Here is a guest article from June Duncan:
Planning and Paying for Long-Term Care
People are living longer than ever, with medical advances staving off disease-based fatalities and increased screening technologies helping identify illnesses sooner. Worldwide, there are close to one billion people over the age of 60. This number is poised to continue its growth, but although we are living longer, we are not necessarily living healthier lives.
Diabetes and heart disease are still ravaging older adults. While fewer people may be dying from these diseases, the future may mean a longer life with much more medical intervention. Because of these trends, long-term care is increasingly becoming a potential reality for many people. Long-term care is a broad category of assistance that a person needs for diseases and conditions that aren’t likely to be resolved. This type of care can include assistance with daily tasks, such as bathing, and moving about to feeding and administering medicine.
Planning for Long-Term Care Needs
As the potential need for long-term care increases across the population, it is crucial to take steps to identify if long-term care is in your future and plan accordingly. According to some reports, about 70 percent of the population is going to need long-term care. For some, the risk of needing this care can be reduced through health-focused actions.
Identifying your risk
The first step in reducing the risk of needing care is to assess your lifestyle and your health. Many of the so-called “lifestyle diseases,” such as cardiovascular disease, diabetes, and certain cancers, are the result of poor health habits. Smoking, overeating and sedentary living increase your risk of having poor health in your older years. While some of these conditions can be managed with pharmaceuticals, the resulting medicated lifestyle is one that often needs outside support.
To some extent, you may be able to reduce your risk through pursuing natural longevity through better nutrition, abstaining from harmful activities, and enjoying regular exercise. You can reduce your risk for developing Alzheimer’s, for example, by keeping your mind active well into adulthood. Challenge yourself to learn a new language, play brain games and puzzles, and read as a hobby.
Paying for Long-Term Care
Some people may need care regardless of how much they try to fight its need. As people’s lifespans continue to grow, there may eventually be a universal need for long-term care, as the human body can become frail with advanced age. Because it may be inevitable and its early need is not entirely controllable, it is wise to include long-term care in your financial and retirement planning. There are a few options for planning, including saving and buying long-term care insurance.
The cost of long-term care
Long-term care can be expensive. Depending on the level of care you need, it can mean that you are hiring a full-time, 24/7 caretaker. While a home health aid will cost around $20 an hour in today’s dollars, nursing home expenses can easily reach $8,000 to $10,000. You cannot sit back and count on needing only a minimal amount of care. Increased longevity can make a nursing home stay last several years, which can drain even the most robust bank accounts.
How to pay for long-term care
Long-term care insurance is an option to mitigate the risk of these expenses, as is a variety of combination products that blend insurance with cash-value benefits and annuities. In general, long-term care insurance premiums increase as you age, and some policies cap the payout amount and duration, such as $100 a day for three years.
Another source of paying for future care is Medicaid, which according to many financial planners, is an increasingly-used source. This government funding for senior medical care only kicks in after you’ve spent all of your assets, so it is the program of last resort for seniors who live lives that outpace their savings.
When determining how to maximize savings, selling your home and downsizing may be a way to repurpose your assets for eventual long-term care needs so that you can privately fund as much of your need as possible. When you are paying out of pocket, you will have more options over where you choose to live. It’s often easier to sell your home before your urgent need arises.
You are never too young or too healthy to begin considering how you will live your senior years. Planning today can put you in better financial shape in the event you need long-term care.
June is the primary caregiver to her 85-year-old mom and the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is passionate about helping and supporting other caregivers and is currently writing a book titled, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers, due out in Winter 2018.
Photo Credit: Pixabay
