A 2015 report by the U.S. Department of Health & Human Services estimates that about half (52%) of Americans turning age 65 today will require long-term care services at some point in their lives.
Long-term care (LTC) is the type of care you may need one day if you ever need help with the basic activities of daily living, such as eating, bathing, and dressing. Planning for its costs now may help you afford quality care in the future and reduce the risk of LTC expenses draining your retirement savings.
3 Ways To Plan For LTC Expenses
1. Build Up Your Savings
One way to prepare for the possibility that you may need long-term care one day is to save enough money to cover LTC expenses on your own. The advantage of this approach is that if you do not need LTC services, your heirs will eventually inherit the money you set aside for long-term care.
2. Purchase A Traditional LTC Insurance Policy
This type of insurance policy generally covers part of the cost of LTC services received at home or in a nursing home, assisted living facility, or adult day services center.
3. Purchase A Combination Of LTC And Life Insurance
Combined coverage generally pays benefits for long-term care if you ever need it and a death benefit to your beneficiaries, reduced by any LTC benefits you received.
Who covers long-term care?
Medicare only covers long-term care in limited circumstances, such as a short stay in a skilled nursing facility after hospitalization. It does not cover long-term care if that is the only type of care you need.
Medicaid will pay for some LTC services, but your income and assets must be extremely low to qualify for Medicaid.
The Veterans Health Administration provides some LTC services to individuals enrolled in its health care system.
Please talk to us about how to plan for the cost of long-term care. With offices in Rutland and Williston, Vermont Copper Leaf Financial develops a customized wealth management plan designed to integrate every aspect of your financial life. Our approach is to provide clarity and calm amidst the chaos. Where there is uncertainty we look for facts. We call our approach evidence-based investing. Call us today at 877-974-5341 to schedule a strategy session and begin building your road map to financial success.
Article published in December 2020 edition of Eye on Money. If you would like to be added to our mail list please email [email protected].