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The Basics of Financing Long-Term Care
Getting older is something that happens to all of us, yet most of us prefer to not think about it too much. Although this impulse is understandable, it is also probably keeping you from addressing some important issues head-on. One of the most crucial is how you intend to afford long-term care when a time comes where you cannot live independently. It is a difficult question to address, but one that could save you considerable worry down the line if you tackle it now.
Planning For Long-Term Care
It’s never too soon to start planning for long-term care and how you will finance it. In order to have a better understanding of what kind of care you will need as you grow older, you will have to assess the likelihood that you may require long-term care. Factors that will affect this include:
- Diet and Exercise – Are you eating well and exercising regularly? People who do not are at a higher risk of heart disease, Type 2 diabetes, joint problems, and respiratory illnesses. This applies even if you are not obese, so do not use your weight as your sole indicator of health.
- Smoking and Drinking – Everyone knows that smoking is a bad habit, but many do not fully understand the risks associated with excessive drinking, which include liver disease, heart disease and several types of cancer.
- Genetics – It’s not all about lifestyle. Your likelihood of developing several illnesses will depend heavily on whether a family member has also suffered from it. Make sure you have a complete family medical history so you know what you are at risk of, and get checked up regularly if you know there is something in particular you should be watching out for.
If there is anything about your lifestyle you can change to improve your health, now is the time to do it. You could make up for years of a sedentary lifestyle with two years of regular exercise, according to Time. Making these changes now will ensure that you can live independently for longer and reduce your need for care when you are older.
You also need to consider how close you are to retirement. The older you are, the more you will have to save in the next few years to leave you in a position where you can afford long-term care. If you start planning when you are still in your 40s or 50s, you will be able to save more slowly and make incremental changes to your lifestyle and budgeting.
How To Pay For Long-Term Care
The costs of long-term care can be intimidating, but they are not impossible to budget for in advance. Indeed, there are several savings and insurance programs that can help you finance it. In terms of savings, it is recommended to set aside $200,000 to $400,000 for long-term care, depending on where you live and how much care you expect you may need. You should start a fund for this now using a savings account that can offer you high-interest rates.
If you have Medicare, don’t assume you’re covered. There are many circumstances under which Medicare doesn’t cover long-term care. That’s because, technically, a lot of long-term care doesn’t count as medical care. If you can afford it, a supplemental Medicare Advantage Plan can help cover expenses like dental care, vision care, and prescriptions, freeing up more cash for your long-term care. Not all plans are available in every state, but several online resources are available to help you determine what is offered where you live.
Instead of relying solely on your health insurance, consider getting long-term care insurance tailored to your future needs. According to Forbes, your mid-50s to 60s is the best time to do this, but the younger you do this, the more money you will save. You can also consider selling your life insurance to free up cash, assuming you no longer feel the beneficiaries require the money as much as they once did.
Being realistic about what your health might look like down the line can be an uncomfortable thought for many. However, ignoring your long-term care is the worst way to deal with this discomfort. Instead, decide how you intend to finance your long-term care. It’s the best way to ensure that you can age comfortably and according to your wishes without placing any financial burden on your loved ones.
June is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.
Thank you June for this wonderful article!
All of us at Only Medicare Solutions.