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Long-Term Care Needs Long-Term Planning

My parents who are both 86 years old will be moving into an assisted living facility this week. My dad has been diagnosed with terminal bladder cancer. Both he and my mom are in need of 24/7 care to take medications, deal with medical issues, and basically be available at any time to aid and assist. At one time, my wife Barb and I thought we could make it work to bring them to our house. We quickly realized that Dad and Mom need professional care, something which is way above our pay grade. We also need to take care of ourselves and our family to adequately be there for them.

The process of looking for an assisted living facility has become an education. We’ve found a marvelous one near our home and are very pleased. What’s not pleasing is the cost. This article is not meant to rail against the high cost of the facilities because they certainly earn every penny they get. What they provide in value is worth the compensation. The purpose of this article is a warning. Consider me like the ghost of Jacob Marley in Charles Dickens classic story, A Christmas Carol. I’ve come for your reclamation.

The reclamation I speak of is in the future. It’s the re-claiming of your finances and money you worked hard for your entire life. It’s the re-claiming of peace of mind for your children and family. It’s taking care of business in advance so that the stress of age and declining health isn’t exacerbated by financial burden.

We have been pretty fortunate. Dad did a credible job of saving money his whole life. He is in a financial position to move into assisted living and we are in a position to help as much as possible. However, many are not as fortunate and I guarantee you the cost of this type of facility will continue to rise as will the need for it. (Barb and I have picked out our apartment at this facility already – a perfect view of the bay – but I digress)

Monthly costs for your stay should you need assisted living varies greatly based on your needs. Let’s just say in 2011, the range can be from $6,000 – 10,000 per month. That’s right, per month. Veterans have benefits available, but mostly just for those who have no to low-income. I would anticipate that over the course of the next 10-25 years, you will see an increase in costs and a decrease in availability. Supply and demand at work.

Here’s my plea to you. Get Long-Term Care insurance while you can. I actually purchased the coverage for me 5 years ago at age 41, well before my parents were facing this. Here are reasons why I chose to and why you should do the same for you and/or your parents…

  1. The younger you are, the lower the premium. I’m paying $600 per year for a benefit of $180 per day ($5400 per month). I’m going to chat with my agent about increasing that amount. My company will keep this premium at this level forever if I don’t raise the benefit amount. Basically, like life insurance, if you buy young, you end up spending much less and your premium will always be lower. If you wait until you’re older, you will have a higher premium because you’re closer to using it!
  2. Buy while you are insurable. Many things can make you uninsurable or give you higher rates. Diabetes, cancer, high blood pressure, multiple sclerosis, heart problems or even an accident. Heck, the memory test they gave me was hard enough at 41 years old; I can’t imagine I would have done better 25 years later!
  3. An accident now might put you in the unenviable position of needing assisted living now. The late actor Christopher Reeve certainly needed assistance after his riding accident in his 40’s. He had the money. We may not.
  4. You’re lifted a financial and care burden for your family. There is a lot of responsibility that comes to the family to take care of aging parents. Help your family out by planning in advance with your own money. While Dad didn’t have Long-Term Care (I don’t even think he knew what that was), he did his planning on his own and made it easier for us. You don’t have to save all your money. Instead, you can transfer that responsibility contractually to an insurance company by paying your premium now.

If you’re in your 40’s, you may think you’re still too young. Professional financial advisers often tell you to start thinking of this at age 55 or so. That’s decent advice, however I don’t think it’s ever too early to consider. If you have a parent that is between 50 and 65, you may broach the subject with them now. It should be something you discuss as a family now, because it may be too late down the road.

Here’s the bottom line. Assisted living and nursing homes are very expensive and can drain bank accounts quicker than a leaky pipe under your sink. I only see this trend increasing in both need and cost in the future. Medicare and other health insurances don’t cover the cost of rent or aid and assistance. I predict that this will be a severe crisis if our elderly and their families can’t afford the type of care they need. You do have options and they include insurance. Diversify your savings for that time between savings, smart investing, and Long-Term Care insurance.

The money you save just might be your own!

© 2011 Dan Weedin. All Rights Reserved

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