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  • Archive for 2011

    Long-Term Care: Don’t Go Bankrupt Trying to Pay For It!

    Monday, July 18th, 2011

    July is National Retirement Planning Month; a great time to assess your retirement goals and make sure you have the right plan in place to get there. One often overlooked part of the retirement planning process, however, is long-term care. Did you know that 70% of people over the age of 65 need some type of long-term care services? Or that 67 % of adult women have provided long-term care to someone in need? Providing long-term care can have a serious impact on a woman’s long-term finances and is something she herself may one day need. This month’s blog series will focus on the long-term and why it’s one of the most important investments women should make when planning for retirement.

    Now that you know why long-term care is important, as well as how to have a conversation with your loved ones about it, you may be wondering exactly how much long-term care actually costs.  Because long-term care encompasses such a broad array of services and supports, the costs can vary quite a bit.  To give you a better idea of these costs, in 2011, it cost:

    • $43,472 annually for home health aide services
    • $15,600 annually for adult day health care services
    • $39,135 annually for assisted living facility services
    • $70,445 annually for a semi-private room in a nursing home
    • $77,745 annually for a private room in a nursing home

      Depending on what state you live in, long-term care can cost significantly more or significantly less than these averages.  For example, let’s compare the annual cost of the same long-term care services listed above with California (a state with one of the highest cost of living in the U.S.), Tennessee (a state with one of the lowest cost of living in the U.S.) and Florida (the state with the highest number of seniors):

      California Tennessee Florida
      Home Health Aide $48,048 $38,896 $41,184
      Adult Day Health Care $20,020 $13,000 $15,600
      Assisted Living Facility $42,000 $36,960 $31,950
      Semi-Private Room in Nursing Home $77,745 $62,050 $76,778
      Private Room in Nursing Home $91,250 $65,883 $83,950

      To look up the cost of long-term care in your state click here.

      These services can clearly become pretty pricey overtime.  You may be wondering how in the world you’re going to be able to pay for long-term care.  You can pay for it out of pocket, but this is a very expensive option that many people cannot afford. Many may think that Medicare also covers these expenses; however Medicare actually covers very little when it comes to long-term care.  There’s also Medicaid, but you would have to first qualify for Medicaid by meeting the low-income requirement, which may cause you to spend down what assets you already have.

      For many individuals, the best option for paying for long-term care is through long-term care insurance.  Long-term care insurance helps to pay for many of the costs of care or personal assistance associated with long-term care that people might otherwise have to pay for themselves.  In our next blog, we will continue our discussion on long-term care, specifically focusing on what factors to consider when buying long-term care insurance.

      Long-Term Care: A Dialogue Towards A More Stable Financial Future

      Monday, July 11th, 2011

      July is National Retirement Planning Month; a great time to assess your retirement goals and make sure you have the right plan in place to get there. One often overlooked part of the retirement planning process, however, is long-term care. Did you know that 70% of people over the age of 65 need some type of long-term care services? Or that 67 % of adult women have provided long-term care to someone in need? Providing long-term care can have a serious impact on a woman’s long-term finances and is something she herself may one day need. This month’s blog series will focus on the long-term and why it’s one of the most important investments women should make when planning for retirement.

      Last week, we began the dialogue on what long-term care is and why it significantly affects women. The goal now is to keep this conversation going and, in the age of the retiring boomer generation, to encourage older adults to begin discussing their financial status with their adult children sooner rather than later.

      According to financial firm Ameriprise, one in three boomers have helped one of their parents with financial matters, such as paying utilities, rent, and/or medical bills. Having experienced this caregiving role themselves boomers may be able to understand why it’s important to have a conversation now with your children so that all the financial challenges and options are on the table as you approach retirement age.

      The question you may be wondering is where do I begin this conversation? To start, sit down with your children and explain to them how your finances and important documents, such as wills, Power of Attorney, etc., are currently organized and where they are stored.  If you have a financial adviser, accountant, or lawyer provide your kids with their individual contact information. The next step is to have a conversation about how you wish to live in your retirement. This could range from where you hope to retire one day to whether or not you wish to be moved into an assisted-living facility or if you wish to receive help at home if you can no longer live independently. Explain to your children how you wish to be cared for once you reach a certain age so that they can more accurately meet your long-term care expectations.

      Be upfront with your children about your finances and what your long-term care payment plan will be. If you are planning on paying for this care through savings let them know ahead of time so that together you can assess the amount you will need to meet the costs of long-term care. Or take this time to discuss long-term care policy options that will help pay for home health care or assisted living. The more your family is a part of this conversation and the more they know now the less stressful this process will be for them in the future.

      While it is not easy to imagine a time when you may not be able to fully take care of all your personal needs, ignoring it won’t make it any easier if and when the time comes. Your long-term care has a huge impact on everyone in your life, so start this dialogue now so that one day in the future you will all feel prepared. Our next topic in the series on long-term care focuses on the specific costs associated with long-term care and how better to prepare for a financially stable retirement.

      For more information on long-term care click here.

      Long-Term Care: An Important Issue for Women of All Ages

      Tuesday, July 5th, 2011

      July is National Retirement Planning Month; a great time to assess your retirement goals and make sure you have the right plan in place to get there. One often overlooked part of the retirement planning process, however, is long-term care. Did you know that 70% of people over the age of 65 need some type of long-term care services? Or that 67 % of adult women have provided long-term care to someone in need? Providing long-term care can have a serious impact on a woman’s long-term finances and is something she herself may one day need. This month’s blog series will focus on the long-term and why it’s one of the most important investments women should make when planning for retirement.

      By Melanie Cheng
      WISER’s National Academy of Social Insurance (NASI) Intern

      Being a healthy 23 year old college student, I had never given any thought to long-term care before coming to WISER.  To be honest, I didn’t even really know what long-term care was.  I have since learned that long-term care includes a broad range of health and support services people need as they age or if they are disabled.  These services include personal care and assistance with daily tasks such as eating, dressing, bathing, and performing household chores.  Long-term care services can be provided at home, at a nursing home, in an assisted living facility, or an adult day care center.

      I then thought to myself, why should I think about health services that I might not need for another forty to fifty years?  However, the more I learned about long-term care, the more I realized how important this issue is, especially for women.  I may not need long-term care services for a long time, but the reality is, I will probably need it at some point: 70% of people over the age of 65 need long-term care services.  As a woman, I will most likely need more long-term care than men because women tend to live longer.

      Additionally, because more than 60% of those providing home care are female, chances are, I will also have to perform some long-term care functions for my parents or other family members at some point in my life.  This could have a significant impact on my finances if I have to reduce my work hours or leave the workforce altogether to care for them.  Furthermore, when I finally do need long-term care, I may be unable to afford it: the median income of women age 65 or older in 2009 was just $15,282.  This small sum covers just one-fifth of the average cost of a room in a nursing home for one year.

      In summary, I realize now that regardless of age, educating yourself about long-term care is an important step in planning for your future because you will likely find yourself caring for others, receiving care, or both.  Retirement Planning Month provides a great opportunity to learn more about long-term care and to share this knowledge with others. Stay tuned for next week’s long-term care blog in this month’s series, which will look at continuing the long-term care dialogue amongst family and friends.

      WISER

      About Us

      WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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