You are a savvy planner. You know that comfort in retirement comes from proper planning, and the sooner you start planning, the better off you are.
You work hard, saving as much as you can, contribute to your 401k or other employer savings, and you diversify your investments. You protect your family against potential hardship by having life, health, and disability insurance and work with a financial planner to ensure you’ll be financially secure after your working years are behind you. Despite all this planning, when the subject of long-term care comes up, you think you’re too young to worry about that - which may not be the case.
In fact, long-term care may be the single most significant uninsured financial risk Americans face, with the national average cost of a private room in a nursing home running over $94,000 a year; even higher depending on where you live. Home health can also present a financial challenge, with a national average cost of almost $30,000.1 The result – even the most savvy planner may find these costs greater than what they are willing or able to pay out-of-pocket.
You can hope that it never happens to you, but as you age, the potential need for care grows. In fact, approximately 70% of people who reach age 65 will require some period of ongoing assistance or supervision, due to a physical or cognitive impairment.2 That’s why you’re never too young to think about long-term care. Perhaps you’ve thought about putting aside enough money to cover your potential long-term care expenses. As the national averages for costs indicate, that may be challenging given your other obligations and may not be how you want to use your hard earned savings.
Or, you may be counting on government programs like Medicare or Medicaid to pay for your care. Neither program is something you want to count on. Medicare was not designed to cover long-term care expenses and Medicaid only applies if your assets decrease to poverty levels.
It may be time for you to consider adding long-term care insurance to your financial plan. Many of the newer plans are designed to fit the budget of younger buyers who tend to have more competing financial priorities. If you’ve considered the coverage in the past and decided against it because of the cost or because it didn’t seem to fit in with your finances, it’s time to give long-term care insurance a second look.
Now is a great time for consumers who felt they were “too young” for long term care planning to discover what an insurance policy can actual do for them. You may be surprised to find how a policy can fit into your budget.
- John Hancock 2013 Cost of Care Survey, conducted by LifePlans Inc. Home care costs based on six hours of care, five days a week.
- U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, April 2014.