Long Term Care – The No-Go Years

The retirement years can be divided into the go-go years, the go-slow years, and the no-go years. So many retirements have been wrecked by not planning for the no-go years.

According to the US Dept of Health and Human Services, relative to people over 65, 19% will need long-term care for one to two years. 21% will need care for two to five years, and 13% will need care for more than five years.

Statistically, almost 70% of people who live to age 65, will need help with at least two activities of daily living (long-term care) for some period of time.

The care will be provided in some combination of homes, assisted living communities, or nursing homes as the level of care needed increases. The average length of stay in an assisted living community is about 2 years. 59% of assisted living residents have to go on to a nursing home.

Let’s look at the 2018 Genworth Cost of Care Survey for Knoxville TN. The average assisted living room was over $48,000 per year. A nursing home bed costs about $84,000 per year. A home health aide working 44 hours a week costs almost $43,000. And these costs are predicted to increase by 34% by 2028.

If you need care how are you going to pay for it? In a lot of cases, if you have not planned ahead, the family ends up providing the care. Often times the spouse becomes the primary caregiver. Sometimes, the only option is moving in with an adult child.

You can plan ahead and buy a long-term care insurance policy or a life insurance policy that also covers long-term care. There are also annuities that have a long-term care benefit. Or you can decide to cover long-term care costs from your assets.

What do you do now?

You pick a path today that you can follow throughout your retirement. You plan today for long-term care and for the other things that can knock you off that path, so that you know in advance what to do if those things occur. And you put it in writing. You plan today and you put it in writing.