According to the U.S. Department of Health and Human Services, 70% of people turning 65 can expect to use some form of long-term care during their lives. But less than one-third of Americans who are 50 or older have begun saving for long-term care.
Long-term care includes a range of personal daily living services. Most long-term care isn’t related to medical care, but rather assistance with daily bathing, dressing, using the toilet or eating. Other types of long-term support include help with housework, managing money, taking medication and shopping.
Many Americans mistakenly believe that Medicare pays for the bulk of long-term care. In fact, Medicare only pays for long-term care if you require skilled services or rehabilitative services, and it will only do so in a nursing home for a maximum of 100 days (the average is 22 days), or at home for a much shorter period.
Long-term care insurance can be expensive, but not having it may endanger your retirement and other savings.
Here are some tips to consider before you buy:
Don’t buy more insurance than you think you may need, or too little. You may have enough income to cover the bulk of your costs and so may only need a small policy to cover the remainder. Family members also may be willing and able to provide support. It is also far more difficult to increase coverage than decrease coverage, especially if your health has deteriorated.
It costs less to buy coverage when you are young. The average age of people buying long-term care insurance is about 60, but it’s significantly less expensive if you buy it in your late 40s or early 50s.
Research and consider different options, and talk with a financial advisor before finalizing your decision.
For more information about the basics of long-term care, its costs, and guidelines to help you make a decision, please contact us.
Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. LPL Financial and its advisors are providing educational services only and are not able to provide participants with investment advice specific to their particular needs. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own, separate from this education material.
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For more information or any questions regarding this topic, contact certified financial planner Dustin Rinaldi or call (239) 444-6111.