“The good news is that we now live longer and the bad news is that we now live longer” so say Michael Aun, author, businessman, and state-recognized motivational speaker.
You’ve done everything correctly. You have lived with your means and have saved diligently. Through all the highs and lows of the market, you have maintained a well diversified portfolio, you have kept observed investment costs and have used a variety of strategies to minimize taxes on your profits. As a result, you have accumulated a sufficient nest of eggs to finance your retirement income and provide your children with a decent legacy.
Unfortunately, you can lose everything if you do not take the right steps to protect your assets. I am not talking about the prospects of continued volatility of the market or a double-dip recession that usually dominates the news and everyone’s opinion. I am talking about the three four letter words that almost nobody dares to comment. Long term care that includes the cost of a nursing home stay, assisted living or home nursing.
Why should that be a problem? Get a supplement plan for 2019 at https://www.medisupps.com/
According to the US Department of Health and Welfare, 70% of people over the age of 65 need home-based care at some point in their lives. Out of those in need of care, over 75% of them need it for more than one year.
The current life expectancy after the age of 65 is put at 17.9 years, which means that your chances of getting help from chronic illnesses are greater than they were 10 or 20 years ago.
The cost of care is not cheap. The average care cost according to the American Association for Long Term Care Insurance is $ 73,000 per year. The cost of home nursing can be significantly lower or higher, depending on what services are needed and how often the patient needs to be cared for.
The cost of care has increased by an average of 6% per year for some years now. At this rate, the average care cost in twelve years will be twice that of today, which would be $ 146,000 a year. Assuming that the cost of care will continue to increase at the same rate for another 12 years, in 24 years, the cost of care will be put at $ 292,000 per year.
Medicare covers only the cost of the first 20 days of a qualified care that follows at least three days after hospital admission. Medicare and your supplement may pay for another 80 days of care, but only if a medical professional says you need proper care and again after a three-day hospital stay. https://www.floir.com/
- So what should you or can you do about it now?
- Would you like your child or spouse to take care of you? If so, how will that impact their lives?
- What you are going to do about it depends on what you want to do if you need some sort of long term care.
- Which assets would you liquidate?
- If you would rather have a professional care, how would you pay for their services?
- How much more taxes would have to be paid?
You will have to answer all of these questions before a plan of action can be drawn so you are not forced to make difficult decisions under duress.