To be fair, “long-term care” isn’t always as bad as it sounds. It’s a blanket term that covers many different types of care. Yes, nursing homes are one of those types, but they are not the only option. Assisted living facilities, adult day care, continued care retirement communities, and in-home care all fall under the long-term care umbrella. Knowing your options and planning for how you will pay for them ensures you get the kind of care you want and deserve.
As mentioned above, the majority of seniors will need some type of long-term care. However, much of that care is actually non-medical. Rather, it helps with daily tasks such as bathing and meal preparation. With that in mind, consider in-home care as an option. If you live in a home with accessibility features that allow you to age-in-place, an in-home caregiver can be much more cost efficient. If your home is not accessible, consider downsizing to a place in your area that is more manageable. Depending on how much you sell your old house for and the cost of your new place, you may be able to net your profit and use that to pay for your long-term care needs. If not, consider these other payment options.
Paying for Long-Term Care
Long-term care is a huge expense. Depending on the type and amount of care you receive, it can cost anywhere from $20 to $260 a day. The younger you are when you start planning for your long-term care needs, obviously, the more time you have to save for the expense. But it’s not just about time vs. money– the earlier you begin planning, the more options you have as well.
Long-Term Care Insurance
Long-term care insurance covers all costs associated with your long-term medical needs, but plans come with high premiums. The younger you are when you start paying for long-term care insurance, the more affordable it will be. Note that you cannot buy a policy if you’ve been diagnosed with an illness such as Alzheimer’s disease that will eventually necessitate long-term care
A reverse mortgage allows you to borrow against the property you own for cash you can use today. Note that this is only a good option for people who already own their homes or are very close to doing so. When you pass, your family can either sell the property to pay off the loan or pay it off themselves if they want to keep the house.
Health Savings Account
A health savings account (HSA) is a tax-free savings option for people who have high-deductible health insurance policies. The amount you can deposit into your HSA depends on the year and whether or not you’re depositing as an individual or family. You can withdraw HSA funds to pay for any qualified medical expenses, including those associated with senior and long-term care.
The more you plan for your long-term care needs, the more options you have when the time actually comes. If you want to age-in-place and receive in-home care, prepare yourself by either adding accessibility features to your home or downsizing to a place that’s more manageable. If you want to plan for other types of care, you’ll need a financing plan, such as long-term care insurance, a reverse mortgage, or savings through your HSA.
Crafting a Plan for Your Long-Term Care Needs — With Seniors In Mind is written by Jane Rohde for www.withseniorsinmind.org