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 others, the thought of sky-high bills and burdened family members is enough for them to consider 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 for help for one to three years[1], it is estimated that 14% will need care for 5+ years. Regardless of our health or circumstance today, eventually most of us will need some form of long-term care in our lifetime.
2. Medicare Typically Doesn’t Pay For Long-Term Care
It may shock you to know that Medicare does not 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. Such basics as assistance with daily personal care needs such as 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 aid 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 for traditional nursing home or skilled care facilities. Most policies today cover much more. Home health aides, assisted living facilities, 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®
Bill has been in the financial industry since 1995, earning numerous professional designations, including the Certified Financial PlannerTM Certification in 1999. Bill is committed to honesty and unwavering devotion to superior client service. He helps clients discover what financial strategies work best in helping them work toward their goals and objectives. When taking on new clients, he works diligently to gain their trust and help them understand the strategies he recommends.
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA / SIPC. Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice. Investors should be aware that there are risks inherent in all investments, such as fluctuations in investment principle. With any investment vehicle, past performance is not a guarantee of future results. Diversification and asset allocation strategies do not assure profit or protect against loss.
[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