People are living longer and while they value the idea of living a long and fulfilling life, they must also acknowledge the possibility of facing additional challenges as they age.
Recent research now suggests that almost 70 percent of Americans turning age 65 will need long-term care services at some point in their lives.
As they diligently plan and save for retirement, it is also important to understand how living longer can impact their health, income, and quality of life.
Long-term care planning can begin at any age and can be issued up to 85 years old.
By planning ahead, they can help offset healthcare expenditure risks in later years of life and help preserve their retirement portfolio, legacy planning, and charitable giving plans.
According to a 2019 Genworth study, the median national cost for care in an assisted living community was $48,612, while a private room in a full-time skilled nursing care facility cost an average of $280 per day – over $100,000 a year.
If they combine the cost of two spouses living in different housing situations for multiple years, it’s easy to see that housing expenses alone would be quite expensive.
Having a plan in place can be extremely beneficial because Medicare and most insurance plans, including Medigap policies, do not pay for long-term care. Their coverage is limited to acute care that is associated with a short-term illness or injury.
Today there are many options to plan for long term care.
One strategy that we often used with our clients is an asset based long term care policy. These policies use the structure of either life insurance or annuities to provide long-term care benefits as they are needed. A policy can either be purchased as a lump sum or over several years, and can even be funded by an inefficient existing annuity or life insurance policy that has accumulated cash value.
With an asset-based long-term care policy, the initial premium will grow tax deferred until they need to access the long-term care benefit. Withdrawals that are made for long-term care purposes will also come out tax-free. If they do not utilize the benefit or only a portion of their investment, a death benefit will be paid to their heirs.
The benefit need will vary by person, and some policies can offer a defined benefit period while others can even offer lifetime benefits. By purchasing a long-term care policy, they also have the option of staying in their home as asset-based insurance policies will also help with home health expenses – not just an assisted living facility or skilled nursing home.
Creating their own long-term care plan lets them make their own choices while they still can, and allows them to take the burden off their loved ones.
Struble and Company at Raymond James can help, develop a long-term care contingency funding plan tailored to each individual and their needs as a part of their financial life plan.
If you are ready to start your long-term care plan, please give us a call at 931-410-3030 to set an appointment or stopping by their office located at 2540 Madison St, Suite C, Clarksville, TN 37043.