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“Longevity risk” is one of the newer financial buzz words. It’s a fancy way of saying we could live too long and run out of money.

There are many things we can do to minimize the risk of this occurring but the adjustments are all to “money side” of the equation rather than to the “longevity side.” Life expectancy is one thing we don’t have much control over. Actuaries predict your lifespan with some accuracy leaving us concerned with the quality of life.

Like a growing number of us, I’ve had first hand experience with “longevity risk” while placing my mom in a long-term care facility. It wasn’t pleasant. We were working with limited resources and she was relatively young. My first thought was to have her move in with me. Close friends were brutally honest and gently pointed out to me that this wasn’t the solution. Mom needed around-the-clock care and couldn’t be left alone. Returning to reality I understood that there was no way I could take care of her, earn a living and maintain my sanity. Best laid plans of mice and men, so the saying goes.

Not wanting to put my own family in the same situation when I get older, I purchased long-term care insurance at what some may say is a young age. I chose to do this because I’m insurable at this stage of the game and may not always be. A frequent concern that I hear from clients is that they do not want to be a burden on their children, yet they are also equally concerned about not ending up in a nursing home.

We can expect to live longer than any generation before us. Federal and State Governments seemingly understand this and how the effects of an aging American population will impact the economy. The Deficit Reduction Act of 2005 enabled states as of January 1, 2007 to offer home and community based services as an optional benefit based on people’s functional needs versus an individual’s needs for institutional care.

The DRA also gave $1.75 Billion to fund a program to transition residents from nursing homes back into the community, if they so desire. In addition, the government has called for Aging and Disability Resource Centers in each state to be the main go-to long-term care resource. The message here appears to be that Government would rather keep people out of nursing homes and allow us to remain at home and have self-directed care.

Watch out world, here come the baby-boomers! We will grow to be elderly, frail and in need of assistance as we age and if we are to be responsible for our own well-being it behooves us to plan for this. We spend a large part of our life educating ourselves for our chosen careers, spend even more time working at those careers and saving for the retirement years. The planning and management of these accumulated assets is critical. So is the protection and preservation of those funds.

If we’re not able to meet our own needs then there may be an unspoken responsibility that trickles down to the children. My girls know that when I’m unable to care for myself all I’ll ask for is raspberry Jell-O with Cool Whip and a really fast motorized wheelchair.

I may be doing everything right to ensure that I have the perfect retirement plan, but there’s always the chance that something could happen and blow our plans right out of the water. We’ve encouraged our children to prudently plan for their futures, but if they had to quit work to care for us, the financial impact on their savings could be catastrophic. What’s a family to do?

Some families are coming together during their financial family meetings and openly discussing these issues. Everyone’s comfort levels are different when it comes do these sort of discussions, but at the very least, one person who is close to you should know just about everything on how you would like to be cared for. Children can join together and chip in to purchase a long-term care policy for their parents. As someone with parents who are alive and who may possibly need care in the future it may be appropriate to consider this as a possibility. Keep in mind long term care insurance policies and companies are different. A complete analysis of your objectives and needs is necessary to recommend a particular solution. My job is to point out your exposure to risks that may rob you of your last levels of security; good health, assets, income and independence.

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Darcie Guerin is a financial adviser and branch manager at Raymond James & Associates Inc. at 606 Bald Eagle Drive, suite 401, Marco Island. Contact her at Darcie.Guerin@raymondjames.com, 389-1041 or toll-free (866) 343-0882.