Most of us understand we are supposed to save for our retirement but many still make the mistake of underestimating the cost of long term healthcare should we develop a serious medical condition or be unable to live independently. While the estimates for both in-home and assisted-living care can be staggering, some basic planning for the future can go a long way towards reducing the financial burden of living comfortably while receiving the vital medical care you need in your later years.
According to recent estimates, living in an assisted living facility can cost more than $43,000 per year and living in a nursing home can cost more than $83,000 or even $92,000 for a private room. The financial answer for some can be purchasing long-term care insurance to help offset the enormous cost of years of long term care at an assisted living facility.
For people living in their 50’s, the time to save for healthcare costs is right now. While yearly premiums can cost as much as $3,400 for a married couple, those premiums will seem like a drop in the bucket compared to the tens of thousands of dollars in out of pocket costs seniors who do not qualify for Medicaid funded nursing home and assisted living facility care.
Although most Americans believe these types of policies apply mostly to paying for nursing home care, a type of place many would rather not live in, these types of benefits may also be used for in-home nursing aids. According to the American Association for Long-Term Care Insurance, over half of adults younger than 60 can qualify for for health-based discounts less than half of Americans over 60-years old can. The number of people 70 to 79-years old who may qualify for discounts plunges down to 24% so the longer folks wait the less chance they may have to qualify.
In addition to considering purchasing long term healthcare insurance, folks need to plan for their retirements by saving in an IRA or a 401(k) and help offset any types of serious healthcare costs that may come up. While many Americans assume social welfare programs like Social Security and Medicaid will pay for nursing home and in-home care, the truth is that Social Security often only helps cover basic costs of living and spending down to qualify for Medicaid is a less than desirable retirement plan.