Maybe you’ve heard of long term care insurance but haven’t had time to research exactly what it is. Perhaps you think it’s a benefit you get through work. Or your plate is full and you figure it’s one of those things you can put off until you’re closer to retirement. But planning for long term care needs is just like planning for retirement. You can start early and achieve your goals. Or, you can fail to plan, cross your fingers, and hope for the best.
• Modifications to your residence (such as wheelchair ramps or grab bars)
• Ongoing care by moving to assisted living, senior housing or a nursing home (Monthly rent can be more costly than maintaining your house – nursing home care can run over $10,000/month)
• Requiring more medical intervention (such as help managing medications, physical therapy, more frequent hospitalization, surgery, medicines)
• Requiring home care services to allow one to remain at home (such as assistance with bathing, toileting or home tasks. These costs vary depending on the amount of care needed)
Sometimes we don’t even think about how we will budget for such needs. As they come up, we figure out how we will pay for them. In fact, there are several ways to pay for these items:
1. Your own accumulated assets, such as savings and investments
2. Reverse mortgage (It’s possible to borrow up to 60% of the equity in your house. No repayment need be made; rather, payoff occurs upon death or sale of the property. The rules around these are complex and specific.)
3. Health care spending accounts
4. Long term care insurance
All of these methods require advance planning and investment. To pay for long term care through your own accumulated assets, you need to have been saving.