We don’t want to accept the fact that we are getting older. We also don’t want to accept the fact that we may require nursing home assistance or long-term care in the future. Because we avoid thinking about these tough circumstances, we rarely consider how we would pay for it.
According to the Genworth Cost of Care Survey of 2019, 70% of Americans over the age of 65 will eventually need some type of long-term care. In addition, by the year 2040, 22% of the population will be over the age of 65. This is a 10% increase from the year 2000. According to the Genworth Survey, more and more of us refuse to believe that we will ever need long-term care.
Look to your left and then to your right. At least 2/3 of the people you see will need some type of long-term care in their lifetime. Many people believe that Medicare will pay for their long-term care. That is FALSE! If you need long-term care, and the odds are that you will, you need to start planning now so that you can pay for it when that time comes.
If you have long-term care insurance, depending on your policy, all or a part of your long-term care may be covered. If not, your bank account and other assets would be used to pay for a nursing home or other forms of long-term care. If you don’t have sufficient income and assets, then the last resort is Medicaid. But this program has very strict income and asset qualifications.
Nursing Home Costs
Just how much does long-term care cost? Again, according the Genworth Survey, the monthly average cost of a home health aid is $4,385; the average cost of an assisted living facility is $4,051, and the average cost of a nursing home is $8,517. These are staggering numbers given the fact that the average Social Security benefit is $1,503 per month.
Despite the vast amounts of information, most of us are not prepared for the costs associated with long-term care. I can only conclude that we are all reluctant to face the possible loss of independence related to our age. This leads to us sticking our heads in the sand and failing to plan for the possibility of needing long-term care.
Although not a pleasant topic to think about or discuss with your family, long-term care planning is an absolute necessity. We are in the business of providing options for people in planning for their potential long-term care needs. If you, a loved one, or a client needs help determining their options, please think of us. We can help and we are always happy to hear from you.