If you’re planning for retirement, you’ve probably heard about long-term care and the need to plan for it. It’s a common need for retirees. In fact, the U.S. Department of Health and Human Services estimates that today’s 65-year-olds have a 70 percent chance of needing long-term care at some point in their lives.1 The average senior will need care for three years.
But what exactly is long-term care? How is it provided? And what kind of health issues cause a need for long-term care? Long-term care is a broad term that applies to a variety of services. It’s difficult to plan for something when you don’t know exactly what it will look like or how much it will cost.
Long-term care is generally defined as extended assistance with basic living activities, like mobility, bathing, eating, household chores and more. It can be provided in the home or in a facility. It’s often caused by cognitive issues like Alzheimer’s but can also be needed as a result of stroke, cancer, heart disease, joint issues and a wide range of other conditions.
You can’t predict what kind of health issues you’ll face in the future, but you can plan for potential costs. Below are three common ways in which long-term care is administered. A financial professional can help you develop a strategy to pay for your future care needs.
For many seniors, long-term care is progressive. It often starts with support for simple tasks like meal preparation, cleaning or running errands. As health issues become more intense, they need more hands-on assistance with things like mobility or bathing.
You may be able to count on a family member or friend for help in the early stages of care. However, family-based care usually doesn’t last forever. At some point, your care needs may progress to a level that is beyond your family’s capability. For instance, you may reach a point where your spouse can no longer transfer you from a bed to a wheelchair. Or you may need round-the-clock support and that may be too much for your family to provide.
While these thoughts aren’t pleasant, they’re a reality for many seniors. According to projections, it’s likely that most seniors will need paid, professional care at some point. Even if your family is able to help, don’t count on that low-cost assistance to meet all your needs.
Even if your needs have progressed beyond what your family can provide, that doesn’t necessarily mean you’ll have to move into a facility. You may be able to stay in your home and get the care you need, especially if you’ve developed a strategy to pay for care.
For example, you could modify your home to accommodate health equipment such as a bed, a wheelchair or even grab bars. You might be able to hire an in-home health aide to provide custodial care and possibly even skilled nursing.
Genworth estimates that a full-time in-home health aide costs an average of $4,195 per month.2 Most long-term care insurance policies cover home care, even if it’s provided by a family member. Many policies also cover home modifications and equipment.
The U.S. Department of Health and Human Services estimates that 35 percent of all seniors spend at least a year in a nursing or assisted living facility at some point.1 You may need skilled nursing as the result of a specific injury or illness. Or you may decide to move into an assisted living facility, so you have full-time support available.
Either way, your facility care is likely to be a costly proposition. Genworth estimates that the average room in an assisted living facility cost $4,000 per month in 2018. A room in a nursing home cost more than $7,000.2
It’s possible that these costs will be covered by Medicare or Medicaid, but that’s not usually the case. Medicare only covers skilled nursing that’s related to a specific hospitalization. Even if you qualify for Medicare, the coverage typically lasts only several months. Medicaid only covers nursing home care if you have few assets and little income. You may want to think about alternatives to Medicare, like long-term care insurance, to pay for your stay in a facility.
Do you have a strategy to pay for long-term care? If not, let’s talk about it. Contact us today at Retirement Peace Project. We can help you develop a plan. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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