America is facing a growing health crisis, one largely driven by our own daily habits. Surprisingly, it’s not about smoking, drinking, or even unhealthy eating. Instead, a significant contributor is something that happens at the workplace, and while you’re reading this, you might be doing it yourself—albeit passively. To cut to the chase, the issue is our sedentary lifestyles. Long periods of sitting are taking a toll on our health, leading to a greater need for healthcare later in life.
How Sitting Harms Your Health
CPAs, like many professionals in desk-bound occupations, are at an elevated risk of developing serious health issues due to prolonged periods of sitting. The sedentary nature of accounting work, coupled with long hours, can contribute to a range of health problems, such as poor circulation and heightened blood pressure, leading to a greater incidence of cardiovascular diseases.
The research is clear: people who predominantly sit at work have a 34% higher risk of mortality from cardiovascular disease and a 16% higher risk of mortality from all causes, along with higher instances of chronic conditions such as obesity, diabetes, and musculoskeletal problems.¹ In fact, physical inactivity is so detrimental that it contributes to one in ten premature deaths in the United States, costing the healthcare system billions annually.² Excessive sitting even causes internal damage, and the damage is likely irreversible.³
Additionally, 70% of adults who survive to age 65 develop severe long-term services and supports (LTSS) needs before they die, and 48% receive some form of paid care over their lifetime, meaning they need to self-finance services like home care, assisted living, or nursing home care.⁴ This means you need to be prepared for the likely high amount of medical care you’ll need in retirement – and it won’t be cheap.
How Long-Term Care (LTC) Insurance Can Help
Since Medicare and traditional health insurance generally do not cover most long-term care expenses, people should plan for these costs without dipping into their savings. One potential solution is long-term care insurance.
Unlike traditional health insurance, long-term care insurance is specifically designed to cover extended services and support, including personal and custodial care, in a variety of locations, such as your home or a specialized facility. Upon activation, they reimburse policyholders up to a daily limit (which you select when purchasing the policy) for services that help with activities of daily living, such as bathing, dressing, or eating.
The cost of a long-term care policy depends on several factors:
- Your age at the time of purchase
- The maximum daily benefit the policy will pay
- The maximum duration (in days or years) that the policy will cover
- The lifetime maximum, calculated as the daily benefit multiplied by the number of covered days
- Optional benefits you select, such as inflation protection
However, according to Forbes, long-term care insurance, which can be used to cover nursing home care, costs an average of $100 per month for a 60-year-old man for $165,000 in coverage, $163 per month for a 60-year-old woman, and $213 per month for a couple with joint coverage.⁵ Again, these are just averages, and your premium will reflect your age, health status, marriage status, location, and selected benefits, among other factors.
Premium Deductions
Long-term care insurance goes beyond just reimbursing your expenses. You can also deduct the premiums from your taxable income, helping to reduce the overall burden of healthcare and long-term insurance costs.
| Attained Age Before Close of Taxable Year | 2024 Limit | 2023 Limit |
|---|---|---|
| 40 or less | $470 | $480 |
| More than 40 but not more than 50 | $880 | $890 |
| More than 50 but not more than 60 | $1,760 | $1,790 |
| More than 60 but not more than 70 | $4,710 | $4,770 |
| More than 70 | $5,880 | $5,960 |
Source: https://www.aaltci.org/news/long-term-care-insurance-association-news/2024-tax-deductible-limits-for-long-term-care-insurance
Kinds of Long-Term Care Insurance
Traditional
Traditional long-term care insurance is a straightforward, standalone policy covering only the expenses of long-term care services and support. A traditional policy allows you to choose how much coverage you think you’ll need, how long you want it to last, and the length of your waiting period before coverage kicks in.
Hybrid
Hybrid long-term care policies combine the coverage for long-term care expenses with wider life insurance benefits. They’re sometimes called linked benefit policies. In addition to covering your long-term care expenses, a hybrid policy also accrues a cash value. You can use that value to pay for long-term care expenses, but if you don’t need or use all of it, you can pass a death benefit along to your beneficiaries.
Long-Term Care Riders
An insurance rider amends your policy to better suit your needs. In this case, a long-term care rider revises your existing permanent life insurance policy so you can use a percentage of your death benefit to pay for long-term care.
Adding a long-term care insurance rider usually increases the price of your premium. The percentage and amount you can access will vary depending on the policy and provider you choose.
Pros of LTC Insurance
– LTC insurance helps cover the high costs of long-term care, reducing the risk of depleting your retirement savings – one of the major retirement risks.
– LTC insurance will provide high peace of mind. Knowing that future care needs are financially covered can alleviate stress for you and your family.
– It can help prevent the financial and emotional strain on loved ones who might otherwise have to provide care or manage expenses.
Cons of LTC Insurance
– LTC insurance can be expensive, especially if purchased later in life or if you choose comprehensive coverage with inflation protection.
– Some policies may have premium increases over time, making them less affordable as you age.
– There’s always the risk that you may never need long-term care and will feel that you wasted that money. But that’s the risk of every kind of insurance policy.
– If you have existing health issues, you may be denied coverage or charged higher premiums.
In Conclusion
Never in history have more people spent so much time sitting at work; and it’s not just while working, it’s also the drive to work, relaxing at home, and even flying. We constantly find ourselves sitting with few alternatives. Previously, we weren’t aware of the damage sitting does to our bodies, but now the evidence is clear and compelling – and it significantly affects your retirement readiness.
With the rising costs of long-term care and the limited coverage provided by Medicare and traditional health insurance, it’s crucial to consider how you’ll cover these potential expenses. If you’d like to craft a strategy to pay for your retirement healthcare costs, the CPA Retirement Solutions team is standing by, ready to help! Just click the button below.
Sources
- https://www.palmbeachpost.com/story/news/healthcare/2024/02/27/excessive-sitting-can-shorten-your-life-cause-internal-damage/72613742007/
- https://archive.cdc.gov/www_cdc_gov/media/releases/2020/0116-americas-inactivity.html
- https://www.palmbeachpost.com/story/news/healthcare/2024/02/27/excessive-sitting-can-shorten-your-life-cause-internal-damage/72613742007/
- https://aspe.hhs.gov/reports/what-lifetime-risk-needing-receiving-long-term-services-supports-0
- https://www.forbes.com/advisor/life-insurance/long-term-care-insurance-cost/
