What if I need Long-Term Care?

Posted by Creekmur Wealth Advisors on 4:47 PM on November 16, 2020

Health care costs are rising, and even the healthiest among us is likely to need some sort of enhanced health care during our later years.  Have you considered the impact that long-term care costs could have on the later years of your retirement? And how would long-term care for one spouse impact the healthier spouse? As you consider these questions, take a look at the following recent statistics:

Someone turning 65 today has a nearly 70% risk of needing some type of long-term care services in their later years.

The annual cost of a private room in a long-term care facility is around $102,000. At the current rate of inflation this is expected to rise to $184,585 by 2039.2 

60% of care-givers pay for care out of their own savings and 70% of care-givers miss time from work.

The good news is that with advance planning there are options available regarding the type of care you prefer, and an increasing number of options to pay for it. The key is "advance planning" - once you're faced with long-term care needs your options become much fewer. 

When people think about long-term care, nursing homes are typically the first thing that comes to mind. But today a majority of services are provided at home, in adult day health care or assisted-living facilities. 

As you consider your options for paying for care, there are a number of strategies you could consider:

  • Self-Insure: you could pay for your long-term care needs from your own cash reserves.
  • Long-Term Care Insurance: a policy written specifically to cover long-term care.
  • Medicare/Medicare: Government sponsored programs that will pay for some types of care in specific situations.
  • Life-Insurance with Long-Term Care benefits: Many modern insurance policies offer not only a death benefit for your loved ones, but also rider options that allow for the acceleration of the death benefit to help offset these expenses if the need arises.
As you consider this very important part of your financial plan, we would encourage you to weigh your options. Long-term care planning is one of the more complex aspects of financial planning and involves careful consideration as you weigh the pros & cons of each option.What if I need Long-Term Care? Read more here

LongTermCare.gov. U.S. Department of Health and Human Services. “How Much Care Will You Need?”
longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html. Accessed Sept. 18, 2020.

2. Genworth. Genworth Cost of Care Survey 2019. https://www.genworth.com/aging-and-you/finances/cost-of-care.html. Accessed Sept. 21, 2020

3.Genworth. “Beyond Dollars 2018.” https://mma.prnewswire.com/media/784202/Genworth_Beyond_Dollars_Study_2018_Executive_Summary.pdf?p=pdf. Accessed Sept. 21, 2020.

4. Living benefits are available in the form of an accelerated death benefit rider, which may require an additional fee and may not be available on all policies. These benefits are not a replacement for LTC insurance. Life insurance is subject to health underwriting. Accelerated death benefits and LTC riders are subject to eligibility requirements. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurer.

Topics: long-term care

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