The Ultimate Rainy Day Fund
How to plan for the high cost of long- term care before it undoes you or your family
One of the largest threats to your financial stability and independence is the potential cost of long- term care. More than 50 percent of Americans will require some form of long- term care, according to most counts, so it’s something all of us should be planning for. There are several different ways to go about it. Ultimately, your plan should reflect your financial capacity, personal preference and family’s resources.
Start with weighing the potential of selffunding. Examine how liquid your assets are and then, in what order you’d liquidate them, which should help you determine if you have enough to cover such costs. Consider this: Non- skilled, home health care can easily exceed $ 25 an hour.
Insurance can defray some expenses. Terms and features vary widely, from when the benefits begin to how long they last, what the maximum daily payout is to what services the policy covers. For traditional long- term care coverage, you pay an annual premium, just like you do for your car insurance. A combination policy is life insurance with a long- term care coverage rider. Work with an insurance agent to find a plan that provides the most comprehensive coverage you can afford. And act sooner rather than later. Most policies have underwriting requirements, so the younger you are, and the better your health, the lower your premium will likely be.
No one wants to impose on family, but if a healthier spouse or children can provide some of the care, it could equate to a sizable savings. Still, neither is the complete answer, or a sound one. Outside help will still be needed. And if your spouse should also become ill, you need to be prepared for costs to increase sharply.
Similarly, moving to an assisted living facility is one of the most stressful decisions a family will face, but it’s lessening some with planning and updated, improved infrastructures. Many, now, are set up as tiered communities, where care’s increased as it’s needed, from independent living to a hospice, which removes much of the stigma and eliminates the need to find another, better- equipped facility when your health deteriorates. Most, in turn, maintain medical underwriting qualifications, so don’t begin researching facilities upon the moment of need. Another reason not to hold off: the cost. As you can imagine, there’s a broad range that hinges on the ameni- ties. The earlier you can target places that fit your lifestyle now and what you roughly expect it to be in the future, the larger the window to budget accordingly.
Planning for long- term care combines the goals of financial and estate planning with the concerns of protecting and preserving assets from some inevitable and very substantial expenses. A sound strategy will provide stability and maintain your independence ... along with your family’s.