Long-Term Care Costs: Don’t Expect Medicare to Help

Long-Term Care Costs: Don’t Expect Medicare to Help

Most people over 65 will at some point need help with daily living tasks, such as bathing, eating or dressing.

Many will rely on unpaid care provided by spouses or children. Still,

  • More than one-third will spend time in a nursing home, the annual cost of a private room in which is currently north of $100,000;
  • Four out of ten will choose paid care at home, the annual cost of which is now more than $50,000;
  • Overall, half the people older than 65 will incur long-term care costs, with about one-sixth spending more than $250,000.

Medicare and private health insurance plans normally don’t cover such so-called custodial expenses, which can quickly wipe out the $126,000 in retirement savings that people aged 65- 74 have. People with exhausted savings could wind up on Medicaid.

People who live alone and are in poor health, or those with a family history of chronic illness have a greater-than-average likelihood of needing long-term care. Women face special risks, since they tend to outlive their husbands, thus left without unpaid care providers. If a partner’s paid care wipes out the couple’s savings, the remaining woman could potentially face decades living on nothing but Social Security.

Everyone approaching retirement age should consider their potential risks and have a plan to deal with long-term care expenses, financial planners say. The earlier you start planning, the more choice and control is available.

The options include:

Long-term care insurance, home equity, contingency reserve, spending down to Medicaid.

For more information, please read:
This is how much long-term care could cost you, and don’t expect Medicare to help | MarketWatch

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