When you are planning ahead for your retirement years, you are going to budget for the expenses that you would expect to incur while you are living life as usual. The golden years can be among the best periods of your life, full of travel, leisure activities, and quality time with family and friends.
This being stated, you should consider the twilight years that will inevitably follow.
Everyone knows that there are seniors that require living assistance, but there is a common misconception that is widely held about the phenomenon. A lot of people think that the need for long-term care is not particularly widespread among elders, but in fact, this is not the case.
The United States Department of Health and Human Services maintains a comprehensive, very useful website called longtermcare.gov. You will find some eye-opening statistics if you take the time to absorb some of the information that is housed there.
According to the site, seven out of every 10 senior citizens that are reaching the age of 65 will need help with their activities of daily living at some point in time. This is quite profound, and it is something to take seriously when you are evaluating the expenses that you may face toward the end of your life.
Yes, it is true that the statistic would include people that can receive the help that they need in their own homes from family members and friends for free. However, many individuals ultimately need a level of care that can only be provided in a nursing home. The number is 35% according to this government agency.
Long-Term Care Costs
It is not easy to get out a checkbook and pay for a stay in a nursing home out of your own pocket unless you have very substantial resources. Genworth Financial is a company that provides financial products for the older segment of our population. They do a lot of research to keep tabs on the state of long-term care costs in the United States.
They look at the country as a whole, and they also drill down to provide figures for the individual states and larger metropolitan areas within the states. We practice law in Cincinnati, and in our area, the median annual charge for a private room was $100,375 in 2018.
If you are willing to sacrifice a bit of privacy for some savings, you could choose to reside in a semi-private room, but the cost reduction would be relatively minimal. The median charge for this type of arrangement last year was $89,297. It should be noted that the average length of stay is right around one year.
These figures are enough to get your attention, but things are going to get worse before they get better. Genworth is anticipating a 4% per year rise in the cost for a private room in our area, and a 3% increase for a semi-private room.
Remember, you have to consider the possibility of two different rounds of long-term care costs if you are married. When you combine all of these statistics, you can see that nursing home costs could potentially consume a significant portion of the legacy that you have always intended to leave to your loved ones.
Medicare Won’t Help
Medicare will be there for you as a source of health insurance when you reach the age of 65 if you paid into the program sufficiently throughout your working career. This coverage will certainly help in many ways, but unfortunately, Medicare will not pay for a stay in a nursing home.
Nursing Home Asset Protection
How do you protect your hard-earned assets from potentially devastating nursing home costs? For many, the answer to this question is Medicaid. This jointly administered federal/state government health insurance program does cover nursing home costs.
That’s the good news, but the bad news is that there is a low $2000 limit on countable assets, and there are income limits as well. Because of the strict parameters, it takes careful planning to gain eligibility at the right time while you protect assets for the benefit of your loved ones.
Schedule a Consultation Today!
We would be more than glad to provide assistance if you would like to discuss nursing home asset protection strategies with an elder law attorney. You can send us a message to request a consultation appointment, and we can be reached by phone at 513-721-1513.
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