According to the U.S. Department of Health and Human Services, today’s 65-year-olds have a 70 percent chance of needing long-term care at some point in their lives.1 Long-term care is extended assistance with basic daily living activities such as bathing, eating, dressing, mobility and more.
Long-term care is usually provided either in a facility or in the home. As you might expect, this kind of care can be expensive. A recent Genworth study found that the average monthly cost of an extended living facility was $3,750. A full-time home health aide cost more than $4,000 per month.2
Many seniors need long-term care for several months or even years. The cost can add up over time and quickly deplete your retirement assets. Fortunately, there are tools you can use to cover the cost.
One popular strategy is to use long-term care insurance. You pay premiums today, and the insurer pays for some or all of your long-term care costs in the future. Many long-term care policies cover care provided in either a home or a facility.
Is long-term care insurance the right strategy for you? There’s no correct answer for everyone. It depends on your budget, needs and goals. Below are a few questions to ask yourself as you consider your long-term care options:
Are you healthy?
At first glance, it may seem that the healthier you are, the less likely you are to need care. However, the opposite could be true. Your good health may reflect an increased likelihood for future care.
Those who are unhealthy as they approach or enter retirement may risk passing away before they need long-term care. For example, they may suffer from heart ailments, cancer or other life-threatening conditions.
However, those who are healthy may live well into their 80s or even 90s. If you reach those ages in retirement, you may rely on others for things like mobility or meal preparation. You may find it necessary to hire a part-time aide or even move into an independent living facility. Don’t assume that your good health today means you won’t need care in the future.
Do you want to stay in your home?
Many people assume that long-term care insurance is essentially “nursing home insurance.” They avoid the coverage because they have no desire to move into a facility. However, many of today’s policies cover care that’s provided either in the home or in a facility. You can use your coverage to hire an in-home aide, reimburse family members for their assistance or even remodel your home to accommodate a wheelchair or other equipment.
If you’re like many retirees, you have a desire to stay in your own home, even if you need some assistance to do so. Long-term care insurance can help you do just that. Without coverage, you may be forced to use Medicaid to pay for care, and Medicaid usually doesn’t cover in-home assistance.
Do you have a backup funding plan?
Perhaps the most important question is what your alternative plan is. If you don’t have long-term care insurance, you’ll need some other strategy. You may be able to self-fund out of your own assets. That can get costly, however, especially if you’re married and both you and your spouse eventually need care.
You may also assume that you can count on family members for support. However, long-term care is often a full-time responsibility. Consider whether your kids or other relatives have the time or ability to provide the level of care you may need.
Finally, you may plan on using Medicare and Medicaid to pay for your care. Unfortunately, Medicare usually doesn’t offer funding for long-term care. Medicaid will cover care, but only in a facility and only after you have first depleted your own assets. Also, you may find that your options under Medicaid don’t meet your own expectations.
Ready to develop your long-term care strategy? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and create 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.
17509 - 2018/3/26
Carstens Financial Group focuses on providing comprehensive asset management, estate planning and life insurance solutions. Allow us to help you secure your financial future.