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A recent article in Retirement Weekly Newsletter pointed to an important issue for seniors. The sub-title of the headline for the article read, “Average American family faces a 37% shortfall in the income they will need in retirement.” In this difficult economic period when individuals’ 401K’s have become 201K’s, it is clear that we can not count on retirement funds to be there to meet future needs. The article says that average loss for current retirees is 26%. The author, Robert Powell of Marketwatch.Com, gives a host of suggestions about how to overcome this problem. Click on Retirement Weekly Newsletter for the full article.

One VERY scary bit of information he noted was that the average couple retiring today at the age of 65 will need $210,000 to $807,000 to supplement Medicare payments to pay for out-of-pocket health care expenses during retirement. Since most retirees run a 50/50 chance of needing long term care services during their retirement years (a number bandied about by many writers these days) I draw the conclusion that the cash shortfall is likely to relate to the need for extended care services received in the home, an assisted living facility or a skilled nursing home facility. “Where could cash come from to cover these expenses?” you ask. A long term care insurance policy is the most likely source. Over the course of the life of a policy, an owner can leverage the total premiums paid into a tax free benefit of approximately 8-10 times the total premiums paid. Or, play the lottery until he wins it or dies! I’m just sayin’…