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Projecting Your Long-Term Care Needs

An Objective Assessment: Projecting Your Long-Term Care Needs

There are more options for long-term care today than ever. However, as your care options have increased, so have the costs associated with it. According to the 2016 Genworth Cost of Care Study published in Forbes magazine, the national annual median cost of a private nursing home room has climbed to more than $92,000, a 1.2 percent increase over a year ago. The annual average cost of an in-home health aide is approximately $46,000 and $43,000 for assisted living services. These costs are in line with other long-term care categories, each one of which has gone up in cost over the past several years. It’s a worrisome trend for many Americans, particularly those approaching retirement. Planning and learning how to fund long-term care are absolute necessities given the harsh reality of spiraling costs. If you’re wondering how to get started planning and paying for long-term care, here’s a guide to help you on your way.


As you approach retirement, consider what lifestyle and historical factors might indicate that you or a loved one will require long-term care. Are there genetic risk factors at play? If you’re overweight, don’t eat a healthy diet, and live a sedentary lifestyle, you are at risk for an array of health issues, which you can avoid by following your doctor’s advice. Purchasing home exercise equipment and acquiring a gym membership are also positive moves that may reduce the chances that you will need long-term care. It’s imperative that you assess your situation and other factors objectively to develop an accurate picture of your health and likely future health outcomes.



When it comes to long-term care, a good rule of thumb is to begin preparing for the cost sooner rather than later. It’s important to remember that medical costs tend to increase as people age, and while Medicare is there for people age 65 and older, there are many aspects of long-term care that Medicare does not cover. That’s why it’s essential to research and understand your payment options so those coverage gaps don’t overwhelm you. Medicare Advantage offers supplemental coverage that can help pay for costs like prescription medications and dental care. However, beware that the “availability of Medicare Advantage plans in your area will vary and is subject to how many insurance companies offer plans where you live.”



In the absence of Medicare, it’s important to understand all available funding options for long-term care. Fortunately, there are quite a few. For example, a cash-value life insurance policy can be sold to a third party for cash if you need help paying for care expenses and are age 65 and older and have a policy with a face value of at least $50,000. If you’re in your 50s, it may be time to investigate taking out a long-term care policy. Bear in mind, however, that long-term care insurance can be quite expensive, especially if you wait until you’re in your 60s. Though many financial advisers recommend buying a policy in your 50s, there’s nothing to prevent you from doing so earlier, which can save you thousands of dollars in the long term.


Additional Options

If you’re a homeowner, consider getting a reverse mortgage, which uses the equity in your home to provide regular payments that can be used to defray care expenses. You can remain in your home even if the value of your property is less than your debt level. If you’re a veteran, you may have access to care benefits through the Veterans Administration. The VA’s home- and community-based services enable chronically ill or disabled veterans to remain at home and allow you to receive more than one service at once. The rising costs of long-term care may prove prohibitive for many Americans, especially those who fail to investigate their options or assess their potential care needs. According to the US Department of Health and Human Services, 70 percent of Americans turning 65 will need some form of long-term care, and 20 percent will need it for more than five years. Those are startling numbers and they keep going up, a trend that should be taken seriously by all Americans.


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