6 Myths About Long Term CareSubmitted by Reby Advisors | Certified Financial Planners | Danbury, CT on February 27th, 2019
By Patrick Doherty, CFP®, February 27, 2019
The skyrocketing cost of long-term care causes many Americans to either run out of money in retirement or burden loved ones with their care. Approximately 70% of people 65 and older will require extended care at some point during their lives, and with annual costs up to $160,000 per year in Connecticut, this is a risk that must be planned for in order enjoy a financially secure retirement.
When it comes to your financial wellbeing, knowledge is power. Understanding the realities of the cost of aging is a first step towards protecting your financial independence from this critical risk.
Here are 6 myths about long term care that you should be aware of:
The government will pay for my long-term care.
While this is true in some cases, it’s important to note that government programs can be tough to qualify for, often leaving people without a second plan. Even programs like Medicare, Medicaid, and VA services can be hard to qualify for and they often have very specific guidelines and requirements.
Perhaps most important: you may be required to deplete your retirement assets completely prior to Medicare paying for your long-term care needs. This often includes forcing you to sell your home to pay for care.
I can save all of the money that I’ll need to cover my long-term care.
Long-term care is certainly no cheap endeavor. In fact, even what most people save for retirement isn’t enough to cover their medical care, and if you plan to pay for your long-term care out of pocket, you could find yourself struggling to make ends meet. At today’s average costs, a couple with $500,000 in assets would deplete their savings in only a few years after paying out of pocket.
Only the elderly require long-term care services.
It’s true that older you get, the more likely you are to require extended care. However, it’s a smart move to start planning much sooner than you anticipate needing long-term care. The younger you are, the less expensive long-term care insurance will be, and the more time you’ll have for cash value accumulation to self-insure either partially or in full. Once you need care, it’s generally too late to get insurance.
I don’t need separate LTC insurance because I already have health insurance.
False! Why? Because LTC is completely different from conventional health insurance in a number of different ways. Most importantly, healthcare insurance only covers medical related issues, not care-related issues. You’ll always need a separate LTC coverage to pay for those costs.
LTC coverage only pays for nursing home care.
While LTC can cover nursing home care, it is not exclusively reserved for that. In fact, LTC coverage allows each person to receive the type of care that they want. So, if you prefer at-home care, your LTC coverage can work within that standard. In addition, LTC benefits can provide caregiver training, care coordination, respite care, and even hospice care.
We don’t need LTC protection because we have each other.
In a perfect world, that would be fantastic, but in reality, LTC protection really is crucial – even more so for couples. LTC situations cam impact family members across generations, because the risk of not being covered can leave tremendous burdens on spouses, children, grandchildren, and so on – including financial burdens, time spent caring your you, and the emotional burden of not knowing whether you will be ok.
So, those are 6 myths about long-term care. Remember, while not everyone needs insurance, you at least need a plan!
To learn more about how to protect your assets and avoid burdening loved ones if you ever require extended care, sign up for our upcoming seminar to be held March 5th and March 7th or call us directly at (203) 790-4949.