By Paul S. McNulty, CFP®
Do you really need long-term care insurance? It’s a question that’s crossed all our minds at some point. 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. But for others, the hefty premiums just don’t seem worth it and they don’t think they’ll need it. Regardless of which camp you’re in, here are 5 surprising things you should know about long-term care (and the impact it could have on your nest egg later in life).
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. And it’s estimated that 14% will need care for 5+ years, while the average person will need it for one to three years. (1) It’s important to know that we’ll likely all need some form of long-term care in our 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. It covers acute care expenses like doctors’ visits, prescription drugs, hospital stays, and short stays in a skilled nursing facility in special circumstances, but it doesn’t pay for assistance with daily personal care needs such as bathing, feeding, getting dressed, and supervising. (2)
3. It’s Challenging To Pay For Rising Long-Term Care Expenses Without Insurance
Did you know the average national monthly cost for an in-home health aid is $4,385? Assisted living facilities cost $4,051 a month on average, while a private room in a nursing home 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 for 32% of households with a $1 million net worth. (4)
4. Long-Term Care Insurance Covers More Than You Think
Many people think long-term care insurance is for nursing homes only, but there’s way more to it than that. This insurance also covers home health aides, assisted living facilities, retirement communities, and more. It even pays for professional help should you need assistance 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, which is where long-term care insurance comes in handy.
We Can Help You
Statistics show that you’ll likely need long-term care at some point. And that means you will need to find some way to pay for it. This can seem daunting, especially if you are concerned about saving enough to live on in retirement.
At Boston Metro Advisor, we want to help relieve some of your worries. We specialize in healthcare planning and strategies to decrease the chance that your medical expenses will eat away at your nest egg in retirement. If you’d like to see how we can help, contact us for a complimentary consultation by calling (781) 995-0253 or email me directly at [email protected] today!
Paul McNulty is the founder of Boston Metro Advisor with over 20 years of experience helping people navigate the ups and downs of the economy toward the financial future they envision. His education consists of a Bachelor of Science in business administration from the University of Rhode Island and the CERTIFIED FINANCIAL PLANNER™ (CFP®) professional designation.
Paul’s experience and education have made him a multi-faceted professional capable of assisting people with virtually all their financial needs. His services include every facet of retirement planning, from 401(k) rollover services and income planning to wealth management and estate planning. Paul has been active in his community over the years as a youth sports coach. When he’s not spending time with his wife, Cindy, and their two children, who are both recent college graduates, Paul enjoys reading, playing golf, and fishing. Learn more about Paul by connecting with him on LinkedIn.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.