One of the trickiest things about retirement planning is considering the consequences of aging on you and your family. Many people ignore long-term health care, yet the risks of future long-term health care can alter your future retirement and change the relationship you have with your family.
New research shows the risk of long-term care on you and your family is substantial. Researchers at the Center for Retirement Research at Boston College report that 3 in 5 people will need a significant amount of help and assistance, with only 1 in 5 not needing any care at all and 1 in 5 needing only a minimal amount of care.
While most people will need a moderate amount of care for one to three years, one in four will need a high level of support that can last years or more.
How Much Care Will You Need?
The study reviewed two decades of research to determine the potential risk of a 65-year-old needing long-term health care services and supports. The researchers categorized three levels of potential needs - minimal, moderate, or severe.
Lifetime experiences from 65-year-olds observed in the Health and Retirement Study indicate that about one-fifth will need no support as they age. One-quarter are likely to experience the type of severe needs that most people dread.
However, the researchers note that married individuals, who tend to be wealthier and enjoy the support of a spouse, are more likely to experience no or minimal long-term health care needs and less likely to experience severe needs than unmarried individuals.
That does not mean they do not need the care - only that a spouse could provide the care and do so for more extended periods of time compared to others.
Unmarried women face the biggest risk of a severe long-term health care event.
Spouses and Family Caregivers Face Stress and Anxiety
While there is some uncertainty as to when and how much care you may need in the future, there is no question that the costs of long-term health care services are getting more expensive, not to mention the impact it will have on your family.
The study does not review the impact caregiving providing by an older spouse or adult children has on the family. Caregiving has been known to be very demanding physically and emotionally.
Adult children who find themselves in the role of a caregiver see substantial stress and anxiety as they attempt to balance their role as a caregiver with their other responsibilities to their careers and families.
Older spouses who provide care find their own health decline quicker as they attempt to provide the needed care.
The relationship the care recipient has with their family caregiver also changes, making it uncomfortable for everyone. When family members become caregivers, it brings a role reversal, making it harder on everyone. Care recipients also tend to feel guilty placing this burden on those they love.
Long-Term Care Costs Growing as Demand and Labor Costs Increase
Paid long-term care services are getting more costly every year. The LTC NEWS Cost of Care Calculator says the national average cost of a nursing home running over $100,000 a year, with the cost varying depending on location - Cost of Care Calculator - Choose Your State | LTC News.
However, most long-term care services and supports are delivered outside of nursing homes. In-home care, adult day care centers, assisted living facilities, and memory care facilities are also expensive, and with the growing demand, the costs are increasing as well.
For example, if a person needed three years of in-home care in Dallas, Texas, the cost would run about $160,000 today - in 25 years, the same amount of care would run about 353,000 Texas Long-Term Care | LTC News.
But if you live in Medford, Oregon, the same amount of in-home care in 25 years would average about $400,000 -Oregon Long-Term Care | LTC News.
Don't forget the exact amount of care a person may require also varies. In addition, you add adult day care or assisted living costs, and these costs can be devastating.
A 55-year-old today, in 25 years, could see the cost of long-term health care take a significant junk of money out of their assets, if not wipe out most American families financially.
Health Insurance and MedicarePay Little Toward LTC Costs
Health insurance will not pay for most of this care, and that includes Medicareand supplements. Medicaid will pay for long-term care services, but you must have little or no income and assets to qualify for the benefits. In addition - you must use Medicaid providers.
Long-Term Care Insurance will pay for any type of long-term health care, including in-home care services; however, you must purchase the policy before you need care. Many people are unaware or choose not to purchase LTC Insurance until their health deteriorates or they face age-related issues. You must have reasonably good health to purchase Long-Term Care Insurance.
Washington State has started a program where the state has added a payroll tax if you do not own a qualified Long-Term Care policy. Several states are considering similar tax laws to force the issue. In Washington, the state gave citizens a small period of time to purchase a policy, but it is the only time anyone is being given to 'opt-out' of the tax. If you don't own Long-Term Care Insurance, you will pay the tax on 100% of earned income and qualify for $36,500 in lifetime care benefits which amount to very little care - States May 'Tax' You if You Don't Have LTC Insurance. | LTC News.
Being prepared for long-term care will make getting older easier on you and your family, so you have more time to enjoy life with less stress. Some financial advisors say that since some people may never need care, why would you ever plan? According to specialists, the statistical risk is still high, but the insurance solutions are generally very affordable, especially if you purchase a policy when you are younger and healthier.
For some reason, many people want to discuss the 'odds' about long-term care. Despite the low risk, very few people discuss the odds of insuring your home against fire, earthquake, hurricane, or tornado.
The need for long-term health care will either happen or not. If it does, how will those costs and related burdens on your loved ones change your life - and their life?
Aging happens, and we can't get around that. Our health will change, and our bodies get more fragile and break down. Many people will suffer from some type of dementia as they get older as well.
A solid plan includes affordable Long-Term Care Insurance. When you read some articles, you generally do not see the word 'affordable' associated with LTC Insurance.
The truth is that Long-Term Care Insurance is custom designed. You get to decide the amount of benefits you wish to have in place. Plus, if you purchase a policy when you are younger and healthier, you will enjoy lower premiums.
Many financial advisors and general insurance agents tend to recommend benefits that are higher than what most people require. Plus, premiums can vary over 100% between insurance companies.
Most Long-Term Care specialists represent the top companies and can design an appropriate plan that fits your needs and budget. In addition, a specialist will also shop the top companies and match your age, health, and family history, so you get the best coverage at the best value - Work With a Specialist | LTC News.
Planning Tools Available on LTC NEWS
You can compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.
The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area. There are also available tax incentives, and see if these tax incentives are helpful - Long-Term Care Tax Benefits Guide.
Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.
Benefits of Reverse Mortgages
If you - or your loved one is in crisis now, a reverse mortgage could be an answer. Many people today that have much of their savings invested in their home.
With today's reverse mortgages, you can use the money in your home to fund a Long-Term Care Insurance policy, add retirement income, or even pay for in-home care if you need care now.
Learn more now - Reverse Mortgages | LTC News.
Get Advice Finding Quality Caregivers. Get Help Filing an LTC Insurance Claim
If a loved one already needs in-home care or owns a Long-Term Care Insurance policy and needs assistance filing the claim, LTC NEWS is here to help.
LTC NEWS provides free assistance with no obligation - Filing a Long-Term Care Insurance Claim | LTC News. You can also help find caregivers and get recommendations for a proper care plan, whether a person has a policy or not.
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Just write a story or ongoing column for LTC NEWS. Stay on topic with articles on health, aging, caregiving, retirement planning, long-term care, and other topics that interest adults over age 40.
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