Long-term care planning should be a primary concern to families of the sandwich generation. This generation is faced with caring for their own children while simultaneously helping to care for their aging parents. Most of us feel that the need for nursing care or assistance with every day activities is not something that would happen to us. If it does, the plan we have in the back of our minds can potentially be unrealistic and a burden to other family members. This is why, we at Mintco Financial, feel that it is imperative we put a realistic long-term care plan in place as part of your retirement planning. The time for this planning is now while your health is good and your at your current age. The cost of your protection is based on your age and your health. The sooner you take action the lower the cost.
Some common misconceptions we hear from clients are the following:
MEDICARE WILL TAKE CARE OF THE COSTS Medicare may pay for a nursing home stay under certain circumstances, but it won’t cover long-term care there. The same thing is true with at-home care.
IT WILL NEVER HAPPEN TO ME Why allocate a portion of your retirement nest-egg into a long term care program if there is a chance you will never need it? It’s a reasonable question, so consider your odds.
The long-term care insurance industry, thinks your odds aren’t so great. For people age 65 and older who have long-term care insurance, there is a 45 percent chance of making a claim, though it ranges from 30 to 56 percent depending on gender and marital status.*
Let our team of advisors show you methods to protect your nest-egg without ever being concerned about depleting it.
I CAN SELF INSURE Can you really afford to pay for the care yourself? The average rate for a private room in a nursing home is approximately $229 a night, or $83,585 a year, on average, though it can range widely by geography. Average costs for home health aides are $21 an hour **. And what is the true cost of being among the unlucky here if you roll the dice and buy no insurance at all? The total cost without insurance would be about $1.5 million. We can show you how to cover these expenses without eating away at your retirement nest-egg, so why not plan ahead?
I WILL QUALIFY FOR MEDICAID If your plan is to qualify for Medicaid to pay for nursing home costs, you may be surprised at how much this plan will cost you, and perhaps your family too. Not to mention how much freedom you will give away to qualify for this plan. In order to qualify for Medicaid you have to spend down a portion of your assets. Each state has their own qualifications. When we approach long-term care planning with our clients, if their assets are low enough to use Medicaid as an option we inform them of such.
Medicaid will not offer the same choices that a long-term program will. You give up your independence and the the ability to make choices for yourself, regarding everything from the facility you will stay in to the care you will receive while there. For example, the best or closest nursing home facility may not take Medicaid patients, or have a room available when you need it. Program restrictions will only grow over time, given the precarious state of the federal and state budgets that pay for it.
MY KIDS WILL TAKE CARE OF ME This is the sort of thing you might say if you’ve never actually had to change an adult relative’s diapers. Or watched a nearby relative provide most of the care for an elderly family member, leading to the relative’s physical exhaustion, emotional devastation and extreme financial sacrifice from lost wages.
So, if that is your plan, test it out and make sure it works. Show up at your designated child/caregivers home unannounced with your luggage and knock on the door. When someone answers the door go into the living room and sit in their favorite lazy boy recliner and tell then you need to be cared for over the next 30 days. This includes eating, bathing, transportation, assistance getting in and out of bed, etc. Most likely within the first few days both you and your caregiver will realise this plan will not work. If you have family members that think from their hearts and do want to help you any way they can, wouldn’t it be nice if you could have a plan that will pay them for their help?
THE CHILDREN AS FINANCIERS Still other parents assume, without really asking, that their children will pay for their care if the parents run out of money. Or one sibling assumes, without ever discussing it with the others, that the children will split any costs for care equally.
THE COST TODAY In the first half of 2010, individuals buying through an insurance agent or financial adviser paid a $2,180 annual premium for common plans that pay claims that are not taxable for the policy holder. Given the price tag, it’s easy to see why shoppers might have demurred as the economy swooned over the last two years.
If you have no interest in turning your money over to companies who have gotten it so wrong, I salute you. But if the insurance company professionals can blow the projections, you certainly can too. So you had better have a plan, and a backup plan, too, for when your forecasts inevitably go awry.
* MetLife Survey: www.Metlife.com
Mintco Financial has helped thousands of individuals plan for long term care. If you are interested to have more information please fill the contact form or fill the quote form.