Like everyone, you’d like to enjoy a long, healthy, independent life. But the future is unknowable, so it’s a good idea to prepare for a variety of outcomes – including the possible need for long-term care.
Consider the following:
• Someone turning age 65 today has almost a 70% chance of eventually needing some type of long-term care service, according to the U.S. Department of Health and Human Services.
• The median annual cost for a private room in a nursing home is about $105,000, and it’s almost $55,000 for home health aide services, according to the insurance company Genworth.
Medicare also may cover very few of these costs. Consequently, it’s a good idea to include potential long-term care costs in your planning. While everyone’s situation is different, you may want to budget for two to three years’ worth of long-term care expenses.
But how can you prepare for these costs? Essentially, you’ve got three options:
• You could self-insure. If you would like to cover the costs of long-term care out of your own pocket, you’ll need to consider a few issues: How will these potential costs affect your family? How might your other goals be affected, or even altered, by your decision to self-insure? Will you have to adjust your investment mix or designate certain investments to help achieve your self-funding objectives? None of these questions should dissuade you from trying to self-fund for long-term care, but they can help you clarify the significance of this choice within your overall financial strategy.
• You could transfer the risk to an insurance company. You could purchase either long-term care insurance or a life insurance policy that provides long-term care benefits in addition to a death benefit. Before obtaining either type of policy, though, you’ll want to know exactly what the policies cover and when they kick in. Also, be aware that the younger you are when you buy a policy, the lower the premiums. On the other hand, if you buy a straight long-term care policy when you’re young, you could end up paying premiums for many years for coverage you may never need. A financial advisor can help you evaluate all your insurance options and recommend which one, if any, is appropriate for your situation.
• You could combine self-insurance with an insurance policy. You could plan to self-insure for long-term care for a limited time – perhaps one year’s worth of anticipated costs – and then buy enough insurance for additional expenses. This technique could involve some juggling on your part, in terms of where to direct your money, but it might prove to be a workable compromise between self-insurance and putting all your long-term care resources into an insurance policy.
Which of these methods is right for you? There’s no one “right” answer for everyone. But whichever route you choose, you’ll be helping to protect yourself – and possibly your grown children or other family members – from the potentially huge costs of long-term care. And that protection can help brighten your outlook throughout your retirement.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor Jennifer Phillips 703 Hebron Ave. Glastonbury, CT 06033.
Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P., and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.
This is original content from NewsBreak’s Creator Program. Join today to publish and share your own content.
Comments / 0