In the vibrant tapestry of life, home is where we weave our dreams, particularly in our youth. Sadly, many people in their 40s and 50s tend to brush aside the significance of planning for their sunset years, overlooking the inescapable consequences of growing older.
However, as the years unfurl, our thoughts naturally drift toward the horizon of retirement and the challenges that accompany aging. Time, much like sand, slips through our fingers more swiftly than we can comprehend.
Pause for a moment and contemplate the landscape of your own retirement journey. Are you well-equipped for the twilight of your life? Have you envisioned the sanctuary you will call home when you retire?
When the day arrives that you need long-term health care, where will you find solace and support, and who will be your guiding star? Above all, will your financial reserves be sufficient to ensure quality care, without casting a shadow of stress and burden upon your family?
Most people want to age in place. Some people will downsize and move into another home, but the desire to stay at home increases with age. The importance of being at home has received much attention during the COVID-19 virus crisis. The desire to be "at home" is not going away.
- A recent AARP survey shows that 3 out of 4 adults aged 50 and older want to stay in their homes and communities as they age. However, when asked about the likelihood of that happening, most say it won't.
The survey showed 76% of the respondents aged 50+ desire to stay in their home; only 53% of 18-49 felt this was important. The survey occurred before the COVID-19 crisis. Only 46% anticipate they will be able to accomplish that goal.
Majority of Care Provided at Home
The National Care Planning Council reports that approximately 73% of all long-term care is provided at home, often by unpaid family caregivers, such as spouses or adult children. The burden on these selfless individuals is immense, as caregiving can be both physically and emotionally taxing.
Initially, non-skilled care services offer basic assistance at home. However, as the care recipient's needs escalate, so does the level of skill required to provide adequate care. Family caregivers may lack the physical capability or the expertise to perform these tasks safely and effectively.
If resources permit, families may enlist the help of paid professional caregivers who are better equipped to manage tasks such as bathing, addressing incontinence issues, lifting, and providing other essential services that become more critical as we age.
It's important to note that not all care recipients are elderly. Health incidents and accidents can necessitate long-term health care at any stage of life. People may require long-term care services and support due to illness, accidents, or the effects of aging, including supervision for those with dementia. The likelihood of needing extended care increases as we grow older.
The American Association for Long-Term Care Insurance (AALTCI) reveals that nearly 8 million Americans currently benefit from home health care services, while only 1.8 million reside in nursing homes at the time of the publication of that report. The trend is expected to continue.
According to the Centers for Medicare & Medicaid Services (CMS) most recent data, as of the week ending 04/16/2023, 10.2% of nursing home residents are under the age of 65. This means the United States has approximately 1.4 million nursing home residents under age 65.
There are several reasons why someone under 65 might require a nursing home. Some common reasons include:
- A serious or long-term illness or disability
- A traumatic brain injury or spinal cord injury
- A developmental disability
- A mental illness
- Substance abuse
- The death of a spouse or caregiver
- Financial difficulties
According to the American Association of Long-Term Care Insurance Companies (AALTCI), about 15% of those receiving long-term care insurance benefits are under the age of 65. This number has increased in recent years as more people purchase Long-Term Care Insurance at younger ages.
LTC Insurance is Paying Benefits for Care at Home
Do you want to age in place in your home? Prepare family and finances for the consequences of aging. Long-Term Care Insurance gives you the choice of care, including in-home care. Own a solution that keeps you in control and gives loved ones the time to be family instead of caregivers.
- Just over 51% of Long-Term Care Insurance claims start at home. Only 23% of LTC Insurance claims start in a nursing home. Interestingly enough, 43% of these claims ended with care at home. The data suggests people with Long-Term Care Insurance are better able to stay in their own homes.
Home care services are more cost-effective than nursing homes, except for those needing round-the-clock attention. For such individuals, assisted living, memory care, or nursing home facilities may be more suitable alternatives. Nevertheless, if family members cannot provide care (often the case over extended periods), the question arises: How can one finance the potential care needed in the future?
Cost of Care is Expensive and Going Up
The LTC NEWS Cost of Care Calculator says the national average nursing home cost in 2023 is $108,199 a year for a private room, a little less for a semi-private room.
The base cost of an assisted living facility averages $50,712 a year nationally. Home care providers average $57,087 a year based on a 44-hour week.
Increasing demand for long-term health care with increasing labor costs will keep the cost rising sharply in the years ahead. The costs do vary depending on where you live and the type of care you require.
For example, in Corpus Christi, Texas, in-home care (based on a 44 hour week) averages about $3,686 a month today, but in 25 years, that cost is expected to run about $7,175 a month - Texas Long-Term Care Resources.
Compare Corpus Christi, Texas, with Champaign, Illinois, where in-home care averages about $4,759 a month today. In 25 years, that same care will run about $9,263 a month - Illinois Long-Term Care Resources.
While preparing for future long-term health care, it's crucial to recognize that it encompasses both financial and familial aspects. Adequate cash flow is necessary to cover your preferred care option, and it's essential to have access to quality services that enable your family to focus on being a loving support system.
Including affordable Long-Term Care Insurance in your retirement plan can offer guaranteed tax-free benefits, which can be utilized for the kind of care you desire, including the in-home care that most people prefer. This approach helps maintain control and independence while preventing overdependence on family and friends.
Choice? Do You Want Choice?
Having a choice is essential, and obtaining a Long-Term Care (LTC) policy can grant you that flexibility. So, when is the best time to purchase a policy?
Ideally, you should consider buying LTC Insurance in your 40s or 50s. Since these policies require medical underwriting, being in relatively good health is important.
Keep in mind that each insurance company has its own set of underwriting rules. Therefore, consulting an experienced LTC Insurance specialist can be invaluable in helping you navigate the various options.
Contrary to popular belief, Long-Term Care Insurance policies are affordable for most people, especially if purchased in their 40s and 50s. These policies can be tailored to your needs, and premium costs can vary significantly—sometimes by over 100%—between companies for the same coverage.
Get Accurate Quotes with Professional Recommendations
All too frequently, families consult a general insurance agent or financial advisor and receive "a quote" from a single insurance company with a specific policy design. While some companies may offer expensive policies, it's essential not to assume this represents the entire spectrum of available options. In fact, many people discover that when they work with a specialist, they can find very affordable coverage.
Long-Term Care Insurance is customizable, and a knowledgeable specialist representing the major top-rated insurance companies can help you find affordable alternatives based on your age, health, and other factors. A specialist will provide you with accurate quotes from all the top insurance companies and provide you with their recommendations.
You can locate a qualified and trusted specialist but be sure they are really specialists. Ask the individual how many people they have personally helped obtain Long-Term Care Insurance. Top specialists have helped thousands of clients nationwide. Ask them how many claims they have helped process. Also, ask if they fully understand the underwriting of each top company and know the importance of federal regulations, tax incentives, and the Long-Term Care Insurance Partnership Program.
Most likely, the specialist you find will not be local as there are not many specialists nationwide. That is ok since most planning is now done remotely using technology and the telephone.
Today's Long-Term Care Insurance policies are more rate-stable, with many states implementing rate-stability regulations. Additionally, today's premiums are priced according to the persistent low-interest-rate environment.
Partnership LTC Insurance Offers Additional Asset Protection
Partnership LTC Insurance might just be one of the best-kept secrets in retirement planning. Those fortunate enough to reside in one of the states offering Partnership Long-Term Care Insurance can benefit from dollar-for-dollar asset protection.
You will be able to legally shelter part of your estate even if you exhaust all your insurance benefits. No matter what happens to you, you will never lose everything you have earned during your lifetime that you eventually want to go to your children and grandchildren.
As you age, it's important to remember that your health and body will change, and you may experience cognitive decline. Many of these changes could necessitate assistance with daily activities or supervision due to dementia.
By planning ahead for the future expenses and challenges of aging, you can protect your income and assets while alleviating the stress and burden on your loved ones.
Take the initiative to secure peace of mind, knowing that your preferences will be honored as you grow older. Find a suitable policy and prepare for a successful and comfortable retirement, ideally in your own home.
Most people obtain coverage in their 40s and 50s as part of their retirement plans. There are very few employer plans that are affordable and meet federal guidelines. This is another reason to find a specialist to help you in your research.
About the Author
An LTC News author focusing on long-term care and aging.
Contributor since August 21st, 2017
Long-Term Care Insurance safeguards your income and assets so you can maintain your lifestyle and preserve your legacy. But, perhaps as important as anything else, LTC Insurance gives your loved ones the time to be family, reducing the stress and anxiety otherwise placed on them.
The time to obtain coverage is before retirement, ideally in your 40s or 50s, when premiums are lower and your health is better.
Resources on LTC NEWS Available Right Now
LTC NEWS offers several tools and resources to help you in your research for a planning solution or help your family find the appropriate care for a loved one at the time of crisis.
To help you plan for the future costs and burdens of changing health and aging, LTC NEWS can put together several resources, including:
- The LTC NEWS Cost of Care Calculator will show you the financial impact of long-term health care where you live. It will also show you state-specific information on tax benefits, care options, rules, and more.
- The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area.
- Get answers to the most frequently asked questions -Frequently Asked Questions
- 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.
Seek Professional Advice
Insurance rates are regulated, so no insurance agent, agency, or financial advisor can give you special deals. However, premiums do vary dramatically between insurance companies for the same coverage.
Experts suggest using a qualified Long-Term Care Insurance specialist to help you navigate the many options available to you and your family.
A specialist who works with the top companies can match your age, health, family history, and other factors and find you the best coverage at the best value.
A specialist will save you money, and you will have the peace of mind knowing they are making the appropriate recommendations - Find a Qualified LTC Insurance Specialist.
Find Quality Caregivers and Long-Term Care Facilities
If your parent or loved one needs care now - or soon - you will need to find the appropriate care in the right setting, depending on their needs.
Take a moment and read -
Get Expert Help Filing an LTC Insurance Claim
LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claim process with your Long-Term Care Insurance policy.
You can also get support finding quality caregivers and get recommendations for a proper care plan, whether a person has a policy or not. - Filing a Long-Term Care Insurance Claim.
Benefits 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.
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. LTC NEWS columnist and host of the TV Show "62 Who Knew" Mike Banner will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages.
Just "Ask Mike." - Reverse Mortgages.
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