Protect What You Worked For

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Will You Need Long Term Care?

This is interesting: How much did you earn, or will you earn in your lifetime? Most people work 40 hours (or more) per week, 50 weeks per year, for 40 or more years. That totals at least 80,000 hour of work in a lifetime. As a result of all of this work, most people have accumulated a “nest egg”.

Next time you are in a group of ten people – friends, co-workers or possibly in the room that you are right now. Look around and know that about one half will need home care or care in some type of senior facility, during their lifetime. This is somewhat frightening. According to “Financial Web: 70% of people who live to age 70 will require long term care (LTC) during their lifetime. About 20% of LTC recipients need care for more than 5 years. Women, on average need 3.7 years of LTC in their lifetimes. Men need 2.2 years. The cost of Assisted Living is about $3,000 monthly, while skilled facility care commonly runs $5,000 to $6,000 monthly.

So, the questions become: Do I expect to live to age 70? If so, will I be one of the 7 out of 10 in this room who need LTC? If so, for how long? Most importantly, how can I pay for this care?

Most people will spend their “nest egg”, but that does not need to happen, especially if you wish to pass part or all of your assets to your children. However, as uncomfortable as it may be, it is important that you plan for this need. After all, those that can pay for quality care are most likely to receive that care.

To gather information, it is important to understand, you may have sources for income/benefits and options that may not be apparent to someone who does not specialize in this area. This advice can be nearly priceless. Ask about the “spousal impoverishment provision”. This may allow financial relief for the community spouse.

Some considerations could include: changing your present life insurance plan to a life plan covering LTC: Using non-qualified annuity income to pay LTCi premiums tax free. You may be able to change a current annuity to an annuity covering LTC.

Other possibilities may include: You may also have funds payable to you if you are a Veteran who has served during war time, or the widow of this Vet. This could help by providing up to $1,949 in monthly income for a couple to pay for non-reimbursed LTC expenses received at home, assisted living or in a facility. Other social programs may be available. Medicaid may help if all else fails, but you may need to spend-down your assets.

As you research your options, you should consider your current expendable income if you were in a facility. This includes your Social Security retirement income, pension, interest/dividends from a 401k or other assets. Without going to your children, where can the balance of this $5,000 a month come from?

Most every situation is different and you should consult qualified people who work in this area of expertise. Make a plan to solve this need. You will save yourself and your children much stress and position the best care available for your future.

Written by

Steven A. Buttice is the president of Medical Reimbursement & Management Services, Inc., a firm specializing in issues affecting seniors, including seminars and consultation on Medicare Plans, Long Term Care and other types of insurance, claims issues, and sales/service of insurance products since 1984.

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