As you are planning for retirement, you’ve probably started thinking about where you’ll live and the leisure activities you’ll finally have time to pursue. But have you considered how you’ll pay for the Long Term Care (LTC) services you may need?
According to the U.S. Department of Health & Human Services, 70 percent of people who reach age 65 will need long-term care services at some point in their lives.
The national average cost for a year of nursing home care is approaching $80,000. And that’s just for one person. If both you and a spouse need care, your retirement nest egg could be depleted quickly. Without a plan to pay for Long Term Care services, you could be putting everything you worked a lifetime to accumulate at risk.
How Will you Pay?
When it comes to paying for LTC services, you have several options, including:
The Government – If you plan to rely on government programs, like Medicare and Medicaid, you need to understand that Medicare only provides coverage for a short time – just long enough to help people get back on their feet after an illness or accident. Medicaid is a program for people with limited assets, which means in order to qualify for Medicaid benefits, you may first have to spend down your retirement savings.
Self-Funding – Even if you have sufficient assets to pay for the care you need, there’s a chance those assets won’t be easily accessible when you need them. Liquidating assets – cashing in stocks, selling property or dipping into 401(k) or other savings accounts – can trigger additional costs in the form of capital gains tax, income tax and surrender charges.
Long-Term Care Insurance – An LTCi policy is designed to help pay a portion of LTC expenses. Owning a policy may give you options for care, whether at home or in an assisted living facility or nursing home. It may help prevent you from relying on family members for care. And may be the best way to protect the assets you’ve set aside for retirement. Also, some states, including Texas, have Partnership Programs that allow correctly designed LTC policies to protect even more of your assets should your LTC insurance benefit run out.
SB&K Benefits, LLC can help you design and implement Long Term Care insurance plans to fit your needs and budget. Call us for a consultation at 832-482-2494 or reach us through our contact form on this website.