Data & Research November 13, 2018

Planning for Long-Term Care Needed to Alleviate Burdens on Family Members

Among family caregivers, 60% said they had no idea how demanding it would be, and that an insurance product to help with long-term care could have alleviated some of this pressure, according to Lincoln Financial Group.

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A new Lincoln Financial Group study released during Long-Term Care Awareness Month finds that nearly 75% of Americans believe they will be responsible for caregiving of a family member, but 70% fear they will not be able to provide adequate care. Women surveyed were significantly more likely than men to believe that caregiving responsibilities will fall on them, and 65% of those surveyed said parents expect more help with long-term care from their daughters than from their sons.

More than half of people turning 65 are expected to need some form of long-term care, typically beginning in the home with family caregivers. Among those who are providing care, 60% said they had no idea how demanding it would be, and that an insurance product to help with long-term care could have alleviated some of this pressure.

“A long-term care event is a difficult time for a family, including the person in need of care, as well as the children or spouse making decisions and often providing the care,” says Karen DeRose, president and managing partner of DeRose Financial Planning Group, a registered representative of Lincoln Financial Advisors. “Planning before care is needed is the best way to ease those stresses. Think about the type of care you’d want, and discuss your preferences with your family and adviser. Then, together, you can determine strategies on how to make those preferences a reality if the need arises.”

More than half of respondents said they would hire professional services to relieve the burden on their children or spouse.

“In those instances where family members have to provide long-term care for a loved one, women are often expected to step in and assume responsibility for caregiving,” DeRose says. “Think about how all family members can contribute to caring for a loved one, and the role professional services may play.”

When it comes to hiring professional help, survey respondents said being able to receive care in the home and more experienced care are the two top advantages. To help with this issue, Lincoln has created a What Care Costs website where people can see what long-term care costs in their area. Enter code “Lincoln” in the upper right hand corner.

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Data & Research November 13, 2018

Study Suggests Multiple Provider Model Best for K-12 403(b) Plan Participants

The research found 25% greater participation in plans with 15 or more investment providers compared to plans with only one provider, and account balances are, on average, 73% higher among plans with 15 or more providers compared to single provider arrangements.

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A decrease in investment choice and reduced access to advisers leads to lower retirement plan participation by employees in public education 403(b) plans, according to research published by the National Tax-Deferred Savings Association (NTSA).

K-12 403(b) plans often have individual annuity contracts, thousands of investment options and hundreds of providers in which individual participants have directed their deferrals and savings into providers they picked, often after a representative visited the workplace. Some feel that this model—and having these advisers sit down with participants individually—is an advantage for participants. Still others believe K-12 school systems should pare down to one or a few providers to simplify plan administration and compliance with IRS regulations and to offer participants better, lower-cost investment options and less confusion.

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The research, based on data from nearly 4,500 school districts across the United States, found 25% greater participation in plans with 15 or more investment providers compared to plans with only one provider, and single provider arrangements have the lowest participation rate; 8% below the national average. In addition, according to the research, account balances are, on average, 73% higher among plans with 15 or more providers compared to single provider arrangements, and there is a 203% increase in average contribution rates among plans providing access to 15 or more providers compared to plans with only one provider.

“The research revealed that the number one factor driving participation and savings rates in school districts is participant choice,” says Jason J. Fichtner, Ph.D., a Senior Lecturer of International Economics at Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies and author of “Improving Retirement Savings for America’s Public Educators,” a white paper detailing the research results.

Overall, the research finds that public employees who have access to retirement educational resources at the workplace and the assistance of financial professionals are saving earlier and contributing more to their 403(b) plans, and have greater confidence in being able to achieve their retirement goals.

“The range of participation rates in America’s public school districts is dramatic, suggesting that the choices that each school district makes available to employees and the resources that they provide to help employees understand the benefits of participation are key differences in driving participation rates,” says Brent Neese, executive director of NTSA.

There’s been a tug of war, of sorts, over the best design for K-12 school district 403(b) plans, but some say they should strike a balance between old and new.

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