Can You Afford To Live To 100?

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Published: Jul 31st, 2015
Can You Afford To Live To 100?
Article Updated:October 22nd, 2019

BY: Sharon Epperson/CNBC

Living into your 80s, 90s, or even longer can have a significant impact on your retirement planning and savings.

To make sure your money lasts as long as you do, many financial advisors say it is important to consider how you'll afford to pay for long-term care if you need it.

Longevity is a Major Planning Issue

At least 70 percent of people over 65 will need some form of long-term care services and support during their lives, and the costs can be astounding.

In 2015, the median cost for a semiprivate room at a nursing home was over $80.000, according to Genworth. The annual cost for an assisted living facility was $43,200. And a home health-aide runs about $45,760 a year. In 2019 this cost is much higher. Semi-private skilled nursing home is now $90,155. Base assisted-living facilities now average $48,612 a year. An average week of care at home now runs $52,624 a year.

Long-Term Care Insurance can help you cover these expenses and other services you may need when you're unable to do everyday tasks. Medicareonly pays for long-term care if you required skilled nursing care, but only for a relatively short period of time (a maximum of 100 days).

If you don't qualify for Medicaid, you will have to pay for long-term care services that are not covered by your insurance.

What's the cost of Long-Term Care Insurance coverage?

A healthy married 55-year old couple expect to pay under $250 a month in premiums for a long-term care insurance policy that's worth $150,000 each in potential benefits with 3% compound inflation, according to the American Association for Long-Term Care Insurance. 

Compare multiple policies since costs, discounts and benefit options can vary. Also, before buying a long-term care insurance policy, make sure you understand the terms—and consider how this policy will fit into your lifestyle and budget.

Editor's Note

There are several types of plans available to address the financial costs and burdens of aging. Long-Term Care Insurance is easy, affordable and rate stable income and asset protection. These policies are custom designed. Be careful, however, since premiums can vary over 100% between companies for the exact same coverage. This is why you should seek the help of a qualified Long-Term Care Insurance specialist. Find a specialist by clicking here.

Items to Discuss with a Long-Term Care Specialist:

  • Partnership – Most states offer special policies that provide dollar-for-dollar asset protection. The Long-Term Care Insurance Partnership Program might be one of the best-kept secrets in retirement planning. Make sure the specialist explains this program and how it might help you.
  • Tax incentives – There are federal tax incentives available for some people. If you own your own business be sure to ask.
  • Health Savings Accounts – If you have an HSA you can use the pre-tax money in your account to pay for the premium.
  • Asset-Based or Hybrid policies – These are life insurance or annuities with a rider for long-term care. Careful, only a handful are actually a long-term care benefit. However, one of these policies can provide you with the flexibility of both a long-term care benefit or a death benefit. They are expensive but can be paid with a single premium.
  • Health and Family History - Make sure the specialist asks you detailed questions about your health, family history, and retirement plans. Underwritingcriteria varies with each insurance company. If they are not asking you detailed questions then find another specialist.

Use the LTC NEWS Cost of Care Calculator 

Take a moment and find the current and future costs of long-term care in the area you live in. This will help you decide the amount of coverage is appropriate for you in your situation. For example, if you have a defined pension when you retire the amount of benefits you would need for long-term care would be less than an individual who will fund their future retirement with earnings off investments. In that case, protecting the principal is essential since that will produce your future income.

Find your state and use the LTC NEWS cost of care calculator by clicking here.

It is always best to start planning before you retire. Once you have your plan in place you will enjoy peace-of-mind and your family will thank you decades from now.

LTC News Contributor James Kelly
James Kelly

Contributor Since
January 1st, 1970

LTC News author focusing on long-term care and aging.

About the Author

LTC News author focusing on long-term care and aging.

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