So, How You Doin'? How Y'all Doin'?

10/07/2011 04:03 pm ET | Updated Dec 07, 2011

There was a time when Americans were able to save a few pennies and do great things with those pennies. They bought homes, went on vacation, sent their kids to college, married off daughters, and, oddly enough, were able to put some of those pennies away for retirement. Unfortunately, those were the people that lived through the Great Depression of the 30s. And, just like the pyramids, we don't seem to know how to do that anymore.

It's no secret that trillions of dollars have been lost in retirement savings in the last few years. Because of the high deficit and the current Congress's refusal to raise taxes or eliminate corporate tax breaks and those to the wealthy, the natural target to shore up the Federal coffers is what's left -- the Boomers' 401k retirement plans. Certain congressional representatives think it would be better to eliminate the $80 billion in annual tax breaks for 401(k)s and force everyone to contribute a percentage of their earnings into a guaranteed retirement account administered by the Social Security Administration. This money would be invested in special government bonds. This has the familiar ring of the individual health insurance mandate, doesn't it?

It's not the American dream we envisioned. Not only have our 401k's atrophied, now we have to pay tax on what's left.

However, a recent AARP survey of workers age 50+ reported that the concern about not having enough money to pay for an extended period of home care or nursing home care outranked the worry of not having a retirement income that keeps up with inflation.

Not having enough money to live on in retirement can happen to the best of planners in two ways:

  1. Major downturn in investments as they approach retirement age with not enough time to recover; and
  2. Needing care for a chronic condition for an extended period of time.

Baby boomers are confronting that second reason head on now as according to a June 2011 MetLife survey, the percentage of adult children providing personal care and/or financial assistance to a parent has more than tripled in the past 15 years and currently represents a quarter of adult children!

These adult kids see the stark reality of being responsible for someone else 24/7 and don't want that oppressive weight on their own kids' shoulders. Thanks to rampant ignorance about this issue, most don't know how to prevent that from happening.

Not that long ago, an ABC special for Alzheimer's hosted by Christiane Amanpour featured guests Maria Shriver and Ann O'Leary (Berkeley Center for Health, Economic, and Family Security). As they were highlighting the immense problems of funding caregivers for Alzheimer's patients, Ms O'Leary estimated "that families were spending $56,000 per year paying out of pocket and we don't have any insurance for this." Christiane Amanpour voiced the opinion that the United States is the only developed country without a national strategy.

Fortunately, Ms. O'Leary was 100% incorrect. There is insurance for this and for other conditions that require long-term care, and it's one of the best kept secrets in America because less than eight million Americans have it.

It's not enough to focus on investments for retirement.

Here's the problem: no matter how much money you have, no matter if you are a doctor, lawyer, actor, or just everyday folk, one event that would require an extended period of time for recovery, can wipe out your funds, or at least make a serious dent in those funds. It would very well mean the end of your lifestyle as you know it and it can happen to anyone at any time. Health insurance and Medicare do not cover this.

Are there ways for Americans to keep from losing their 401k retirement funds? In many cases, the answer is "YES!" Can some people qualify for a tax-free retirement? In most cases, the answer is "YES!"

But the most important thing we do is preserve the LIFESTYLE of American families. Yes, there is a type of insurance that can insure your lifestyle if you have to become a caregiver and the lifestyle of your kids so they aren't saddled with your care.

In many cases, this LIFESTYLE insurance can be free!

Don't leave yourself open to the whim of others. No matter who you are, you have the right to protect yourself from having your life turned upside down.

Sandy Harris is the President of The Harris Group, a national insurance services company, specializing in Long-Term Care insurance retirement planning. Sandy has been helping individuals and employers with these and other insurance services for more than 25 years.

Phyllis Shelton is the President of LTC Consultants, a 20 year old Nashville-based consulting company specializing in long-term care insurance consumer education and agent training. She is the author of The ABC's of Long-Term Care Insurance and her website is