What is Your Plan for Long Term Care?

You have probably heard the question before, yet you’ve been ignoring it because you think there’s still a lot of time to consider long-term care when you’re older and already retired, right? Think again.

As we find in many areas of planning, putting something off doesn’t, in fact, make it any easier. Quite the opposite, in fact. The best time to consider your plan for long-term care is typically at least 10 (and even as much as 20) years before you retire. The earlier you begin to consider your needs and your alternatives, the better those alternatives (and the lower your overall costs) are likely to be.

You May or May Not Need Insurance – But You Do Need a Plan

The odds that you’ll need some kind of care during your lifetime are very high. According to the federal long-term care insurance program, 40% of all Americans receiving long term care services are working age adults between the ages of 18 and 64.2. Automobile and sporting accidents, disabling events such as strokes, brain tumors and spinal cord injuries, and disabling illnesses such as multiple sclerosis and Parkinson’s disease are examples of injuries and ailments that can afflict anyone at any age.

As people age, however, and as our average life span increases, the chance of needing long-term care also increases. After age 65, an American has more than a 70% chance of needing some form of long-term care. In general, the longer you live, the higher your odds of needing such care.

Most people mistakenly view long-term care as synonymous with nursing home care. The reality is that a person’s care normally progresses through a continuum that may never require confinement in a nursing home. For example, older people experiencing the frailties of aging may first require only a minimal amount of assistance in their home for a few hours each week. If the condition worsens and they experience problems with maintaining their balance, taking medications, or loss of memory, a move to an assisted living community may be the next step on the continuum of care. Unless the condition worsens, or a terminal illness develops, more comprehensive care in a nursing home will probably never be required.

Many people assume that planning for long-term care simply means purchasing long-term care insurance. Yet while long-term care insurance eventually becomes the foundation of many individuals’ and couple’s plans, planning for long-term care – just like other aspects of financial planning – should begin with a consideration of your personal circumstances, needs, and goals.

There Are 7 Steps to Comprehensive Long-Term Care Planning

The most effective way to plan for long-term care is to do so as an integral part of your overall financial and estate planning process. You can think of this process as consisting of seven distinct steps, as follows:

1. Learning about long-term care.
– What it is
– Where care can be received
– How much it costs

2. Analyzing the availability and impact of relying on each of the 4 resources that may be available to you: (1) family, (2) Medicaid/Medical, (3) personal assets, and (4) long-term care insurance.
– How will the need for LTC impact your family and your financial security?
– Do you have sufficient assets to pay for your own care? Do you want to?
– Do you have family members who could care for you? Would you want your family to care for you? Are they truly prepared to commit to the emotional and financial costs of caring for you?

3. Narrowing your choice down to the options that are most appropriate for you.
– After analyzing the available resources, and seriously considering the fact that you may need long-term care in the future, the appropriate options will become more clear.

4. Choosing the option (or combination of options) that is best for you.

5. Developing your written plan.
– Include how you will pay for care, or who specifically will provide your care. If family is part of your plan, they should commit in writing.

6. Finalizing your plan.
– If you believe relying on welfare is appropriate, meet with an attorney who specializes in Medicaid Planning.
– If insurance is part of your plan, meet with an insurance agent who has specialized knowledge of LTC policies.
– Make sure each member of your family receives a copy of your plan.

7. Reviewing your plan periodically.
– This is to ensure that your plan will still accomplish the objectives it was designed to achieve
– Compare the current cost of care with your inflation-adjusted benefits
– If insurance plays a part in your plan, review your coverage periodically to be sure that it is appropriate and adequate

What Will Long-Term Care Cost?

We don’t know for sure. We do know, however, that the costs are frequently higher than people estimate or that they are prepared to pay for from their own resources. This is particularly true if we look at the cost of care over an extended period of time.

Many people believe that the cost of long-term care may be the single greatest threat to the financial security of most Americans. We insure our cars against theft or damage, our houses against flood, fire, and earthquakes, and our families against the risks of an early death. Yet few of us have insured our assets against the possibility of debilitating and costly illness – or simply against the very real possibility that we will live through a prolonged period in which we need help to live with dignity.

So while it may be uncomfortable to consider our options for long-term care, the alternative is choosing options by default that expose our families to very substantial financial and emotional risks.

Reduce the Odds You’ll Need Long-Term Care

Is there any way to reduce the odds of needing long-term care? Yes. The key to reducing the odds of needing long-term care is taking a proactive approach toward life. The following have been proven to increase your chances for living a long, healthy life and simultaneously reducing the odds of needing long-term care:

  • Staying Active Physically: Even a minimum level of daily physical activity makes a significant difference.
  • Socializing: Spend as much time as possible with family and friends. Get involved in activities that include others.
  • Eating with others: Research has shown that having meals with other people offers multiple benefits. For example, people who eat together are more likely to eat more nutritious meals, which can help avoid both mental and physical problems. Eating together also offers the opportunity to socialize.
  • Continuously learning: Challenge your mind daily. Working crossword puzzles, reading, and stretching your imagination will contribute to a healthier state of mind, potentially reducing the odds of needing long-term care due to mental problems, including loss of memory.

We look forward to discussing your long-term care plan in the near future.

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