SFP Retirement My Way Q+A, Long Term Care?

| April 05, 2021
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Wendi, in North Carolina, is worried about the cost of long-term care insurance?



How important is it to plan for a potential long term care event?

  • Everyone’s situation is different, and their plan should be custom and unique to them.
  • Depending on your family genetics, you could be more or less likely to need nursing home care.
  • You could have several different strategies and options to address long term care needs.
  • The fundamental principal is that there is a very real chance that you could need to enter a nursing home facility or have a nurse come to you, and that risk needs to be addressed.

 

Who will have to pay for long term care?

  • Many people believe that Medicare will pay for long term care expenses; They do not.
  • The government program that pays for nursing home care is Medicaid.
  • To qualify for Medicaid assistance, you need to meet a certain financial specific.
  • I most cases Medicaid will only be available to you after you have spent down most of your own assets.

 

What advice does Ryan have for people looking into long term care in retirement?

  • Some people opt for long term care insurance. This can be a great solution, but it can also be very expensive.
  • Others try to protect their assets from a potential nursing home claim, by working with an attorney.
  • Others attempt to self-insure, by putting money away to pay for the potential cost of the nursing home care.
  • And some people just cross their fingers and hope that they do not need the care.
  • Whatever you decide to do, you should speak with an expert and get professional guidance.

 

On this addition of SFPQ and day Wendy in North Carolina asks Ryan about his thoughts on long-term care insurance. Ryan explains that everyone situation is different and that their plans should be customized to fit their specific needs and goals. There is no way of telling if you will need or not need long-term care.

A good way to estimate or project if you will need long-term care, is to look at your family’s history and genetics. If both of your parents need a long-term care, then there is a good chance that you could need it as well. There are many different strategies and options for addressing a potential long-term care event. The most important thing to remember is that the chance of you needing long-term care whether that is in a nursing home facility or having a nurse come to you, is a very real risk and needs to be addressed in your retirement planning.

Many individuals believe that when they turn 65 in qualify for Medicare, that they will be covered for a long-term care or nursing home expense. In most cases that is not the reality of what will happen. Medicaid is a government program, that will pay for the long-term care expenses, if you were to need it. In order to qualify for Medicaid, there are certain financial guidelines that you must meet. Which basically means you must spend down most of your assets before Medicaid will step in and help pay for the long-term care expense.

So, because of this reality, people use different strategies to try to prepare for a long-term care expense without exhausting all their assets.

A common solution to this problem is the use of long-term care insurance. Long-term care insurance can be a very useful tool to offset the cost of the long-term care. However, it can be very expensive in terms of the cost of the premiums, and also difficult to qualify for the coverage in the event that you need long-term care.

Other people attempt to protect their assets by working with an elder care attorney to strategize on how best to protect their assets.

One solution which only works for a very small group of people, is to self-ensure. When you self-ensure you are basically putting money away that is earmarked for a future, potential long-term care expense. Most people do not have the funds or resources to do this.

And lastly, some people just cross their fingers and hope that they will not need long-term care.

Whatever you decide to do and whatever strategy you decide to pursue, you should speak with an expert who can give you professional guidance and how to navigate this very complicated landscape.

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