The Most Neglected Retirement Expense: Long-Term Care

Effectively retiring from your career involves various expenses. As a retiree, you will need to make certain adjustments in your lifestyle to cope successfully. According to data from the Society of Actuaries, a majority of Americans are ill-prepared to deal with these changes. Typically, 85-year-olds depend on family members and home aides for long-term care and support. Currently, a large percentage of retirees in need of long-term care depend on expensive nursing homes or assisted living facilities.


For those without a family, it is extremely important that they have a retirement plan in place. Today, 32% of 85-year-olds receive assistance from family members on matters like transportation, household chores, and meals. Besides, hiring an aide is an expensive undertaking for most seniors. Having a retirement plan ensures that you can continue enjoying a reasonable standard of living once you retire. Accordingly, your plan should factor in your long-term healthcare needs throughout your retirement. Otherwise, your retirement might prove more stressful than expected.


Probably, You Will Need Long-TermCare…


You might think that you don’t need long-term care, but this is far from the reality. A recent study suggests that 70% of over 65-year-olds will require long-term care at some point in their lives. What’s more, 69% of them need care for a period of three or more years.  Medicare limitations mean that you can’t enjoy its benefits.  For instance, Medicare covers only 22 days of your stay in a nursing home. Arguably, this is inadequate if you are looking for a stay of three years or more.


And It Requires Money Too


Tentatively, how much does an extended stay in a nursing home or assisted living facility cost? Possibly more than you project. According to the Genworth Financials 2017 Cost of Care Survey on average assisted living facilities charge$3,750 to $45, 000 annually. On the other hand, nursing homes charge an average of $235 per day equivalent to$85,775 per year. And that’s for a semi-private room. So if you need an own room, you’ll have to pay $267 per day or $97,455 for a year.


Although a stay in a nursing home or assisted living facility might not be necessary. Nonetheless, you might need help to function independently. Also, if you don’t have a family to live with, you may need to hire an aide. Presently, non-medical home aides charge $21 per hour equal to $11,000 per year.

But what does this imply for you? That you need to create a savings plan during the time you are employed. Doing so is essential for catering to all your retirement needs. Starting early is the key to guaranteeing a successful retirement future.


Even so, there is a bright side! Perhaps, you could increase your contribution amounts through the remaining years of your employment. For instance, try stashing an additional $250 per month above your present premiums for the next 20 years of employment. This equates to $123,000 at an interest of 7%, an increase in the amounts of funds in your retirement fund. With these funds, you can comfortably cover a three-year stay in an assisted living facility.


Also, you could get long-term health care insurance as a second option. Obtaining a policy while you are still young increases your approval chances as well as earning you health based discounts. Remember that having healthcare insurance can help you offset the costs of long-term care when you are significantly older. And lastly, consult your family early in your life about the type of assistance you’ll expect when you’re older. Why is doing so important? As it will help you avoid uncertainties in aces your kids relocate abroad or join the workforce. To top that, knowing where, when and from whom to expect assistance safeguards you against potential disappointment along the way.

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