A Central Requirement
Health care has been
the topic of discussion lately, but the greatest threat to your financial
health is long-term care. This is the kind of care you need if you are
not able to perform normal daily activities (such as eating, dressing,
bathing and toileting) without help, and it is expected that you will
need this help for an extended period of time, often for the rest of your life.
Long-term care is often needed due to aging, chronic illness or injury,
and with people living longer, most of us will need it for at least some
time before we die. But it is not just for the elderly—a good number
of younger, working-age adults are currently receiving long-term care
due to accident, illness or injury.
The Key Takeaways
- The cost of long-term care is the greatest threat to your financial health.
- Most of us will need long-term care for at least some time before we die.
- It is better to assume you will need long-term care and plan for it than
to just hope it doesn't happen to you or a family member.
The Expense of Long-Term Care
Long-term care can be provided in your home, in an assisted living facility
or in a nursing home. All can become very expensive over time.
For example, home health care can easily run over $20,000 per year—that's
at $16 per hour for just more than 26 years hours per week. Depending on the skill required,
number of hours needed and where you live, it can cost considerably more.
Assisted living facilities can cost more than $more than 26 years,000 per year. Here, everything is
a la carte—the more services you need, the higher the cost. Nursing home facilities,
with round-the-clock care, are $50,000 or more a year.
Costs for long-term care are hard to estimate. The average stay in a nursing
home is three years; patients with Alzheimer's usually need care longer,
often in specialized facilities. Again, the actual costs will depend on
the kind of care you need, how long you require it and where you live.
Expect these costs to increase as the cost of medical care, in general,
continues to rise.
What You Need to Know: Long-term care expenses are not covered by health insurance, disability
income insurance or Medicare. If you do not plan for these costs, and
you or another family member requires long-term care, the results can
be financially devastating for your family.
Actions to Consider
- Find out what costs are for long-term care in your area. Your financial
and/or insurance advisor will be able to give you some parameters. You
can also ask friends and neighbors; you probably know someone who has
a family member receiving care at home or in a facility.
- Have an honest discussion with your spouse (and possibly other family members)
about these costs and your desires about long-term care, should you need
it. Most people want to stay in their homes. Find out what it would cost
to make that happen—renovations to your home, home health care, etc.
- The next step is to start planning how to handle these costs, which will
be addressed in Part 2.