By Antonio Porretta
We all take risks now and then: driving above the speed limit, jaywalking, making a grocery run without wearing a seatbelt…the list could go on and on. But there are certain things you don’t want to take risks with: your retirement savings, how you raise your kids, or your health. However, if you’ve neglected to put a long-term care plan in place, you are actually taking a giant risk.
You might be saying, “Do I really need long-term care insurance? The hefty premiums just don’t seem worth it.” For some, the thought of sky-high bills and burdened family members is enough to motivate them to invest in some sort of long-term care insurance. Regardless of which camp you’re in, here are 5 things you should know about long-term care (and the impact it could have on your nest egg later in life) that might surprise you.
1. Most Of Us Will Need Long-Term Care At Some Point
More than half of people turning 65 today will need long-term care in their remaining years. While the average person will require help for one to three years, (1) it is estimated that 14% will need care for 5+ years. Regardless of present health or circumstance, eventually most people will need some form of long-term care during their lifetime.
2. Medicare Typically Doesn’t Pay For Long-Term Care
It may shock you to know that Medicare doesn’t cover typical long-term care expenses. Medicare is medical insurance. It covers acute care expenses like doctors’ visits, prescription drugs, hospital stays, and short stays in a skilled nursing facility in special circumstances. Medicare will not cover basic long-term care needs or facility costs. Basics such as assistance with daily personal care needs like bathing, feeding, getting dressed, and supervising (2) are not covered by Medicare.
3. It’s Challenging To Pay For Rising Long-Term Care Expenses Without Insurance
Long-term care costs are expensive. The average national monthly cost for an in-home health aide is $4,385, assisted living facilities cost $4,051 a month on average, while a private room in a skilled care facility will cost you around $8,517. (3) With costs this high, it’s no wonder that long-term care expenses often result in financial plan failures, even for those with resources. Over 32% of households with a $1 million net worth (4) were materially impacted by long-term care costs.
4. Long-Term Care Insurance Covers More Than You Think
Many people think long-term care insurance is only for traditional nursing homes or skilled care facilities. Most policies today cover much more. Home health aides, assisted living facilities, and retirement communities are often covered with today’s long-term care plans. Some plans include coverage for professional help should you need assistance with eating, showering, getting dressed, and using the bathroom.
5. Women Need Long-Term Care Insurance More Than Men
Women can expect to have higher long-term care costs than men simply because they tend to live longer. When a husband is sick, for example, the wife often steps up to care for him until his passing. When the wife finds herself in the same situation years later, she typically doesn’t have a spouse to offer the same care. As a result, this burden falls on children or extended family members. Long-term care insurance can provide the resources needed to prevent being a burden and allow you to choose how, when, and where you receive care.
We’re Here To Help
Sure, you might be in tip-top shape right now—or at least in generally good health. But statistics show that most people will need some form of long-term care during their lifetimes. If you don’t want to risk bearing the full burden of these potentially significant costs, it’s critical to put a plan in place. This can seem daunting, especially when coupled with the need for an adequate retirement income.
We at Blackbridge Financial know you don’t need yet another thing keeping you up at night, and we want to help relieve some of your worries. We focus on retirement income strategies and reducing the chance that a long-term care stay will eat away at your nest egg. If you’d like to see how we can help, reach out today to schedule a complimentary consultation by emailing me at firstname.lastname@example.org or calling 704.960.9646.
Antonio Porretta is an independent wealth manager at Blackbridge Financial with over 20 years of experience. He specializes in helping people create, distribute, and preserve their wealth. Antonio received an executive MBA from Saunders College of Business at Rochester Institute of Technology in 2007 and also holds the Accredited Asset Management Specialist (AAMS®) designation. Originally from Rochester, NY, Antonio has been a resident of Harrisburg, NC, since 2007. Outside of work, he enjoys playing soccer and tennis, coaching, and spending time with his wife, Laura, and their children, Cristiano, Victoria, and Matteo. To learn more about Antonio and how he can make a difference in your financial life, visit www.blackbridgefinancial.com.
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Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Blackbridge Financial are separate entities from LPL Financial.