Whether you want to think about it or not, at some point, we all age. How we age, though, is up to us, and as many Boomers are beginning to find out, financial planning takes a front seat as you get older and begin thinking about retirement. A major factor that affects retirement savings and merits some serious attention is the possibility of long term care.
How would you respond if you suffered a bad fall one day and needed care for an extended period of time, say weeks or months? Would you be forced to make quick financial decisions and struggle to formulate a structured plan on the spot? Or do you have a backup plan, ready and waiting in case something like this ever happens?
More people are realizing the value of planning for a potential long term care situation. As each generation lives longer than the previous, the chances that we may need some sort of care, in a nursing home or at our own homes, increases. Without a steady income, even the slightest unexpected cost can make a big difference. That’s why it pays to plan ahead, and long term care insurance offers a smart and easy way to do just that.
Health Care Costs
The cost of long term care continues to climb annually, and even a year or two of care can put a big dent in your retirement savings. Unless you are vastly wealthy, paying for care out-of-pocket isn’t a feasible idea. Too many people wrongly think they can self-insure and are left financially devastated from the cost of services, forcing them to enroll in Medicaid. Taking out a long term care insurance policy can help you avoid this situation and prevent a long term care situation from becoming more stressful than it needs to be.
While the average US nursing home costs around $90,000 a year, long term care insurance premiums are merely a fraction of that price. That means that even a minimal policy can provide you with extensive value in coverage. There is a chance you may never use your policy, and in effect, will have wasted money on premiums, but when you consider the cost of care, it’s not hard to see why so many consider the premiums worth it. After all, you will insure your car and your house, regardless of how big the risk of disaster is, so why should an exception be made for your health?
On the contrary, our health is something we should work hard to maintain. Financial planning goes a long way in terms of a successful and happy retirement, but if you don’t bother to keep yourself in good health, you are only increasing your chances of needing long term care. We always recommend that our clients take an active role in keeping up good health to enjoy retirement to the fullest and avoid using their policy.
To ensure you will qualify for a policy, it’s smart to start looking into plans when you are in your 40s and buy a policy in your 50s. That way, you will receive the lowest rates due to your age and better health. It’s impossible to know if and when a long term care situation will ever arise, so getting a head start will help you be prepared should you ever be faced with such a problem.
We help our clients objectively shop the market and compare all the top carriers. It’s important to shop around to be sure you are getting the best rate. Read more about long term care insurance or request a quote today.