November is Long-Term Care Awareness month, so I thought we should address this topic.
The reality is that most of us will need some kind of help as we age. Nearly 70 percent of Americans who reach age 65 will someday require help from others to get through their day. On average women will need help for 3.7 years, and men for 2.2 years, according to AARP.
So, since most all of us will need some help, most all of us should think about how we wish to handle that need. Here are the four most common ways that people get the care they need:
Count on Family. This is a very common solution. AARP estimates that 53 million Americans of all ages devote a portion of their day to feeding, driving, cleaning, paying bills, and making sure the medicine gets taken by a loved one not able to do these tasks on their own.
Pay Cash. Some families have the financial resources to pay cash for the help they need.
Rely on State Aid. In most cases, the state will provide care for people without financial means through state programs like Medicaid.
Use Insurance. A long-term care insurance product can provide money to pay for at least some of your care needs.
As you begin to think about your situation, it’s good to consider a few questions:
What’s it likely going to cost? Of course, it depends, but current estimates show it’s easy for long-term care expenses to reach $1 million dollars. This projection assumes:
- You are 62 now.
- You need care around age 82.
- You need care for about 3 years, in a facility like a nursing home.
- Current annual cost for a nursing home is about $13,000 a month.
- Recently costs have increased at an annual rate of 4.5%.
What Else Should I do? There are some simple best practices you should take now, regardless of your plans for older age care.
- Update your estate documents.
- Healthcare directive to describe your wishes for the sort of care you receive.
- Power of attorney for healthcare to identify the people you trust to make health-related decisions if you are not able to do so.
- Financial power of attorney to identify the people you trust to make financial decisions if you are not able to do so.
- Last will and testament to spell out your wishes for after your death.
- Talk with your loved ones about your wishes and priorities.
- Explore care options in your area.
- Talk with local resources like your parish nurse, or a social worker.
- Visit facilities in your area to understand care options and costs.
You may find that you would like some advice from a highly trained, experienced CERTIFIED FINANCIAL PLANNER™ professional. A CFP® professional can act as your advocate and advise you on the most prudent options for you. And at the least, they can be sure you are asking the right questions as you sort out your options.
Yes, I am a CFP® professional. I’m always a fiduciary and I work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.
If you would like to talk with me about your situation, I would love to help you. Just follow this LINK to find a time that works for you.
If this article has you thinking about your own circumstances, contact my office at firstname.lastname@example.org. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.