Long-term care encompasses a broad and complex spectrum of medical and social services for frail and elderly Americans, or persons with disabilities. These services range from routine assistance with daily living (e.g., bathing, eating, and mobility) to a variety of home health and community-based services and nursing homes.
Planning for the possibility of long-term care gives you time to learn about services in your community and what they cost. It also allows you to make important decisions while you are still able to do so. The average person who is now 10 years from retirement will spend an estimated $463,849 on healthcare during their retirement.
Forecasts say 70% of retirees will require long-term care in their lifetimes, and the costs of extended stays in assisted living facilities and nursing homes can run into the hundreds of thousands of dollars. Paying for long-term care depends on an individual’s financial situation and the kinds of services they use. Often, they rely on a variety of payment sources, including:
– Personal funds including pensions, savings, and income from stocks
– Government health insurance programs, such as Medicare and Medicaid
– Private financing options, such as long-term care insurance
– Veterans’ benefits
– Services through the Older Americans Act
Since traditional health insurance will generally not pay for long-term care, it is important to start the financial planning now. Assisted living and nursing homes cost an average $43,539 and $82,125 per year, respectively. Long-term care insurance is available, and while plans can cost thousands of dollars annually, securing a plan in your 50s will be cheaper than trying to get coverage after you retire.
Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life.
The duration and level of long-term care will vary from person to person and often change over time. Here are some statistics that should be considered:
– Someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years
– Women need care longer (3.7 years) than men (2.2 years)
– One-third of today’s 65 year-olds may never need long-term care support, but 20 percent will need it for longer than 5 years
– Every year, almost 10 million people need some form of long-term care in the United States. Of this population, 3.6 million (37%) are under age 65 and 6 million (63%) are over age 65
– For a couple turning 65, there is a 70% chance that one of them will need long-term care
The best time to think about long-term care is before you need it. Long-term care can be expensive, and with an estimated 70% of retirees requiring it, the earlier you start planning for it, the more manageable it will be.