DOLLARS & SENSE
Planning for Long-Term Care
One of the largest threats to your financial stability and independence is the potential costs of long-term care. Since studies show most of us will need some type of long-term care, it is something to consider as part of our financial planning. There are different ways to address this issue and individual plans should reflect our financial capacity, personal preferences and family resources.
One way to cover costs is self-funding. First, examine your assets to determine how liquid they are, in what order you will liquidate them and determine if you actually have enough money to cover costs that can easily exceed $25/hour for non-skilled home care, for example, and even higher for home health professionals.
Insurance can defray costs. One type is the traditional longterm care coverage much like auto insurance with annual premiums. Another option combines life insurance with a long-term care coverage rider. Policies can be confusing and the terms and features can vary widely―when benefits begin, how long they last, maximum daily payout and what services are covered. Before deciding, work with an insurance agent to determine plan benefits and if the costs are within your current budget. Since in most plans there are underwriting requirements, premiums are affected by your age and health.
Family can also be a resource. Often times the healthier spouse or even children are able to assist with care. Even with those options, ask yourself if they could use additional help, or even if you want to burden them.
You can also consider moving into a life care retirement facility. Moving can be emotional and stressful but there are tiered retirement communities and centers that can eliminate additional moves. Many have medical underwriting qualifications, so be sure to research your options as early as possible. You can progress from active retirement living, to extended care for temporary needs, to assisted living, to skilled nursing care, to dementia care and even to hospice care. There is a wide range of costs associated with various communities and centers. Find the one that best suits y our needs and meets your budget.
Long-term care planning combines the goals of financial planning and estate planning with the concerns of protecting and preserving assets from the very substantial costs of long-term care.
Sound long-term care planning not only protects your financial stability and independence, but it may also prove to be the greatest gift you can give to your loved ones.
FAMILY CAN ALSO BE A RESOURCE.
LEGAL, INVESTMENT AND TAX NOTICE: This information is not intended to be and should not be treated as legal advice, investment advice or tax advice. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal or tax advice from their own counsel. Steven V. Greenstein is Executive Vice President, Wealth Services, for The Sanibel Captiva Trust Company, an independent trust company with $1.5 billion in assets under management that provides family office and wealth management services.