Long-term care costs will not pay for themselves.
Each year you are older.
As you age, so does your body.
And so does your mind.
Any aging body and mind means you will eventually need long-term care.
According to a recent The Detroit News article titled “What to know about aging and long-term care costs,” the cost of long-term care can be steep.
The median annual cost of a private room in a nursing home is more than $100,000 per year.
Home health aid for a year averages $50,000.
Of the more than 50 percent of Americans who will require long-term care, nearly 15 percent will require more than $250,000 in costs.
How can this be?
On average men will require 2.2 years of assistance, while women will require 3.7 years.
You can see how these add up.
Can you simply rely on family to provide care?
It is not a guarantee, and caregiving can prove costly for the caregiver.
Will Medicare cover these costs?
Custodial care is not covered under Medicare.
Most Americans have a median of $126,000 in retirement savings.
This will be wiped out quickly by long-term care needs.
If you qualify for Medicaid, you may be leaving your surviving spouse in a dire financial situation.
What other options do you have?
Long-term care insurance.
If you are in fair health, long-term care insurance is a great option.
If you wait until you are older to get this, the premiums will increase.
What you pay and whether you qualify depends on your health.
On average couples at age 55 paid $3,050 on their policies in 2019.
Hybrid long-term care insurance.
What are these hybrids?
Typically they involve a life insurance policy or annuity with a long-term care benefits rider.
You may pay a significant sum of money upon purchase, but it will serve a similar function to long-term care insurance.
Selling your home should not be the first option.
In some cases, it is unavoidable when paying for nursing home care.
What if you want to remain in the home?
A reverse mortgage could be an option.
If you are a wealthy family, you may be able to simply save and set aside money specifically for long-term care costs.
For those with few assets and negligible or nonexistent retirement savings, Medicaid may be your best or only option.
This will require you to spend down until you are meet financial eligibility requirements.
If your spouse still needs to survive off what you have, there may be a way to make this happen.
It will require forethought and working with an experienced elder law attorney.
Long-term care costs are daunting.
Planning ahead for this expense will bring peace of mind when the time comes for this type of care.
Reference: The Detroit News (June 10, 2019) “What to know about aging and long-term care costs”