November 8, 2022

What Are Your Long-Term Care Options?

They say that life expectancy is on the rise. And while that may be true, what they don't always mention is that those extra years come with a price tag. According to the National Institute on Aging, about 70% of people over the age of 65 will require some type of long-term care services in their lifetime.

With people living longer and longer, the demand for long-term care services is only going to increase. But what exactly is long-term care? And what does it mean for you and your wallet? Let's take a closer look and for all of your retirement FAQ's, check out our blog for more information!

What is Long-term Care?

Long-term care is a type of care that is provided to someone who is unable to perform activities of daily living (ADLs) on their own. These activities include things like bathing, dressing, eating, toileting, and transferring (from a bed to a chair, etc.).

Long-term care can be provided in a variety of settings, such as at home, in an assisted living facility, or in a nursing home. It can also be provided by a variety of caregivers, such as family members, friends, or paid professionals. Long-term care facilities are designed to meet the needs of those who require long-term care. They provide a safe and comfortable environment for residents, as well as the necessary staff and resources to provide quality care. If you or a loved one are in need of long-term care, research your options and select the best solution for your individual needs.

The Cost of Long-term Care

Long-term care is not cheap. In fact, according to Genworth's 2020 Cost of Care Survey, the average annual cost of long-term care is $87,600 for a private room in a nursing home. That's nearly $8,000 per month!

Of course, most people don't need (or want) 24/7 nursing home care. In-homecare services are typically less expensive but can still add up quickly. For example, hiring a home health aide for just four hours per day five days per week will set you back nearly $50,000 per year. So what's a cash-strapped senior to do? One option is to move into a long-term care facility. While the cost of long-term care varies depending on the type and setting of care that is required, it is generally cheaper than in-home care. For example, according to the AARP, the median cost of a private room in a long-term care facility is $85,775 per year. That's still a lot of money but it's more affordable than in-home care.

Another option is to purchase long-term care insurance. This can help cover the cost of long-term care if you ever need it. Of course, long-term care insurance is not cheap either but it may be worth the investment if you are concerned about the high cost of long-term care.

How to Prepare for the Cost of Long-Term Facilities

While the cost of long-term care can be daunting, there are several ways to help offset the expense. One way is to purchase long-term care insurance. An insurance policy will cover some or all of the costs associated with long-term care services. Of course, like any insurance policy, there are premiums that must be paid which can add up over time so it's important to weigh your options carefully before purchasing a policy.

Another way to prepare for the cost of long-term care is to save money specifically for that purpose. This can be done through a dedicated savings account or even by investing in assets that can be used to pay for long-term care expenses later in life (such as a life insurance policy with an accelerated death benefit rider).

Medicare vs. Medicaid

Most people are familiar with the two main types of health insurance: Medicare and Medicaid. But what many don't realize is that there are also insurance options for long term care. Medicaid is a government-funded program that provides free or low-cost health care for those with low incomes or limited resources.

You have options.

Medicare, on the other hand, is a federally-funded health insurance program that covers seniors and those with certain disabilities. While both Medicare and Medicaid offer long term care benefits, they differ in a few key ways. For instance, Medicaid covers more types of long term care services than Medicare does. Additionally, Medicaid has income and asset eligibility requirements that Medicare does not. As a result, it's important to understand the differences between these two programs before making any decisions about long term care insurance.

Types of Long-Term Care Facility Options

In-home Care

In-home care is a type of long-term care that is provided in the comfort of an individual’s own home. In-home care can be an attractive option for those who wish to age in place and maintain their independence. In-home care can be provided by family members, friends, or professional caregivers.

Assisted Living Facilities

Assisted living facilities are residential communities that provide assistance with activities of daily living, such as bathing, dressing, and eating. Assisted living facilities typically offer a variety of amenities and services, such as social activities, transportation, and 24-hour security.

Nursing Homes

Nursing homes are long-term care facilities that provide around-the-clock nursing care and medical supervision for individuals who are unable to live independently. Nursing homes offer a variety of services, including skilled nursing care, rehabilitation services, and social activities.

Preparing for Your Future

No one likes to think about getting old and needing help. But the truth is, we all face the possibility of future health problems, whether it's catching a cold or developing a chronic disease. This is why preparing for your future is so important. By taking steps now to plan for retirement and long-term care, you can help ensure that you'll be able to enjoy your golden years to the fullest. Here are a few things to keep in mind as you start planning for your future:

  • Make sure you're saving enough for retirement. The sooner you start saving, the better. If you haven't already started saving for retirement, now is the time. Even if you can only save a little bit each month, it will add up over time.
  • Think about how you'll pay for long-term care. Long-term care can be expensive, so it's important to have a plan in place for how you'll pay for it. Whether you purchase long-term care insurance or plan to use savings or investments, be sure to do your research and make a decision that's right for you.
  • Keep your health in mind. Maintaining good health is essential for enjoying a long and active retirement. Be sure to eat healthy, exercise regularly, and see your doctor for regular checkups. These healthy habits will help ensure that you're able to enjoy your retirement years to the fullest.

As life expectancy increases, so too does the likelihood that you will need some type of long-term care in your golden years. While the thought of needing help with activities of daily living may be unpleasant, it's important to plan (and save) for the potential costs now so that you're not caught off guard later on down the road. This road can be tough to walk alone on, but we are here to support you through every step. Contact an advisor today!


This page is a publication of Fiat Wealth Management, LLC. The firm is registered as an investment adviser and only conducts business in states where it is properly registered/notice filed or is excluded from registration requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability.

The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation.

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