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When we think about retirement, we prefer to highlight the positive: growing older in our own home, visiting the grandchildren — in the end, traveling the world.
Eventually, many older people will need elder care — maybe because of physical or mental impairment — and they and their families will have to find a way to pay.
Sadly it’s rarely cheap. It can wipe out the savings in a person’s life quickly.
And while that might well be what lies ahead, there’s also a less pleasant reality to be considered: the idea that unexpected health issues or long-term illnesses might sham your plans — and your finances.
Long-term care is the phrase used to refer to the need for ongoing assistance with basic living activities such as dressing, eating, or bathing, typically resulting from prolonged illness or disability.
It may include things like requiring some help with household chores or nursing care around the clock.
You need a proper long term care strategy in advance for a peaceful retirement life.
Assume of long-term care as the daily help that people with long-lasting illnesses (chronic diseases), disabilities, or other conditions need.
Some people require several months of long-term care while others need it for years or a lifetime.
Long-term care includes but is not limited to:
Many people get long-term care at home, most of it from family and friends.
There are also public and private organizations offering home and community-based services.
Some examples are homemade meals, nursing visits, and daytime supervised programs. Some people decide moving to a different kind of living arrangement makes sense.
For example, retirement communities typically offer maintenance, housekeeping, and dining services.
Assisted living is an option for people needing personal care help such as bathing or getting dressed. And nursing homes provide 24-hour care for people with greater health needs.
Medicare, the federal health insurance program primarily for adults aged 65 and over, pays for many older Americans' doctor and hospital bills. However, it doesn't cover everything.
The plan does not cover long-term custodial care for help with everyday life activities such as bathing, dressing, and eating.
There are other costs which are also uncovered.
These can be devastating to your finances if you don't have a plan in place.
In contrast to Medicare, which is largely a federal program, Medicaid is primarily state-run, which results in varying degrees and types of LTC coverage.
In general terms, Medicaid covers custodial care in a nursing home in all states for qualifying people.
Custodial care is for those who cannot carry out some or all of the daily living activities (ADL) without assistance:
Medicaid generally requires that you cannot independently actually perform two of these six ADLs — much like LTC insurance policies.
If you qualify for Medicaid by meeting the ADL requirement and your state's income and asset requirements, you can probably use Medicaid to pay the entire cost of care in a nursing home.
Most long-term care insurance plans are customizable, inflation-protected, and pay-as-you-go, and daily or monthly benefits may be paid out.
They are not cheap, however, with plans ranging from $2,000 to $5,000 per year at the time of purchase for couples aged 55.
Establishing a long-term care plan is not just about spending budgeting, or financing the risk through a product such as long-term care insurance.
To plan for long-term care properly, savers need to decide how to get care, what type of care they want to receive, who will provide that care, grant family members permission to provide care and develop a way to finance the costs.
In the end, the best long-term care funding strategy is the one that meets the needs, means, and goals of the client.
However, planning early is always better than planning late, no matter what strategy a client eventually chooses.
By educating yourself on the options available and tackling tough client interactions early on, you can offer far greater protection for the assets you are helping them accumulate.
Our mission is to help you achieve your goals by showing you ways of protecting what's important to you, investing in your future, and preparing for your retirement.