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445 days.
That's all that stands between 60-year-old Joan Kneeland and
retirement. Next summer Joan and Richard, her husband of 38
years, will finally make good on their plans to spend more
time at their cabin in Maine. "I love the outdoors," says
Joan. "We're snowmobilers and we love to fish. We'd love to
be up at our cabin in June when the flies hatch."
Joan has
been saving for that day a long time. Both she and Richard
contribute to 401(k) plans, and both will have pensions.
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They have
term life insurance, mutual fund savings and wills. Their
only debt is a home equity loan.
They've
also thought about some serious issues. Joan's mother suffers
from dementia, and "it's made me really, really aware of how
we don't want our two sons to be responsible for us," she
says. So the couple recently purchased long-term care (LTC)
insurance to cover costs associated with nursing home or in-home
care. They hope they'll never need the coverage, but "the
day after we got it, I felt like a great big weight had been
lifted," Joan says.
In preparation
for retirement, the Kneelands have shifted more investments
into conservative bonds, but beyond that, they're not sure
what to do.
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Vital
Stats
Names:
Joan and Richard Kneeland
Ages: 60 and 64
Occupation: AAA travel counselor and foreman
Children: Two adult sons
Home: Windam, Maine
Retirement
goals:
- Spend
more time at their cabin
-
Travel
- Pay
off home equity loan
- Give
stock holdings to their grandchildren
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"How do we
know what money to take from where when we retire?" asks Joan. "How
does anyone know?"
The couple's
confusion is common, says Robert Stepka, a MetLife certified financial
planner from Bristol, Connecticut. "Most people are pretty good
at saving money. Then they transition into retirement and don't
know what to do." He offers the following timely advice to soon-to-be
retirees:
Make
a plan -- now. "The transition from earning to burning
is a tough one, and you really need guidance," says Stepka. "You
need to understand what inflation will do and realize that your
biggest expense is likely to be health care." He applauds the Kneelands
for their progress so far but suggests they need a financial planner
at this point to help them transition into the right mix of products,
including income-producing -- but safe -- investments.
Expect
the unexpected. The Kneelands have taken an important
step by purchasing long-term care insurance, although Stepka usually
recommends his clients think about it even earlier. "If you're 40
and can afford the premium, that's the time to buy," he says. Not
only does the price go up as you get older, but you're more likely
to have a medical condition that makes it hard to get coverage.
Consider
life insurance. People at
retirement often think they no longer need life insurance. But,
Stepka points out, it can be a powerful tool for distributing wealth,
paying estate taxes or even passing along real estate.
Take
an advisor to work. Talk to a financial planner before
signing retirement papers. Employers by law cannot offer advice
relating to retirement options. "Invariably, people walk out of
human resources and don't know what they signed," says Stepka. "Often
they've taken the choice they thought was best -- and it was the
worst." Stepka often goes with clients to retirement meetings. "I'm
there to help them make those decisions," he says. "A planner who
isn't willing to come to a meeting isn't the right one."
The
MetLife Advantage: Long-Term Care Insurance
"Much like a
fire, or even a critical accident, the cost of long-term care can
quickly rob a person of both their choices and hard-earned savings,"
says Rich Cohen, a long-term care insurance specialist in Bedford,
New Hampshire. In fact, recent estimates from the Insurance Information
Institute place the odds of needing long-term care at greater than
one-in-three for those over age 65, and Cohen points out that Medicare
pays only for very limited coverage.
MetLife has
offered long-term care insurance for 15 years, with a history of
stable rates and high marks for financial stability from leading
ratings agencies. MetLife customers can purchase long-term care
products that offer the following benefits:
- Coverage
for nursing homes, home health care, assisted living facilities
and even adult day care.
- Compensation
for family or friends who provide informal care.
- One-on-one
advice from Nurse Care Advisors, registered nurses with experience
in long-term care.
Link to more
about Long-term Care Insurance on
MetLife.com
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