Long-term care probably isn’t something you give much thought to. But as one of the biggest threats to your retirement savings, it’s important to understand how needing long-term care could impact your future.
In honor of National Long-Term Care Awareness Month, let’s review eight things you need to consider when it comes to long-term care.
1. Many People Will Need Long-Term Care
It may be difficult to imagine needing help with Activities of Daily Living (eating, bathing, dressing, transferring, toileting and continence), but the reality is 70% of adults aged 65 and older will require long-term care at some point.
2. Long-Term Care is Expensive
Many people don’t realize how expensive long-term care is, which results in them not being prepared for the costs. For example, a private room in a nursing home is around $330 per day or $10,025 per month. The median cost of assisted living is about $181 per day or $5,511 per month. And a typical home health aide costs around $213 per day.
3. Many Families Can’t Care for Their Loved Ones
Families often have good intentions to care for their aging relatives, but it proves to be impossible for many reasons including physical, financial and geographical limitations. It often isn’t safe to assume your family will be able to take care of you, making it important to be prepared to pay for the care you may need someday.
Related: How to Talk to Your Aging Parent About Long-Term Care
4. Medicare Often Won’t Cover Long-Term Care
Many people assume Medicare will pay for their long-term care, but this program is designed to only cover acute care, which is the care you need when you’re sick and will eventually recover from an illness. Medicare doesn’t cover ongoing Activities of Daily Living services when those are the only care you need.
Related: Long-Term Care Insurance vs. Medicare: What’s the Difference?
5. Qualifying for Medicaid Can Be Difficult
Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources. Medicaid may pay for some long-term care, but only if your income and assets meet a minimum amount. This minimum varies by state, but generally falls between only $2,000 to $3,000. Therefore, in order to qualify, you must spend down your assets, including cash, savings, retirement funds and investments.
6. Nursing Homes Aren’t the Only Option
When you hear “long-term care,” you may immediately think “nursing home,” but today there are a wide variety of services available that you may receive at a facility, in the community or in the comfort of your own home. Being prepared for the costs of long-term care can help you receive the care you need on your terms—where and how you want it.
7. Long-Term Care Insurance Can Help You Be Prepared
Long-term care insurance is a form of health insurance specifically designed to pay some of the costs of long-term care services. It can cover your expenses in a variety of settings—from your own home to a nursing facility. Many people choose long-term care insurance because it can offer:
- Independence to remain in your home
- Financial security from the high cost of care
- Best care to meet your health needs
- Peace of mind from not relying on family caregivers
- Freedom to choose where to receive care
8. It’s Important to Secure Long-Term Care Insurance Sooner Than Later
Qualifying for long-term care insurance when you’re elderly or after you’re diagnosed with an illness is very difficult. That’s why many experts agree your 40s, 50s or 60s are an ideal time to secure coverage. Plus, people who are younger and healthier are typically able to lock in lower premiums than those who wait to purchase long-term care insurance.
Want more? Check out our blog, Preserving Wealth and Dignity: Long-Term Care Planning for Seniors.
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