Experts estimate that the average 65-year-old couple will need around $400,000 to pay for out-of-pocket costs that come with long-term care — keep in mind that's approximately $60,000 more than a couple's savings come retirement. Even with Medicare, experts estimate seniors need to sock away an average of $260,000 to cover medical debts, not including an additional $130,000 for long-term services such as a nursing facility or at-home care.
While these statistics are certainly frightening, they should be used as a motivator to plan ahead for long-term care, which can help you avoid higher premiums that tend to get pricier as we age. Start by considering all of the different long-term care options and choose a couple based on personal choice and budget. Common paths include aging at home (the most popular choice), community services (think adult day care, supportive housing programs, assisted living facilities, continuing care retirement communities, and nursing homes). Research the different options in order to determine a strategy for payment. Here are some of the most common options to consider.
There are many circumstances under which Medicare doesn't cover long-term care. By signing up for long-term care insurance when you're younger, you can save money. For example, rates increase by 2 percent to 4 percent in your 50s compared to six percent to 8 percent in your 60s. Of course, purchasing such insurance is easier said than done, as it comes with a hefty price tag. With that in mind, consider looking into selling your life insurance policy as a viable option. You may be able to sell your life insurance policy for a cash payout.
If you simply cannot afford long-term care insurance, consider adding a rider to your life insurance policy. It's possible that early benefits may be accessed if one of you becomes terminally ill or diagnosed with a cognitive disability, among other factors. Just keep in mind that anything used is deducted from the amount given to beneficiaries after the policyholder passes.
If your employer offers a high-deductible health insurance plan, it's a good idea to open a health savings account (HSA) to help you pay for future healthcare costs. As of this writing, you can deposit up to $3,450 in tax-deductible contributions — $1,000 more than that for those 55 and up. Even withdrawals are tax-free if used for qualified health-related expenses.
While there are several types of reverse mortgages, only one of them is used to help seniors pay for healthcare needs. The Home Equity Conversion Mortgage (HECM) is actually insured by the US government and only available through a lender approved by the Federal Housing Administration. It may be possible that seniors continue to live independently for several years before purchasing long-term care insurance or making home modifications. Keep in mind that a reverse mortgage may not be the best option if both spouses are in need of care outside of the home, as the remaining balance owed will be due immediately. This is not the case for seniors who opt for in-home care, however.
One of the best things you can do to reduce your health care costs is to minimize your risks and take responsibility for your health. Maintain a healthy weight, exercise, eat a proper diet, avoid smoking, limit alcohol intake, and visit the doctor on a regular basis. If hereditary diseases run in your family, make sure you're getting regular checkups to nip a potential health issue in the bud.
Experts Estimate - Forbes
Different Types of Care - Medicare.org
Fidelity - Long-term Care Options
Mason Finance - Cash Payout
Cannot Afford - U.S. News
Paying For Senior Care - Reverse Mortgages
Minimize Your Risks - NewsInHealing.org
For questions about long-term care insurance, call Heritage Senior Care (800) 562-2734
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