If you are over 60 (or if you have parents over 60), you owe it to yourself and your family to have a frank discussion about long-term care in a tender way. Why? With people retiring sooner but living longer, the odds are going up of us needing some type of assisted living at some point in our lives. Many people often think of the “worst case” scenario as nursing home costs. But the highest percentage of long-term care takes place outside nursing homes, in places like assisted living communities or adult day care facilities. And these places are not cheap.
Depending on where you (or your parents) live, costs can range from $30,000 to $100,000 a year or higher! For all but the very wealthy, those costs can decimate a lifetime of your hard-earned savings. You are taking your chances if you think the federal government will help. Medicare does not cover long-term care. Medicaid will, but only after you have effectively spent down all of your savings to almost nothing.
Here’s why it’s worth doing something about long-term care now. Let’s say you are married, in your 60s, and have no choice but to be in a nursing home 24 hours a day for the rest of your life. Before all this transpired, your strategy was to go on Medicaid and let the federal government take care of you. Fine. But what about your spouse?
If he or she is in good health, you may wind up spending almost all of your life savings on these nursing home costs. What is your spouse supposed to live on for the remainder of his/her years? Think about your adult children. Will they want to stand by and see you spend down your savings and leave their other parent with no financial support? Probably not. Or look at it from an inheritance standpoint. Do you want to spend your children’s inheritance on a nursing home?
These are questions of family values that you should answer now, not after someone is committed to a long-term care facility. For most of us, long-term care (LTC) insurance will be a critical part of our retirement and estate planning. If you won’t consider it for yourself, think of your spouse or your children (or your parents, if you’re an adult child). Using LTC insurance is one way of handling a difficult situation with a little TLC. Have the talk, sooner rather than later, if you want to maximize your retirement readiness.