By the time you turn 40, you should have resources dedicated to your future retirement. Planning for a successful future retirement takes some effort. You have to use the employer’s 401 (k) option. If the employer does not offer a 401 (k), 403 (b), or specific retirement program, you should make an effort to save money in the IRA. If you are self-employed, you must start with a SEP account. However, planning doesn’t end with saving money.
What happens when your health changes due to a long illness, accident, or just the effect of aging? As you get older, these health risks increase dramatically. Will Your Retirement Plan Survive?
Retirement planning for long-term care has become a top priority for a large number of Generation X and Baby Boomers. Many people aged 40 to 70 have personally dealt with the impact of long-term health care with a parent or loved one.
The problem is that many people forget to protect these pension funds from the prohibitive costs of long-term care. The costs and financial burdens that accompany aging will affect you, your family, your savings, and your lifestyle.
According to the U.S. Department of Health and Human Services, if you turn 65, you have a 70 percent chance of needing some type of extended care service in your life. Caregiving is very difficult for your family. Depending on your children to be caregivers is not a good plan. They have, or will have, their jobs, families, and responsibilities. It’s not that they don’t like you but having a son or daughter, or having a son-in-law as a caregiver, is stressful. It can also affect their health and jobs.
Also, spouses are not a good choice for caregiving. As you get older they will. They will also have health and age issues to deal with.
Paid care drains your assets and negatively impacts your income and lifestyle. The cost of long-term care and support services continues to increase. Even a large nest egg can be affected.
The current national average cost of home care, based on 44 hours per week, is $ 4,195 per month. Costs for basic living facilities start at $ 4,000 a month before you start adding services to that bill. The average skilled care home care is $ 8,365 a month – more than $ 100,000 a year. The cost of long-term care services increases over time.
Many people wrongly assume Medicare will pay for any long-term care needs in the future. Health insurance, Medicare, and supplements pay for only a limited amount of skilled services – and only if you get better. These insurance options do not cover the costs of daycare services, which aid in activities of daily living. However, most people need care services as they get older.
While most long-term care occurs as we get older, people of all ages require extended care. Early dementia, including Alzheimer’s disease, which is the most well-known form of dementia, can occur even in your 30s. Parkinson’s disease, multiple sclerosis, and even strokes occur at a younger age. It is your good health today that gives you the opportunity to plan for the future.
Medicaid, Medicare program, can pay for long-term care but you have to be poor or you end up poor. For most people, this is something you want to avoid.
The truth is, the financial costs and burdens of aging will affect your savings and your family. Affordable long-term care insurance protects your assets and eases the burden on your family.
Although some believe long-term care insurance is expensive, it is actually very affordable for most people, especially if you plan before retirement.
If you are fairly healthy, these policies can easily fit most people’s budgets. The problem is that many people seek help from a financial advisor or general insurance agent who has little knowledge in this area. Often they give recommendations too great or sometimes too little. Additionally, many of these professionals only work with one or two insurance companies. Since they do not have a good understanding of how to use the policies at the time of the claim, their recommendations do not align with what you may actually need.
In addition, 45 states offer long-term care partnership policies that provide additional protection for dollar-to-dollar assets.
There are several types of policies available in most states. These include conventional plans, partnership plans that provide additional protection for assets, single-premium “hybrid” plans, which also offer death benefits, and short-term plans that provide healthier qualifications and broader ages.
The key is working with a long-term care insurance professional who works with major insurance companies. I always ask many detailed questions so that I can design a suitable plan based on the client’s interests and budget.
The cost of long-term care services varies from site to site. Most claims for care start at home and many people avoid nursing homes altogether because they get proper attention at home or in an assisted living facility. These costs are much lower than for skilled services in a nursing home.
Long-term care insurance will pay benefits either at home, adult day care centers, assisted living facilities, memory care, and in skilled traditional aged care homes. With most policies, you and your family must decide how to use your benefits.
Does long-term care insurance work? at all. In 2018, major insurers paid more than $ 10.3 billion in benefits to American families. Otherwise, these families would have had to deplete their assets to pay for care, make family members the caregivers, or both.
Since the policies are tailored, you need to decide what is important to you. The key is planning before retirement. Long-term care insurance isn’t that exciting. It does not shine like a new car or a new piece of jewelry. Your policy may not show up at a party. However, it will give you and your family peace of mind.
Working with a long-term care professional will allow you to get the exact information you are looking for. Start your search in your 40s and 50s when you have the most affordable options.
The truth is that long-term care insurance is easy, affordable, stable in income and asset protection.