It is not just possible, but probable, that as people age they will need assistance with personal care—whether in their own homes or in an assisted living or other facility.
Despite this likelihood, most people don’t do much, in advance, to financially prepare for their future care needs. This could be because many have the misconception that Medicare will pay or because they are in denial or they just simply haven’t given it much thought. They are focused on today and not necessarily on planning for tomorrow.
Advance planning is especially important though, because—whether in a facility or at home—care is expensive. In fact, the median cost for assisted living is $4,000 per month (2018 report from Genworth Financial), while the cost of having an in-home aide for just 4 hours per day, 7 days a week, is also about $4,000 a month.
[Read about How to Choose the Right Home and Community to Retire and 3 Considerations When Hiring At Home Care]Even with a reasonably sized nest egg, assets can dwindle quickly as the cost of paying for ongoing care can add up fast. With that being the case, it may be wise to speak with a financial advisor regarding how you will manage the costs. You may also want to consider some of the following options to help pay for future care needs, including:
Buying long-term care insurance. Long-term care insurance pays for care at home and often pays for care in an assisted living facility.
Moving to a less expensive area in retirement.
Finding out if there are subsidized home care or assisted living options in your area, by checking with the local office on aging (aka Area Agency on Aging). It may make sense to check with Area Agencies on Aging in other cities or towns that you would consider moving to, to compare what is available.
Applying for Medicaid. Medicaid may pay for in-home and facility care for those with very limited income and assets. Benefits and eligibility requirements vary widely by area. You can check with your local office on aging or your local State Health Insurance Assistance Program (SHIP) to find out more.
Though the idea of needing care when you are older and making a plan to pay for that care is not fun or sexy, it is nonetheless important. If you want to have as much control and choice over your future, the time to start planning for it is today.
[For bonus planning points, read Why Everyone Needs a Personal Care Team.]
