4 Things You Must Know About Long-Term Care
When it comes to retirement planning, most people do their best to avoid one very specific, emotionally-charged topic: long-term care. For some, having this kind of talk feels like preparing for the end of life — when they want to be planning for Life 2.0. But setting aside time to discuss what will happen when you or a loved one can no longer be self-sufficient is crucial to protecting a retirement nest egg.
What is long-term care?
Long-term care is the assistance given to someone who can no longer consistently care for themselves. It may include help with daily activities, such as getting out of bed, dressing, bathing, or eating, as well as socializing and recreational activities. The services provided are usually related to physical or cognitive conditions that prevent the person from living safely on their own.
While care can be provided at a licensed facility such as a nursing home, assisted living facility, or adult day care center, home health aides and nurses can also provide many services in your home. Even though it seems like it's only for long-term needs, care can span a short or long period of time.
Here are four things you must know about long-term care.
1. The likelihood of needing long-term care increases as you age.
According to the U.S. Department of Health & Human Services, 70% of adults who live to age 65 will need long-term care at some point. Even if you haven't reached retirement age, you may benefit from a long-term care insurance plan. Disabling injuries and chronic illnesses can affect anyone, at any age.
2. Regular health insurance does not cover most long-term care services.
A quick review of your employer-sponsored health insurance plan will likely confirm that it doesn't cover long-term care. However, some employers do offer other long-term care or disability insurance plans to employees, so don't be afraid to ask about them. NOTE: Before retirement, long-term disability insurance may help replace a portion of your income but it is not intended to provide the same level of coverage as long-term care insurance.
3. Medicare does not pay for most long-term care services.
While you may be eligible for Medicare benefits, you can't depend on them to cover all of your long-term care needs. Medicare does cover some of the costs associated with nursing home care, but it does not cover extended stays in a nursing home. Such assistance could require you to tap into your savings, investments, or other income to pay those expenses. With the average stay in a nursing home facility costing close to $9,000 a month, an absence of long-term care insurance can be financially devastating.
4. Medicaid may pay for some long-term care — if you qualify.
You may be eligible for long-term care services under Medicaid if your income falls below a certain threshold or the ratio is high enough between your medical bills and your income and assets. Even if you do qualify, not all nursing homes accept Medicaid patients. We recommend that you seek an elder care law attorney's advice before applying for Medicaid state assistance.
Should you buy long term care insurance?
The answer depends on several factors, with income and life expectancy topping the list. If you can afford to self-insure for long-term care, forgoing coverage may be the best option for your situation. Your age, health status, and family history influence how long you can expect to live.
With the average life expectancy for Americans to be around 78 years, determine whether your retirement income can support the care you may someday need, while letting you live the lifestyle you had planned.
Long-term care insurance provides financial protection and offers peace of mind in a world full of uncertainties.
Schedule a free phone consultation or call our Together Investment and Retirement Services team at (800) 325-9905 ext. 58671 to learn more about how Long Term Care Insurance can give you the peace of mind of knowing you'll have the funds available should you or a loved one need care or assistance.
