Where Will You Be When You Get Older? Are You Prepared?

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. 

• What Is Underwriting In Long-Term Care Insurance?

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.

• How Much Does Long-Term Care Insurance Actually Cost?

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.