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

    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.

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      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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