The most expensive part of your retirement may be long-term care. Not everyone plans for it, but it is an emerging need and not having a plan to pay for it can leave you with limited options. According to the U.S. Health and Human Services Department, if you are 65 years or older, you have a 70% chance of needing long-term care (LTC).
Although it is difficult to predict how long you will need LTC, the average time ranges between two and four years. Because this type of care is so expensive, it is never too early to start saving. Preparing early gives you the opportunity to choose what you want before you are unable to make those decisions for yourself.
The average health care cost during retirement is $285,000 per couple, 65 years and older. In addition to that cost, LTC cost ranges from $4,000 to $8,000 per month. This means that if you spend two years in LTC in an assisted living facility (non-private room), you are looking at an approximate $96,000 cost.
How can you protect your assets?
If you or your spouse need long-term care, your home and assets may be at risk. If you plan ahead and can afford LTC, your assets should not be at risk. In addition, if you have money saved and decide to privately pay for your care, you may have more facility and service options.
If you need government assistance to help you pay for LTC, Medicaid may be able to help. You must qualify for Medicaid to receive benefits. Your eligibility is based on your retirement/savings funds, cash and investments. If those total more than $56,700 you may not be eligible.
Other options
Depending on your financial situation, there are payment plans you can use. Here are the most common ways people pay for their care.
- Investments/personal funds
- LTC insurance plans
- Medicaid
- Veterans’ Benefits
Additionally, some services may help you stay in your home. The Older Americans Act aims to help individuals get long-term care in their own homes. This may be the best option if you and your spouse both want to stay in your home together. There may be circumstances where at-home LTC may not be in your best interest. Make sure to seek the long-term care option that is right for you and your loved ones.
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