By Bill Reiner, CFP®, ChFC®

There are certain things you don’t want to gamble with in life: your retirement savings, how you raise your kids, or your health. But if you’ve neglected to put a long-term care plan in place, you’re taking a giant risk. You might be saying to yourself, “Do I really need long-term care insurance? The hefty premiums just don’t seem worth it.” For some, the thought of sky-high bills and burdened family members is enough to motivate them to invest in some sort of long-term care insurance. Regardless of which camp you’re in, here are 5 surprising things you should know about long-term care (and the impact it could have on your nest egg later in life).

1. Most Of Us Will Need Long-Term Care At Some Point

More than half of people turning 65 today will need long-term care in their remaining years. While the average person will require help for one to three years, (1) it is estimated that 14% will need care for 5+ years. Regardless of present health or circumstance, eventually most people will need some form of long-term care during their lifetime.

2. Medicare Typically Doesn’t Pay For Long-Term Care

It may shock you to know that Medicare doesn’t cover typical long-term care expenses. Medicare is medical insurance. It covers acute care expenses like doctors’ visits, prescription drugs, hospital stays, and short stays in a skilled nursing facility in special circumstances. Medicare will not cover basic long-term care needs or facility costs. Basics such as assistance with daily personal care needs like bathing, feeding, getting dressed, and supervising (2) are not covered by Medicare.   

3. It’s Challenging To Pay For Rising Long-Term Care Expenses Without Insurance

Long-term care costs are expensive. The average national monthly cost for an in-home health aide is $4,385, assisted living facilities cost $4,051 a month on average, while a private room in a skilled care facility will cost you around $8,517. (3) With costs this high, it’s no wonder that long-term care expenses often result in financial plan failures, even for those with resources. Over 32% of households with a $1 million net worth (4) were materially impacted by long-term care costs.

4. Long-Term Care Insurance Covers More Than You Think

Many people think long-term care insurance is only for traditional nursing homes or skilled care facilities. Most policies today cover much more. Home health aides, assisted living facilities, and retirement communities are often covered with today’s long-term care plans. Some plans include coverage for professional help should you need assistance with eating, showering, getting dressed, and using the bathroom.

5. Women Need Long-Term Care Insurance More Than Men

Women can expect to have higher long-term care costs than men simply because they tend to live longer. When a husband is sick, for example, the wife often steps up to care for him until his passing. When the wife finds herself in the same situation years later, she typically doesn’t have a spouse to offer the same care. As a result, this burden falls on children or extended family members. Long-term care insurance can provide the resources needed to prevent being a burden and allow you to choose how, when, and where you receive care.

We Can Help You

No matter what your health looks like today, statistics show that most people will need some form of long-term care during their lifetimes. And that means it is critical to have a plan to cover these potentially significant costs. This can seem daunting, especially when coupled with the need for an adequate retirement income. 

We at Reiner Financial Group, LLC want to help relieve some of your worries. We specialize in  retirement income strategies and reducing the chance that a long-term care stay will derail your plan. If you’re one of my existing clients, we can always meet to obtain an update on your circumstances and see if any adjustments should be made. You can reach me at (215) 340-2360 or bill@reinerfinancial.com

About Bill Reiner, CFP®, ChFC®, Financial Advisor

Bill has been in the financial industry since 1995, earning numerous professional designations, including the Certified Financial PlannerTM Certification in 1999. Clients work with Bill because of his honesty and unwavering devotion to superior client service. He helps clients discover what financial strategies work best in helping them achieve their goals and objectives. When taking on new clients, he works diligently to gain their trust and help them understand the solutions he recommends.

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(1) https://www.aarp.org/content/dam/aarp/ppi/2017-01/Fact%20Sheet%20Long-Term%20Support%20and%20Services.pdf

(2) https://longtermcare.acl.gov/medicare-medicaid-more/medicare.html

(3) https://www.genworth.com/aging-and-you/finances/cost-of-care.html

(4) https://www.businessinsider.com/10-things-to-know-about-long-term-care-2016-9