A person turning 65 today has a nearly 70% chance of needing some form of long term care during their golden years. Women, on average, will require 3.7 years of care while men, who statistically live shorter lives, will require 2.2 years. In 2020, the cost of long term care in the US averaged between $19,240 and $105,850 annually depending on the service required (i.e. retirement home, nursing home, at-home care, etc.). This means that no matter how you cut it, long term care can deal a crippling financial blow during this phase of life.
Many people contend with the possibility of maybe one day requiring long-term care by leaning into their family networks. Rather than looking to retirement communities or independent living facilities, they look to loved ones to ensure their continued well-being. It is always beautiful to see younger generations support their elders who once supported them and yet this approach can have unintended, damaging consequences.
Often, family members lack the time and knowledge needed to provide adequate care, and the stress of attempting to do so can erode relationships built over a lifetime. What’s more, a caring son or daughter often simply can’t keep up with an aging parent’s needs and so despite their attempts to do so, retirement home or nursing home care frequently becomes the only option. When this happens with no plan in place, the parent’s life savings—and, by extension, their children’s inheritance—quickly disappears. The result is a cascade of tragedies that could easily have been avoided.
Planning for Long Term Care: A How-To Guide
There is no one-size-fits-all when it comes to creating a long term care plan. How you go about determining how to shoulder this potential cost depends on your financial position and current age. This said a common feature of all planning strategies is the need to start as early as possible.
Perhaps the simplest way to build a long term care plan is to fold it into your wider retirement plan. To do this successfully, it is important to speak to an experienced elder law or estate planning attorney. This approach only works if you have sufficient personal income to one day cover the costs, however.
Another option (which can be used in conjunction with the first) is traditional long-term care insurance. A robust insurance plan can be a lifeline when faced with the crippling costs associated with retirement communities or independent living facilities. An insurance plan can be designed to cover these specific costs; however, it is important to seek professional counsel when choosing a plan as premiums can rise over time and derail your broader retirement planning.
A final and frequently misunderstood option is Medicaid planning. Many people are under the impression that Medicaid coverage is only available to those with very limited income and assets and yet this is not true. An experienced estate planning attorney can walk you through strategic asset allocation steps that allow you to qualify for Medicaid should you ever need it. This said, like all of the options described above, this works best when time is on your side.
To learn more about choosing the right retirement home or designing a long-term care plan that you can be sure will one day meet your needs, do not hesitate to reach out to the Deliberato Law Center either by calling us at (216) 341-3413 or using the contact form on our website.
Contact the Estate Planning Attorneys at Deliberato Law Center