Soaring inflation fueled by skyrocketing energy costs has started impacting the markets, and some economists suggest a recession may be ahead. Inflation and declining markets make it more challenging for those considering retiring in the next ten years. But inflation is not the only concern. Soaring long-term health care costs will make a considerable dent in income and lifestyle and could adversely change your legacy.
Inflation and higher long-term health care costs are complicating retirement planning. Planning for long-term care has never been more critical than now, as high cost and high risk can adversely affect family and finances.
The U.S. inflation rate (as of April 2022) was 8.6%, up from 5.3% in August 2021. With consumer prices increasing, the stress on income, especially those who are retired or retiring soon, can start changing lifestyles.
Soaring LTC Costs Change Financial Dynamics
Long-term health care costs are also rising due to higher labor costs and labor shortages in some areas of the country. Markets have been up and down, with recession fears worrisome for investors.
Many people are so leery about inflation, long-term health care costs, and economic uncertainty that they are unsure how best to plan for their future retirements. The fear is that staggering long-term health care costs in the years and decades ahead can change the lifestyle of retirees.
The risk of needing long-term health care in the years ahead is not something to ignore. The risk of long-term care increases as you get older. While some people will never need care, about half of us who reach the age of 65 will need help with daily living activities or supervision due to memory loss.
Not Many Options
There are only a few ways to plan for the costs and burdens of aging. You either arrange for your adult children to become caregivers or pay for professional care. Neither option seems appealing to most people.
Health insurance (including Medicare and supplements) will pay up to 100 days of skilled services and nothing toward custodial long-term health care, which most people will require. Don't depend on Medicaid unless you have little or no income and assets.
Adult children are neither prepared nor trained to become caregivers for their parents. The ability to juggle jobs and families with the duties of being a caregiver is difficult, if not impossible, for most people. Plus, many care recipients have noted that they feel awkward having their daughter or daughter-in-law provide personal care like bathing and bathroom hygiene.
That leaves self-funding long-term health care costs or Long-Term Care Insurance. However, self-funding is costly and does not reduce the stress on your loved ones, and higher costs for long-term care services will take a bigger bite out of your income and assets.
LTC Costs Vary Depending on Location
For example, according to the LTC NEWS Cost of Care Calculator, if you live in Las Vegas, Nevada, in-home care now costs over $4,600 a month (based on a 44-hour week). In 25 years, that cost will average over $9000 a month Nevada Long-Term Care Resources | LTC News.
If you need assisted living, memory care, or nursing home care, that cost will be more, taking a bigger bite out of your financial resources.
Care costs do vary depending on where you live. Compare Vegas with Memphis, Tennessee. The exact amount of home health care in Memphis is averaging $3,852 today, and in 25 years, about $7500 a month Tennessee Long-Term Care Resources | LTC News.
The LTC Cost of Care Calculator will help you plan by showing you the current and future cost of long-term health care services where you live. Plus, you will see state-specific information that will be helpful in your devising your retirement plans.
How would an additional bill of $4000 or more a month do to your budget today, much less the much higher costs of long-term health care services in the coming decades?
Your choices are to pay perhaps well over $100,000 a year for future long-term care, place the burden of caregiving on your family, or add a Long-Term Care Insurance policy to your retirement plan.
A 55-year-old married couple in good health can find good coverage from $175 to $350 a month, depending on the actual benefits applied for, health, and other factors like inflation protection. Keep in mind that some insurance companies are much more expensive than others, with premiums varying over 100%.
Hybrid policies, which combine life insurance or an annuity with a qualified rider for long-term care, would be more costly but come with a death benefit.
Ignoring LTC Risk Can Be Devastating
Surveys have reported for years that people overestimate the cost of Long-Term Care Insurance and underestimate their risk of needing long-term care. Do you want to be dependent on your family? Would you feel comfortable spending large sums of money on professional care?
You may have planned well for your future (or current) retirement, but long-term health care costs will change everything. Just a small amount of in-home care will create financial pressure, not to mention the emotional burden on the rest of the family.
Affordable Long-Term Care Insurance offers you guarantees. You will have access to your choice of quality care options, including in-home care. Your loved ones will have the time to be family instead of being your caregiver. Plus, your assets will be preserved protecting your lifestyle and legacy. All the benefits are tax-free.
Being prepared for the consequences of aging will safeguard your assets and give your loved ones time to be family instead of caregivers. But remember, you cannot purchase a policy when you need care. You also have no clue when your health declines and your need for care will start. Nor do you know when the markets will drop. Trying to time everything just right is not possible.
States Taxing You When You Don't Own LTC Insurance?
Now there are 12 states considering following Washington's lead in taxing people who do not own a Long-Term Care Insurance policy - Multiple States Considering Implementing Long-Term Care Tax | LTC News.
Planning when you are younger will save you money, help secure your future retirement, and perhaps, get you out of a tax.
Retirement planning can be complicated. When you consider inflation and higher long-term health care costs, the consequences of ignoring the problem will change your lifestyle and that of your family.
About the Author
Linda is a former journalist who now enjoys writing about topics she is interested in so she “can keep her mind active and engaged”.
Contributor since December 11th, 2017
Getting access to quality care options and reducing the stress on family remain the primary concerns about long-term health care other than the growing cost of care. The cost of care can reduce the quality and increase stress unless you are prepared.
Being prepared for future declining health, mobility problems, and dementia is easy if you do it sooner than later. For many people, affordable Long-Term Care Insurance has become a big part of their retirement plan.
Some people delay or ignore the problem. They either perceive the issue as not a big concern or think they can wait until they get older. Neither is true. The risk of needing long-term health care grows over time, and the costs can be devastating.
What surprises some people is how affordable Long-Term Care Insurance can be when appropriately designed and you select the right insurance company. Premiums can vary over 100% between insurance companies. Insurance companies must file their products and pricing with each state's insurance department so no individual agent, agency, or advisor can offer special deals.
Seeking help from a qualified specialist who works with the top companies will make the process much easier. Most people obtain coverage in their 50s.
You might have questions and LTC NEWS answers many of the most asked questions here - Frequently Asked Questions | LTC News.
Seek Professional Help Planning for Long-Term Care
Experts recommend seeking the help of a qualified and experienced Long-Term Care Insurance specialist to help you find the right coverage. A specialist will match your age, health, and family history with the right coverage at the right price.
Long-term care is a very specialized area, and few insurance agents and financial advisors have the expertise. Find a specialist who represents the top companies as premiums can vary over 100% between insurance companies. Leading specialists will often have over 500 clients with Long-Term Care Insurance.
A specialist will save you money, and you will have peace of mind knowing they are making the appropriate recommendations - Work With a Specialist | LTC News.
Planning Tools and Resources Available on LTC NEWS
Planning for the future is never easy, but long-term health care planning can be very complicated and comes with many emotions. Getting the right tools and resources will make the process much easier.
One of the goals is to reduce the stress and anxiety usually placed on your family at the time of crisis. LTC NEWS can be beneficial in providing you with important information for you to consider.
LTC NEWS has put in place several resources, including:
The LTC NEWS Cost of Care Calculator will show you the current and future cost of long-term health care services where you live. Plus, each state has vital state-specific information you should know - Cost of Care Calculator - Choose Your State | LTC News
The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area.
Compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.
A detailed tax guide that includes available tax incentives can be found by reviewing the Long-Term Care Tax Benefits Guide.
Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.
Need Help Now for Mom or Dad?
If your family is already in crisis and you need to find help for mom or dad, LTC NEWS can help. We have put together several comprehensive guides to help you in your process.
Start by reading our four guides -
If your loved one is lucky enough to own a Long-Term Care Insurance policy, be sure they use it. Sometimes families wait, thinking they can save the benefits for a rainy day. Waiting on using available Long-Term Care Insurance benefits is not a wise idea.
Get Assistance in Filing a Long-Term Care Insurance Claim
Many insurance companies have issued Long-Term Care Insurance policies over the years. Filing a claim can sometimes be complicated unless you know what to do or get expert help and assistance.
Don't allow the claim process to stop you from using the benefits available in an LTC policy. Quality care obtained early will help provide a better quality of life and reduce the risk of a deep decline and facility care.
If you need help in starting the process of a Long-Term Care Insurance claim, LTC NEWS can help. LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with a Long-Term Care Insurance policy. We have teamed up with Amada Senior Care, who will do all the work - free with no obligation.
Get help finding quality caregivers or long-term care facilities and get recommendations for a proper care plan, whether a person has a policy. - Filing a Long-Term Care Insurance Claim | LTC News.
Advantages of Reverse Mortgages
Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance. You might be eligible at younger ages as well.
Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, and even help with cash flow during your retirement.
Learn more by asking questions to an expert. Mike Banner, LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages.
- Just "Ask Mike." - Reverse Mortgages | LTC News.
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You can write a story or ongoing column for LTC NEWS. You can write about many topics, including aging, caregiving, health, lifestyle, retirement planning, and long-term care, to name a few.
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