What's the greatest risk in your financial plan? We've seen how a stock market crash can devastate retirement plans. But the greatest risk is not the longevity of this bear market, or even another bear market. It's the devastating cost of long-term care (LTC). And just as many preretirees didn't take the possibility of declining stock prices into consideration when making their retirement plans, most people don't consider the costs of living longer and the health-care and lifestyle implications.

Living longer may bring with it challenges that we cannot handle on our own. We may need help with routine activities of daily living, our health may become impaired because of progressive diseases, or our cognitive ability may be limited by Alzheimer's disease or dementia. And as the boomers age, the demand for care will put a strain on the resources to deal with these issues—and on the price tag.

We baby boomers will eventually face these problems for ourselves, but right now many of us are confronting them for our parents. Do your parents and in-laws have enough money to pay for their own care for years to come, or will you be asked to supplement their long-term care needs just when your own children are in college and you are trying to save for your own retirement? I confronted this issue early, when it became my responsibility to arrange and pay for my grandmother's care. That's when I recognized the importance of long-term care insurance. ...

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