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Long-Term Care: Plan Before It’s Too Late

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Planning for long-term care while you’re young and healthy opens up many more options than you’ll have if you wait.

You should start thinking about your own long-term care when you’re in your 50s and 60s. By the time you’re 70, some options could be gone. With the national median annual cost of a private room in a nursing facility coming in at more than $100,000, not having a plan can become one of the most expensive mistakes of your financial life. The article “Four steps you can take to safeguard your retirement savings from this risk” from CNBC says that even if care is provided in your own home, the annual median national cost of in-home skilled nursing is $87.50 per visit.

There are fewer and fewer insurance companies that offer long-term care insurance policies, and, even with a policy, there are many out-of-pocket costs. However, there are options to traditional long-term care-only policies you should consider, such as life insurance and annuities with long term care benefits.

People also often fail to prepare for the indirect cost of caregiving, which primarily impacts working women who are taking care of older, infirm male spouses and aging parents. More than 34 million Americans provided unpaid care to older adults in 2015, with an economic value of $522 billion per year.

There’s also the stress of caring for loved ones, watching them decline, and needing increasingly more help from other sources.

The best time to start planning for long-term care is around age 60. By that time, most people have experienced their parent’s aging and understand the planning and conversations with loved ones that need to happen.

Living Transitions. Do you want to remain at home as long as is practicable, or would you rather move to a continuing care retirement community? If you’re planning on aging in place in your home, what changes will need to be made to your home to ensure that you can live there safely? How will you protect yourself from loneliness if you plan on staying at home?

Driving Transitions. Knowing when to turn in your car keys is a big issue for seniors. How will you get around if and when you’re no longer able to drive safely? What transportation alternatives are available in your community?

Financial Caretaking. Cognitive decline can start as early as your 50s, leading people to make mistakes that cost them dearly. Forgetting to pay bills, paying some bills twice, or forgetting about some accounts, are signs that you may need some help with your financial affairs. Consider simplifying things by having one checking account, one savings account, and three credit cards: one for public use, one for automatic bill-paying, and a third for online purchases.

Healthcare Transitions. If you don’t already have an advance directive, you need to have one created as part of your overall estate plan. This allows you to state, in writing, how you want to receive care if you’re not able to communicate your wishes. Not having this document may mean that you’re kept alive by “heroic” or extraordinary means (machines) when you’d prefer to die naturally. You’ll also need a Health Care Power of Attorney/Designation of Health Care Surrogate so you can authorize a person to make medical decisions on your behalf when you cannot. This person doesn’t have to be a spouse or an adult child—sometimes it’s best to have a trusted friend who will follow your directions. Make sure this person is willing to serve, even if your documented wishes may be challenged.

Reference: CNBC (Jan. 31, 2020) “Four steps you can take to safeguard your retirement savings from this risk”

Other articles you may find interesting:

Simple Safety Tips for Seniors

Will my Illinois Will Work When I Move to Florida?

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