The important question: Are you prepared?
Addressing the potential threat of long-term care expenses may be one of the biggest financial challenges for individuals who are developing a retirement strategy.
The U.S. Department of Health and Human Services estimates that 69% of people over age 65 can expect to need extended care services at some point in their lives. So understanding the various types of long-term care services and what those services may cost is critical as you consider your retirement approach. (1)
What Is Long-Term Care?
Long-term care is not a single activity. It refers to a variety of medical and non-medical services needed by those who have a chronic illness or disability. Most often those needs are commonly associated with aging.
For example, long-term care can include:
- assistance with activities of daily living
- help dressing, bathing, using the bathroom, or even driving to the store
- more intensive therapeutic and medical care requiring the services of skilled medical personnel.
Long-term care may be provided at home, a community center, in an assisted living facility, or in a skilled nursing home. And long-term care is not exclusively for the elderly. It is possible to need long-term care at any age.
How Much Does Long-Term Care Cost? Long-term care expenses vary state by state and region by region.
The national average for care in a skilled care facility (semi-private in a nursing home) is $85,775 a year. The national average for care in an assisted living center is $45,000 a year. Home health aides cost a median $18,200 per year. And that rate may increase when a licensed nurse is required.
Individuals who would rather not burden their family and friends have two main options for covering the cost of long-term care. They can choose to self-insure or they can purchase long- term care insurance.
Many self-insure by default, because they haven’t made other arrangements. As a result, those who self-insure may depend on personal savings and investments to fund any long-term care needs. The other approach is to consider purchasing long-term care insurance, which can cover all levels of care. It can include skilled care, custodial care or in-home assistance.
When it comes to addressing long-term care needs, many look for a strategy to help them protect assets, preserve dignity, and maintain independence. So if those concepts are important to you, consider your approach for long-term care in planning for your future.
(1) – fool.com/retirement/2018/09/02/5-long-term-care-stats-that-will-blow-you-away.aspx
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