The Investment Scientist

When Accident Happens …

Posted on: October 13, 2015

A few months ago, a senior client of mine slipped and fell in his basement. He broke his hip and couldn’t get up to call help. He was only found lying in the basement by his tenant two days later.

His life was saved, but he is permanently wheelchair bound and he will need nursing care that costs over $150k per year. This expense alone will run down his personal wealth in a matter of a few years.

As his financial advisor, what could I have done for him?long term care 3

Three years ago when he was just retired from work, he approached me for retirement planning. Upon hearing that he was living by himself and his children were far way, I was adamantthat he bought long-term care insurance. It was costly, over $500 per month in premium. He was very reluctant to “waste” money on insurance, but I was adamant.

For seniors, a major cause for the need of long-term care is slip and fall at home. I was even trying to talk him into selling his townhouse that has two flights of stairs. That was a long shot, but about buying long-term care insurance, I just would not relent.

I wasn’t happy my client was badly hurt in the slip and fall accident, but you bet I was relieved and vindicated that he had listened to my advice and bought the long-term care insurance. Now all his nursing care and assisted living expenses are covered, and his retirement money has not suffered a bit.

When I reflect upon this incident, I can’t help but feel proud of what I do: to foresee the unforeseen, to watch over all my clients’ financial needs, to enable them to live a great life doing what they do best and enjoy most.

I had my reason: folks over 65 year old have a 50% chance of needing long-term care at some point of their lives. The typical duration of need is about 3 years, but it could be more than 10 years in the worst case. Long-term care is expensive now and is getting more so every year. Unless you are a multi-millionaire, you could lose all of your retirement money to long-term care easily.

Schedule a discovery and review meeting  if you need a second opinion of your personal finance and investment, or get my white paper for free: The Informed Investor: 5 Key Concepts for Financial Success.



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Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.


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