefit, Schaeffer says. John Hancock wrote its first LTC policy in 1987. Three-fourths of survey respondents said they would likely buy a LTC policy if it were available through work. And turn up your hearing aid, Uncle Sam: 91 percent favor making LTC insurance premiums tax deductible.

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