Long-term care is a concern for most of us, especially retirees or those approaching retirement, although it is often overlooked in one’s financial plan for a number of reasons. You may think, “I can’t afford coverage.” “ I have plenty of capital to fund the costs myself.” “I’m too young.” “I’m too old.” Or, perhaps you hope your family will be able and willing to adequately take care of you.
At 5C, we believe long-term care expenses are a key risk to your retirement plan and should be considered in your financial planning process. We’re here to help you understand your risks and to provide options based on your needs and goals.
What Is Long-term Care?
Long-term care is a wide range of services that generally fall into two categories, skilled care and personal care. Skilled care is provided when recovering from illness or injury. Personal care aids with activities of daily living (ADLs) such bathing, grooming, dressing, eating, shopping, and meal preparation. Since ADLs do not require a physician, physicians assistant, or nurse, these expenses will not be covered by traditional health insurance.
Why Consider Long-term Care in Your Financial Plan?
The older you become, the greater the chance you will require long-term care. Paying long-term care costs from your accumulated assets raises the possibility that you could outlive your resources, cut corners on care, making you susceptible to receiving inadequate quality of care, and/or significantly reducing inheritance left to heirs and charities. Reducing risks associated with long-term care can help you rest assured of your financial and even your physical and emotional well-being.
Reducing Financial Risk, Protecting Your Assets
Medicare, generally, will not pay for long-term care services. Medicaid pays only for certain health services and nursing home care for people with low incomes and limited assets. To qualify for Medicaid, you will likely have to spend down your assets to very low levels (eligibility requirements vary by state).
At 5C, our customized client solutions are aimed at helping you preserve your assets for other purposes and to provide access to care options otherwise unavailable due to cost constraints. Specifically, we look at long-term care insurance and hybrid solutions that can include long-term care insurance, annuities, and life insurance. Most long-term care policies offer options to cover multiple care contingencies and may even cover contingencies such as inflation.
Ultimately, the final cost of long-term care will depend on many factors. We would like to have a conversation with you regarding the potential impact of long-term care expenses on your financial plan. The possibility of declination of coverage can go up dramatically as you age and the premium will increase as well, so there’s no better time than now to talk with us about long-term care.
Our counseling process provides guidance regarding appropriate options to suit both your needs and those of your family.