New Haven Register (Sunday) (New Haven, CT)
Long-term care challenges, costs
One of the biggest challenges in retirement is the possibility that you find yourself spending down your life savings to pay for long-term care costs.
In Connecticut, the average cost of nursing home care is approximately $462 per day, or $168,700 annually, according to the Connecticut Partnership for Long Term Care in its most recent quarterly update and recent annual studies.
The average annual increase in the cost of care has been growing by 4.7 percent going all the way back to 1988, according to CPFLTC. Let’s face it, given the choice, everyone prefers to stay in their own home. Unfortunately, at-home care costs can be greater than a nursing home, depending on the level of care you require.
For example, the cost for a home health aide worker is around $30 per hour, the CPFLTC says. At-home nursing care costs considerably more. It’s sobering to think that “around the clock” care costs easily could reach more than $700 per day in extreme cases.
(As an aside, if you choose to receive care at home, an ideal living area would allow for one-floor living with easy access to outside areas.)
As part of your overall financial plan, I would recommend having a conversation with your family, attorney and financial planner about your preferences in these matters since the chances of needing care are high.
According to the U.S. Department of Health and Human Services, those who are celebrating their 65th birthday this year will have close to a 70 percent chance of needing some level of long-term care services during their lifetime.
With those odds, it’s wise not to stick your head in the sand when it comes to long-term care planning and its challenges.
You can insure yourself against some of these costs. You have the option to purchase traditional longterm care insurance or look for life insurance policies that allow you to tap into the death benefit to pay for long-term care costs.
Keep in mind, all of these insurance policies have their nuances and varying levels of benefits, so be sure to work with a knowledgeable adviser on these matters.
Unfortunately, none of these options are inexpensive, but they can be a godsend when the need for care arises. The key is to apply for coverage while you are healthy, since most insurance-based offerings require good health to access them.
The other option is to self-insure against the cost of long-term care. Speaking from experience, any preplanning you can do in this area will take a great burden off you and your
loved ones if the situation arises.
Eric Tashlein is a Certified Financial Planner professional, founder and financial adviser at Connecticut Capital Management Group, LLC, 2 Schooner Lane, Suite 1-12, in Milford. He can be reached at 203-877-1520 or through www.connecticutcapital.com. Connecticut Capital Management Group, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed.
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