Planning For The Cost of Care- Blindspot
Long term care insurance can help preserve the qualify of life for you and your loved ones.
Throughout the years, we have seen firsthand in our practice the financial impact that long term care can have on retirement savings. It is an important and sometimes uncomfortable topic to discuss but it is crucial to plan for before retirement.
The truth of the matter is that more than 70% of American who live to age 65 will need some form of long-term care in their lives, according to the U.S Administrating on Aging.1 Most of the time, we see that the ones who step up as caregivers are family members or close friends to help assist with in home personal care.
While informal caregiving could appear to represent savings, there are short-term and long-term costs for the caregiver that call for careful consideration. And not every cost is easily quantifiable. Informal caregivers experience emotional stress, anger, and anxiety, leading to escalated instances of substance abuse and higher mortality rates. Caregivers are twice as likely to say their overall health is poor relative to the general population. 2
There are two main types of long-term care insurance plan, reimbursement plans vs cash indemnity plans. It’s important to plan which one is the best for you in your financial plan. The average cost of assisted living here in Texas is about $3,998 a month, Home Health Care services $4,576 and Nursing Home $7,092, according to Genworth Cost of Care. 3
Whether you are a couple of decades or a few years away from retirement, make sure to have this conversation with your financial advisor to explore your options.
1 “How much care will I need?,” U.S. Administration for Community Living Administration on Aging, 2020.
2 AARP, 2021 Caregiving Out-of-Pocket Costs Study
3 https://www.genworth.com/aging-and-you/finances/cost-of-care.html?23,3
This information does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Claudia Tapara and not necessarily those of Raymond James.
These policies have exclusions and/or limitations. The cost and availability of long-term care insurance depend on factors such as age, health and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of long-term care insurance. Guarantees are based on the claims-paying ability of the insurance company. Long-term care insurance or asset-based long-term care insurance products may not be suitable for all investors. Please consult with a licensed financial professional when considering your insurance options.
