WHAT’S YOUR PLAN?Category:
Do you have a plan to protect your assets (cash, investments, and retirement savings) in the event of the need for Long Term Care?
AN OVERVIEW OF GOVERNMENT ASSISTANCE FOR LONG TERM CARE: Many people believe that federal programs like Medicare, Medicaid, or (for Veterans) the VA, will pay for long term care. Medicare Part A covers hospital stays, and Part B covers doctors' services and outpatient care. These programs mainly cover acute and rehab care for medical procedures. The VA is extremely constrained in its ability to assist veterans with long term care.
Long term care requires custodial care of a person who is physically or cognitively impaired and who requires assistance with daily activities. With few exceptions, no state or federal program pays for custodial assistance over several years. The family is forced to pay out of pocket! Long term care can be disastrous to the most thoroughly designed retirement plan, investments, and life savings.
One of the largest potential expenses in retirement is the cost of long-term care. The median cost of a private room in a nursing home was nearly $97,500 in 2017; a room in an assisted-living facility cost $45,000, and 44 hours per week of care from a home health aide cost $49,000. Medicare provides coverage for some skilled nursing services but not for custodial care, such as help with bathing, dressing, and other activities of daily living. But you can buy long-term-care insurance or a combination of long-term-care and life insurance policy to cover these costs.
What’s your plan? STATISTICALLY, WHO NEEDS LONG TERM CARE: The statistics are extremely high for people requiring long term care as they age. The reality is that long term care is not a discussion on nursing homes, but a 100% response to an event or condition. If you become physically or cognitively incapacitated due to disease or an accident, it describes the care you require. If you become incapacitated, your loved ones would be forced to reorient their lives to provide you with the safety and care you required. This can have a devastating effect on their emotional and physical well-being. Without a long term care plan, your spouse or children would have little choice but to disregard their own lives to care for you—whether you wanted that or not.
The Person with Parkinson’s may not be eligible for Long Term Care Insurance, BUT the healthy CAREGIVER certainly should be looking at this as option so that if something happens to the caregiver, both partners are not looking at humongous financial costs.
What’s your plan? We’ve provided a brief overview of the misconceptions regarding (1) Medicare paying for long term care, and (2) the statistical facts regarding the need for long term care as we age.
WHAT IF:Now that we are aware of the statistical need for long term care due to aging. Most of us have told ourselves, “It will happen to someone else… never to me.” You could be right, but what if you are not?
Let’s put the risk of long term care aside for a moment and consider the consequences of providing care over several years. What would be the emotional, physical, and financial toll on those loved ones that you have promised to take care of? If your illness lasts long enough, it could threaten the financial viability of your spouse and children. Remember, “long term” doesn’t just happen to YOU. It happens to the people you love! Do you have a plan?
THE PLAN ~ The value of a plan is that it has two major objectives:
First, to protect your assets (cash, investments, and your retirement portfolio), Second, which may be the most important, to protect your family’s physical and emotional well-being.
This can be accomplished, according to the plan, by allowing your family to hire professionals to provide the required care. Think for a moment of the negative consequences of:
1. Taxes incurred by selling qualified funds at the wrong time,
2. Selling investments in a down market, or
3. Selling assets that are not liquid and thus incurring a loss.
Again, remember, long term care doesn’t just happen to you. It happens to the people you love. What is your plan?
James D. (Jim) Lawless helps his clients plan for financial independence and identify solutions for economic stability through insurance solutions. He is a proud member of PRO’s Wellness Village since August 2019 http://www.parkinsonsresource.org/the-wellness-village/directory/lawless-mba/ Check out his biography, his video and then give him a call