Long Term Care

Remember the good old days of high school in the eighties? Times were good, the economy was thriving, the cold war was but an excercise in diplomacy, and Ronald Reagan proved himself to be one of the great statesmen of all time.

I certainly remember those days. I was student at one of the most well reputed high schools in California, one of the best in the nation in fact. There was very little that disturbed my little idyllic world of prosperity and comfort, all except for one thing. In sophmore and junior civics class was a long bearded and politically left leaning teacher who kept making fun of us, in fact riduculing us for one thing- social security. In the middle of giving a lesson in the history of Mesopotamia, he would randomly launch into one of his political diatribes and let us know what we were paying for, as gen Xers- his and millions of baby boomers’ retirements. He laughed at all us spoiled miiddle class kids as if it were something to be proud of. I have to admit, I never gave much credence to what this hippie said until now. It is now the year 2006 and millions of boomers are turning grey and cashing in on government promises, promises that we, as the younger generation have to pay for.

Social security is and will be a controversial issue for years to come. But it doesn’t have to be. All you have to know is that it is one of the greatest financial debacles of all time. The fact is , there will probably be nothing left in the bank by the time we(generation X) come to retire for ourselves. This is what President Bush was hinting at when introducing the his new program for privatizing what has been managed by the government. There are a few reason for this, which I will cover in this article.
First we have to remember what Social Security was meant for. It was introduced back in 1933 by President Roosevelt as a means to relieve the extreme poverty caused by the great depression. It was meant to be temporary relief for a particular situation, at a certain point in time. It was meant to provide for people no older than 65(the average life span) in the event of unemployment.

The intention was to offer a way out of a short lived situation and we have now turned Social Security into a national institution, a system of dependency. What may you ask, is it dependent on? In short, it is the burden that the American people have to carry, generation after generation. Each generation literally depends on the one after it, not only to pay for it, but to actually produce enough workers to put back into the system. It is not enough for John Doe to pay Uncle Sam. John Doe must produce heirs to sustain his benefits. Gen Xers are caught in between a rock in a hard place. There are not only a record number of boomers retiring, we are not producing enough children to make the system work.

What is our alternative as the new generation of workers? First of all, we must all take a deep breath and accept the fact that social security is for some and not for others- us, generation X. It is a hard pill to swallow, but unless we do so, we can’t move on. Secondly, we must look at practical alternatives for retirement and what will happen in the event there is no one to look after us in old age. Two out of five seniors are now living in deploreable to acceptable conditions in nursing homes. This number will no doubt increase exponentially once the retirement boom happens. My high school teacher may benefit from social security but he will not be living on fantasy island when he is unable to care for himself.

Will we succumb to the same fate as our parents or will we plan? There are now more options than ever. You can invest in a wide variety of stocks, funds, indexes, bonds, and even life insurance dividends. Investment vehicles are endless. Relatively new on the market is something called long-term care insurance. This new type of insurance has been around for about five years and is growing in popularity.

Simply speaking, Long Term Care insurance is exactly what it sounds like. It’s protection against the financial liability and possibility that you will someday need full or partial living assistance in your old age. You pay a certain amount per month for the promise of a certain level of care as a senior, in a home or for nursing care. The more you pay, the better the care.

Why is this important? Social security, an aging population, and the way we care for our seniors have all made it imperative for all of us to consider the option of long term care. Our “independent” society has made it no longer imperative to live with or care for our parents. It isn’t very sexy for young people to live with their parents. And the elderly are in danger of feeling co-dependent. Now the question all boomers are asking themselves is whether they will be cared for by their own, or will they be assisted by someone outside of the family? Long term care insurance is fast becoming the answer to this particular social dilemma. It protects both the parents and the children of those parents from what may seem undue financial burden.
As people’s views on the family and the economy changes, it behooves X’ers to seriously consider the stark reality of social security and the new possibility that long-term care insurance might provide for an otherwise dismal future… thanks for listening.

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