Retirement Planning and Long-Term Care

Retirement planning requires a lot of educated guessing in terms of how long you’ll live and at what age you’ll stop working. In general, people can expect to live at least 20 years post-retirement at age 65. Lifestyle, family history, and overall health are factors to consider.

Long-Term Care Costs

What hasn’t been factored in until recently, is the cost of any long-term care that might be needed. This is a much harder item to pin down. However, one recent study suggests that ¼ of Americans will need long-term care for at least three years. 

A study done by the Center for Retirement Research at Boston College suggests that about ⅕ of 65-year-olds will not require any long-term care before they die, and about the same number will need only minimal care. About ¼ will need significant long-term care. The majority (38%) land in the middle and require some degree of care for one to three years.

If you’re healthy into your late 60s and married, your chances of needing long-term care decrease, according to CNBC.

An elderly man walking with a walker and a nurse holding onto his arm to help him.
Monthly Expenses Are Listed in Notebook Next to Pen and Calculator

Cost Considerations

Unfortunately, Medicare doesn’t typically cover the costs associated with long-term care. If you think you’re likely to need care, it can get pricey. Data from Genworth, as reported by CNBC, suggests the following monthly costs:

  • $4,300 for care at an assisted-living facility ($51,600/year)
  • $7,756 for a semi-private room in a nursing home ($93,072/year)
  • $4,576 for a home health aide ($54,912/year)
  • $4,481 for homemaker services ($53,772/year)

Reading for All Ages with Book Recommendations

Planning for the Future

Funding for these care needs can be planned for in a couple of ways. First, you can buy long-term care insurance. Expect to pay between $2,600 to $8,750 for these types of policies. Some life insurance policies also combine long-term care insurance. Those costs depend on the metrics used to calculate your life insurance rates, so speak with your insurance agent.

You can also rely on your own assets for any long-term care costs. These could include your retirement funds and selling stocks, but always talk to a professional! The most important thing to remember while working with your long-term care insurance agent, broker, or financial planner is to ask questions.

Have you factored long-term care costs into your retirement planning?

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Legal, Accounting & Tax advice disclaimer- True Assisting does not provide legal, accounting, or tax advice. The information offered is for general informational and educational purposes only and is not a substitute for professional advice.

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