I am a 68 male retiree with a wife who is turning 65 in May, 2016, and my main concern regarding retiring is how I can pay for a long term care situation without wiping out my 401K?
My mother is 88 years old and has been living in an assisted living facility with Alzheimer’s for 3 years, costing me and my siblings $8,500 each month. Her health is good, but my mother’s mind is slipping and this situation could continue for years.
I’m concerned this can happen to me or my wife and there goes my 401K with nothing left for me or my wife to continue our current lifestyle.
Can you please explain various long term care options that we can apply for to help with LTC needs?
Paul from Sugar Land
You are absolutely correct to be concerned about a prolonged illness or chronic condition being one of your and your wife’s biggest retirement expenses if not planned properly.
Medicare pays for a maximum of 100 days of skilled nursing care before retirees must absorb the remaining cost themselves. You are seeing your mother’s nursing home care cost $8,500 per month for the last 3 years with no end in sight.
Because Medicare is controlling healthcare costs, most Medicare beneficiaries are receiving $0 co-pays for days 1-20 in a skilled nursing event.
A long-term or chronic condition can be very costly when you begin to receive care. The average annual cost ranges from $35,000 to $48,000 per year for semi-private nursing home stay or $225 per day to $70,000 to $83,000 per year for private nursing home stay or $300 per day.
However, depending on the level of assistance that you need, there are some inexpensive care options and ways to protect yourself from excessive long-term care costs. Here are a few ways to find affordable long-term care:
Long-Term Care Insurance
Many purchase a long-term care insurance policy. The younger you are when you purchase a long-term care policy, the lower the premiums will be. My advice is to look into Long-term care insurance while you are younger and in relatively good health. And, make sure that your policy covers care at home as well as facility care.
Hybrid Life & Annuity Policies
Many life/annuity insurance policies have a provision if you need long-term care; you can receive a certain amount of long-term care with your life/annuity policy’s face amount.
Aid and Attendance Benefits
The VA can help Veterans with long-term care issues. There are over $20 Billion dollars available for long-term care pension money just waiting for Veterans to apply for their Aid and Attendance benefits. You need to have a long-term care issue to qualify Paul, you must be a veteran to receive benefits, and both you and your wife could qualify).
Check to see if you can qualify for Medicaid. Many have to “spend down” to qualify.
Toni Says: Long-term care can be very complex. Seek the advice of an elder law attorney who can help with long-term care and estate planning.
Toni King is an author, columnist, and radio and TV personality who specializes in Medicare, Social Security, and long-term care planning. While conducting a Medicare workshop in 2009, Toni was approached by a member of the audience who had received incorrect information about his Medicare Part B enrollment from Social Security. After taking a couple of days to help the gentleman straighten out his overwhelming problem, Toni’s new mission had become clear. Following more than 27 years as a top sales leader in the Medicare insurance industry, Toni would become an advocate for Americans receiving Medicare. Since then, Toni has devoted her life and career to putting Medicare into “people terms” with the help of her books, consultations, workshops, and website, ToniSays.com. Read more from Toni King here!