Protecting Your Future
Nobody wants to think of the idea of spending his or her sunset years in a nursing home. Nevertheless it is definitely something we need to think about. Care in an assisted-living facility or even in your own home can be extremely expensive. Without careful planning, you may exhaust your hard earned retirement savings trying to pay the bills. If you’re one of the millions of baby boomers preparing for retirement, looking intolong term care (LTC) insurance should be near the top of the planning “to do” list.
Living Longer
According to recent data, a person age 65 has an approximately 50% chance of living beyond age 85 for males, age 88 for females and for couples at least one spouse may live to age 92. According to a study by the U.S. Department of Health and Human Services, people who reach age 65 will likely have a 40 percent chance of entering a nursing home. With the population generally living longer, the need for LTC and protection from the burden of its high costs is a distinct possibility in the future.
What is LTC?
LTC is a variety of services, including medical and non-medical care to people who have a chronic illness or disability. LTC is frequently associated with the elderly, but accidents and illness can put even children in the position of needing care.
What are the Costs of LTC?
The 2009 national daily average room rate in a nursing home facility ranges from $198 to $219 (semi-private to private room), or $72,270 to $79,935 annually. With this risk left unmanaged, prolonged care may exhaust a large portion of one’s life savings. That’s why it is important to consider incorporating LTC options into your long term financial plan.
Medicare
Generally, Medicare does not pay for long-term care expenses. Medicare pays only for medically necessary skilled nursing facility or home care for a limited number of days.
Medicaid Assistance
Medicaid is a state-administered health insurance program that helps many people who otherwise cannot afford to pay for medical care. To qualify for LTC coverage under the Medicaid program, individuals must meet strict financial and functional eligibility requirements.
LTC Insurance
Many major insurance companies in the private sector also offer LTC insurance. While these plans require policy owners to pay upfront or ongoing premiums, they often provide more flexible eligibility and coverage options and benefit payment terms. The greater flexibility can, in turn, help policy owners better protect their life and retirement savings from the ravages of high LTC costs.
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CUSO Financial Services, L.P. (CFS) does not provide tax or legal advice. For such guidance, please consult your tax and/or legal advisor.
*Investments offered through CUSO Financial Services, L.P. (CFS), an independent broker-dealer and SEC registered investment advisor, are not NCUA/NCUSIF insured, are not credit union guaranteed and may lose value. American First Credit Union is affiliated with CFS. Investment advisors and employees of and registered through CFS. (Member FINRA/SIPC)
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Sources: http://www.longtermcare.gov/LTC/Main_Site/index.aspx; www.medicare.gov; The MetLife Market Survey of Nursing Home & Assisted Living Costs, October 2008.
