I would like to introduce you to my guest blogger, Hazel Bridges, who wrote this thought/planning-provoking article. This article gives you something to mull over and may save you future financial problems. Please visit Hazel's website: agingwellness.org
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Investing in Your Golden Years: How to Plan and Pay for Long-Term Care
Getting older isn’t easy in certain respects, and with some of the physical changes age can bring, a concern for many people is paying for long-term care. Long-term care can be costly, and if you don’t have a plan in place, you leave yourself open to financial risk. Here are some things to consider as you contemplate your future.
At some point down the road, most Americans will require long-term care. In fact, according to some statistics, as many as 12 million Americans are expected to need long-term care by the year 2020, and 68 percent of seniors can anticipate requiring assistance at some point with the most basic functions in life, such as eating and dressing. Depending on your situation, that could mean hiring help to meet your needs.
An Expensive Proposition
Long-term care isn’t cheap. The average cost for just one year in an assisted living facility was $41,000 in 2012, and while Medicare is invaluable for many seniors, it provides little coverage when it comes to assisted living or nursing home care. While many people believe they can depend on Medicare or Medicaid, they must meet requirements to get help paying for long-term care. In fact, many people are required to spend down their assets in order to qualify for coverage, commonly termed a “Medicaid spend down.” With assets capped at $2,000 to qualify for long-term care payout, that leaves most people reducing assets to a poverty level. If you or a loved one needs to live in an assisted-living home or a nursing home, how will you pay for it?
Plan and Prepare
It’s important to develop a realistic picture of how much your assets are worth, and experts at Time suggest that’s the best place to start. For instance, if you are a homeowner your house is probably one of your largest assets. You can use an online home value calculator to give you an idea of its value. That number is part of your overall picture, termed “net worth.” Your net worth is a comparison of your assets, which is all you own outright, against all you owe, your liabilities. You can use a net worth calculator to help tally the number. Those whose net worth comes in at above $2 million can feasibly plan to pay out-of-pocket should the need for long-term care arise. Those whose assets are $2,000 or under can depend on Medicaid. Everyone who falls in the gap between should devise a plan to pay for care.
Weigh the Possibilities
Do you have a close friend or family member you can depend on for care? Some people rely on a spouse, child, or partner for care, but as US News & World Report explains, families are smaller than they used to be, and for many, that isn’t a realistic choice.
Here are some alternative ideas:
Establish a Safety Net
Most of us will require long-term care in our golden years, so it makes sense to establish a plan. Evaluate your circumstances and prepare accordingly. You can face your future with peace of mind by putting a safety net in place.
By Hazel Bridges,
I cared for Mom for seven years and learned so much from my experiences with her and Alzheimer's.