In today’s post I wanted us to discuss how to tackle long term care costs. This is really critical for those in their senior years and their children.
If you are a baby boomer you probably know firsthand about the costs of long term care from helping your parents or friends.
And here is what you’ve found out: it’s confusing; it’s expensive and it’s emotionally exhausting. You struggle through; you figure it out because there aren’t many options.
So, here is the really big question that can change your financial future and save your children the stress you are going through…
What have you done about long term care planning for yourself?
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Here are the facts about long term care costs:
- More than two-thirds of people over age 65 will need some level of long-term care as they age.
- Your nest egg will be at risk to pay for long term care expenses. Medicare does not cover long term care. Medicaid long term care services are only available to low income seniors.
- Long term care is expensive. A new report from Northwestern Mutual says the average cost of hourly home health aides is between $20.65 – $23.98; assisted living facility private room costs an average of $3,3372 per month; and, nursing homes cost an average of $246 per day or $89,812 per year.
So, the first thing you need to do is a plan for long term care. Who will provide care, what kind of resources do you have available, do you have family close by who are able to help, and how do you feel about asking your children to care for you? It should be part of your retirement plan.
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One option to consider is long term care insurance. It covers the costs of care when you can’t take care of yourself. This is not health insurance. It pays for help with activities of everyday living – getting dressed, preparing meals, moving around – referred to as custodial care. It is flexible and pays for care at home, in a nursing facility or assisted living community.
Here are four tips to consider when shopping for long term care insurance:
- If you plan to move in retirement, buy coverage for where you will be living. Costs vary widely depending on the part of the country. Don’t overbuy. Select a coverage amount for where you will reside.
- When you need long term care your regular expenses will change. You’ll be able to shift some funds to cover long term care on your own, so may be able to share costs with the insurance company. A $100 a day policy can make a big difference to those who are helping care for you!
- Buy long term care insurance when you are younger and healthy. Most people buy in their 50s when the premiums are less.
- Compare plans and prices from 2 to 3 companies. Costs can vary significantly. Ask about the financial stability of the company and its reputation for paying claims. Buy from someone experienced in long term care insurance.
Facing long term care costs now, and can save your family emotional and financial stress and strain in the years ahead.
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