Long-term care planning is an essential part of retirement planning. It helps you plan for future health needs and expenses.
You should start thinking about long-term care planning now because it’s never too early to start saving for it.
If you’re interested in learning more about long-term care insurance, read this article.
What Is Long-Term Care Insurance?
An LTC policy provides a monthly benefit that covers the cost of a nursing home or assisted living facility stays as well as other services such as physical therapy, speech therapy, occupational therapy, etc. if needed. The benefits are usually paid directly by your insurer rather than through Medicaid or Medicare. You can also purchase supplemental coverage from private insurers.
The amount of money available depends on several factors including how old you are when you buy the policy, what type of policy you choose, whether you have any pre-existing conditions, and where you live. For example, policies sold in California may be less expensive than those offered elsewhere.
How Does This Affect My Retirement Plans?
LTC plans help protect against outliving one’s savings. If you don’t set aside enough funds during your working years, there won’t be anything left at age 65 to pay for your healthcare costs.
LTC plans help protect against overspending. When you need assistance with daily activities like bathing, dressing, eating, walking, toileting, housekeeping, medication management, transportation, laundry, grocery shopping, meal preparation, and light household chores, you’ll want someone who will take good care of you. That means hiring caregivers who provide these types of services. These costs add up quickly.
LTC plans allow you to make decisions based on facts instead of emotions. Your family members might not agree with your decision to move into a skilled nursing facility or assisted living center. They might even try to convince you to stay in their own homes. But they probably wouldn’t argue with the fact that moving into an SNF would mean paying thousands of dollars each month. LTC allows you to focus on enjoying life while still being able to afford quality medical treatment. Instead of worrying about finances, you can spend time doing things you enjoy.
Why Should I Consider Buying An LTC Policy?
There are many reasons why people consider buying an LTC policy. Some of them include:
• To cover potential high costs associated with aging.
• To ensure access to affordable healthcare options.
• To avoid having to rely on government programs.
• To reduce stress related to financial concerns.
• To leave something behind for children.
• To create peace of mind.
• To prepare for possible emergencies.
• To improve the overall quality of life.
Who Needs LTC Coverage?
Anyone who has reached certain milestones in his/her lifetime could potentially require some form of long-term care. Here are just a few examples:
• A person turning 70 must begin making regular contributions toward Social Security payments.
• Someone reaching 85 becomes eligible for full Medicare coverage.
• Anyone receiving Supplemental Security Income benefits must meet income requirements before he/she qualifies for SSI benefits.
• People who reach 100 become eligible for Medicaid.
• Those who turn 18 qualify for free public education through college.
• The average cost of homeownership increases dramatically after 50.
• Many employers offer retiree medical benefits only until age 65. After that point, retirees often find themselves without adequate healthcare coverage.
What Are Long-Term Care Costs Like Today?
According to the U.S. Department of Health & Human Services, the median annual cost of a private room at a nursing home was $77,000 in 2014. This figure includes both direct and indirect costs. In addition, there were other hidden costs including lost wages due to illness or injury. For example, if a worker loses two weeks’ pay due to sickness, then the employer also pays unemployment compensation. If the employee recovers from the illness but does not return to work, then the company may have to pay out unemployment compensation again.
If you’re planning to retire soon, you may want to consider purchasing long-term care insurance. Long-term care insurance provides protection against the costs of custodial care, including assisted living and home care. If you’d like to learn about long-term care insurance, please contact our professionals at Helathbridge Insurance Solutions today to find out more about long-term care options!