Cheng said advisors need to look at every tool in their retirement toolbox.
“One of those is Social Security planning, which involves careful analysis and the timing of cash flows,” she said. “Utilizing home equity can be another tool; sometimes it can make sense for them to refinance to improve cash flow, and it can help their taxes so they don’t have to draw down as much. Another tool is [a] long-term-care solution, which doesn’t necessarily mean long-term-care insurance. The last thing is annuities. Some clients could benefit from annuities because who doesn’t want predictable, sustainable income? But there’s a trade-off between liquidity and access.
“It’s important to explain the pros and cons of each solution,” Cheng added. “I don’t care how old you are or whether you’re male or female, you have to have a plan for planning for long-term care—it doesn’t necessarily have to be insurance.”