According to public surveys conducted, most people who have retired or nearing retirement age are worried about rising costs of long term care (LTC) and not having enough savings to retire. Along with medical and health care expenses, long term care is not cheap especially if there is no family to care for the elderly. It can quickly deplete your limited savings or even cause a financial strain on your loved ones.
Planning for long term care is the best way to ensure your retirement savings will not be emptied by medical bills. Many people are not familiar with long term care insurance because the options are confusing and they think that they are already covered adequately by their medical or life insurance. Other people feel that long term care insurance (LTCI) is an additional expense, so they do not consider the risks and costs of not having any cover. It is important to start incorporating costs of long term care into financial plans for young adults.
We will define what is long term care for seniors and retirement and the best ways to finance long term care. There are ways to select the best long term care insurance policies and reduce the cost through various coverage options and terms.
Long term care insurance is still relatively new and designed for the mass health care needs of baby boomers. Most people equate long term care as nursing home care and assisted living facilities for seniors. Long term care insurance products have only been available for 30 years and yet to achieve widespread acceptance. Initially, long term care insurance policies garnered a bad reputation because of the poor coverage terms, low success rate of policyholder claims, and high premium costs. As a result, very few people above the age of 50 are buying LTCI policies. The situation have improved now, especially long term care insurance from major insurers and policyholders are offered better covered care and discount premiums.
Long term health care for retirees is really about the day to day activities such as walking, eating, dressing, cleaning up, using the bathroom etc. A commonly used standard to determine if a person needs LTC is when they need help to perform two or more basic daily living activities. Thus, long term care services differs from medical care and can range from nursing care, administering medication, physical therapy, etc. long term care also applies if a person suffers from a non permanent condition such as injury, illness, or surgery that renders him/her to require assistance for activities of daily living (ADL) for a brief period of time.
Compare Long Term Care Living Facilities
Since long term care encompass a wide range of daily living activities, the actual costs and type of long term care services can be very different for each person. Nevertheless, retirement planning for LTC is important so that you do not leave a loophole that can jeopardize your overall plans. Read up on the example scenarios when you may require LTC and the estimated cost of long term care.
A big determinant on the costs for long term care depends on where you choose to receive LTC services. There are four types which provide different levels of basic living assistance to skilled nursing care.
Independent Living Facilities
Independent living facilities are preferred by seniors who wanted to live on their own independently but require some simple housekeeping help and no medical care services. These facilities are typically apartments which also offers group recreation activities, sports facilities, transportation to shopping malls, doctors’ offices, etc.
Home Nursing Care
Most seniors with family members will prefer to stay in their homes. If family and friends are not able to provide full time home care for seniors, skilled nursing care can be arranged from a few hours to 24 hours a day, or even stay in seven days a week.
It is important to choose a home care agency that hired skilled and registered nurses that are qualified to provide the proper medical care and daily living activities assistance as required.
Assisted Living Facilities
Assisted living facilities are generally offered in an apartment or building with on-site services such as meals, social and recreational activities, limited nursing care such as physical therapy. Assisted living is suitable for seniors who require help with less than two activities of daily living (ADL). It is not recommended for patients who require constant attention, skilled nursing care or rehabilitation. Comparing assisted living to independent living, there are additional nursing care services provided.
Note that assisted living facilities are not tightly regulated and thus the level of skilled nurses and medical workers on the premises may vary significantly. Check for the ratio of nurses taking care of seniors to estimate the level of nursing attention available.
For seniors requiring more medical care, physical therapy and monitoring of medical conditions, moving to a nursing home will be a better idea. Professional nursing homes are equipped with more certified health care workers such as doctors, nursing aides, registered nurses etc because they are regulated by many states.
Besides the level of long term care services provided at these different facilities, you can also consider how they are being provided in order to choose the most suitable LTC.
Continuing Care Communities
These communities offer several different types of senior care facilities in one location. When your long term care needs change, you can continue to enjoy living assistance without relocating to a different facility. This is a common occurrence as we age and our bodily functions deteriorate.
Continuing care facilities offers a big advantage to married couples who may require different levels of long term care services. They can continue to love together in the same continuing care community since various types of senior care facilities are available in the same location such as independent living, assisted living, nursing homes etc.
Comparatively, most nursing homes or assisted living facilities are stand alone long term care facilities that provides only one particular level of care. So if you develop some health complications, you may need to move to another facility which may pose problems for married couples.
Group Homes With Assisted Living
If you feel that large assisted living facilities may be too impersonal and institutional, check out local group homes which offers assisted living services in a single-family structure with 5 to 10 residents. Note that group homes are subject to very few regulations in most states.
The costs for long term health care for retirees varies a lot depending on the facilities required as well as the duration of stay. While you may not necessarily need long term care, it must not be ignored within your overall financial planning for retirement because most people will not be able to self insure and pay out of pocket.