Long Term Care & Your Retirement Savings
During retirement, instead of adding to your savings, you watch their value go down as you begin making withdrawals for income. That disappearing act can quickly become accelerated due to a chronic illness or the cost of long term care. There are a lot of misconceptions about long term care. The following five facts will clear up what it is, who needs it and what it might cost your retirement nest egg.
What Is Long Term Care?
Fact One: The term long term care refers to a range of services, the most common of which include basic daily living tasks. As we age, our bodies get tired and it becomes harder to do the things we normally do. These activities – known as the 6 Activities of Daily Living (or ADLs) include the following:
- Getting dressed
- Using the bathroom
- Transferring (moving to or from a bed or chair)
- Caring for incontinence
Long Term Care – At Home or at a facility
Fact Two: Most people who need long term care prefer to receive it in the comfort of their own home. Sixty-five percent of people who need long term care receive the care at home as compared to 37 percent receiving care in a nursing home or an assisted living facility. Simple tasks such as grocery shopping or paying the bills are everyday tasks known as Instrumental Activities of Daily Living (IADLs) that can be part of your long term care needs. These tasks include:
- Managing money
- Taking medication
- Cooking and cleaning up after meals
- Shopping for groceries
- Using the phone or other communication devices
- Caring for pets
How Long Does Medicare Pay For Long Term Care
Fact Three: The average duration for long term care services is three years. Medicare does not pay for long term care services in a nursing home for longer than 100 days. It also doesn’t pay for non-skilled assistance with the six ADLs or IADLs.
Average Cost of Long Term Care
Fact Four: The average cost of a semi-private room in a nursing home is $6,235 per month. That comes out to be $74,820 a year. The cost of long term care varies in each state and is dependent on the types of service required.
Women are more likely than men to need LTC
Fact Five: Women are more likely to need care longer than men. Women tend to outlive men by an average close to 3 years and widows experience substantially higher poverty rates than other households. Preparing for the realities of long term care is one way to take care of the people that you love.
Improved Life Insurance Products vs traditional LTC Insurance
Bonus Fact: Retirees have options when it comes to paying for long term care. Many life insurance products are now available that are much easier to qualify for than traditional long term care insurance. Contact one of our qualified advisors via AskBeau.com for a complimentary, no-obligation financial overview.
*Facts current as of 2014 from the U.S. Department of Health and Human Services <http://longtermcare.gov/the-basics/>
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