You Haven’t Made a Long-Term Care Plan

Without a carefully drafted long-term care plan, your retirement money will quickly go down the drain. If you think you won’t need long-term care, the Department of Health and Human Services agrees to disagree. According to their data, more than half of adults aged 65 today will require long-term care and about one in seven will need care for more than five years.

More than that, if you will live in an assisted facility or nursing home, expect to pay serious money for the received care and treatment (if any). Currently, around 1.2 million individuals live in the nearly 30,000 assisted living facilities in the U. S. and have to pay an average annual cost of $48,612 according to the Genworth Cost of Care Survey. For a private room in a nursing home, the cost exceeds $102,000 a year.

“Even the wealthiest people are at risk if they have a lot of long-term care expenses,” said Dave Littell, professor of taxation at The American College.

What To Do

Fortunately, there are certain ways to prepare yourself, moneywise, for long-term care. According to professor Littell, you could get a long-term care insurance policy or hybrid life insurance policy to cover your costs in case you’ll need long-term care. You could also get a longevity annuity that provides protection against outliving your money later in life.

This type of insurance requires a lump-sum investment and will provide long-term fixed income in retirement. The only downside is that you need to wait several years or until you reach a certain age to start receiving your payout. Consequently, “you can’t time it exactly with a long-term care need,” Littell warns. To start things off on the right foot, ask for the advice of a financial planner who specializes in long-term care planning.