How Much Will Long-Term Care Really Cost?

​You likely know that long-term care is a possibility in the later years of retirement, but just how likely is it? And what kind of threat does it pose to your assets?
 
Long-term care is extended assistance with daily living activities such as bathing, eating, mobility and cleaning. It sometimes includes medical treatment, but often the objective is simply to maintain a comfortable standard of living.
 
According to the U.S. Department of Health and Human Services, today’s 65-year-olds face a 70 percent chance of needing long-term care in the future.1 Of course, even though care may be likely, there’s no way to predict the type or level of care you may need. That makes it difficult to budget or plan for long-term care costs.
 
Below are a couple of important factors that impact long-term care costs, along with strategies to pay for the care. If you don’t have a plan in place, now may be the time to create one. A financial professional can help you get started.
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Type of Care
 
Long-term care can be provided several different ways. You could receive assistance in your home, from either a family member or a hired in-home aide. You could also move into an assisted living facility where staff is readily available to help.
 
Costs vary based on your location and the type of care you receive. In 2018, Genworth conducted a comprehensive study of nationwide long-term care services and found the following average monthly costs:2

• Adult day care: $1,560
• Assisted living facility: $4,000
• Homemaker services: $4,004
• Home health aide: $4,195
• Semiprivate room, nursing home: $7,441
• Private room, nursing home: $8,365

 
Unfortunately, this care usually isn’t covered by Medicare. You may get partial, temporary Medicare coverage if the care is a result of a specific ailment and includes medical treatment.
 
However, long-term care is usually needed as a result of a chronic condition, like Alzheimer’s. Often when people need care, treatment is no longer effective. The goal is simply to support the individual in his or her final months or years. That kind of custodial care usually isn’t eligible for Medicare benefits.

Duration of Care
 
Another important factor to consider is how long you will need the care. Obviously, the longer care is needed, the more it will cost. You can’t predict how long you’ll need care, but you can make an informed estimate.
 
The U.S. Department of Health and Human Services estimates that a third of seniors will never need care, but 20 percent will need care for more than five years. Also, on average, women need care for 3.7 years, while men need it for 2.2 years.1
 
Consider the average costs above and the fact that you may need care for several months or even years. It’s easy to see how care could drain your assets, potentially leaving your surviving spouse or heirs in a difficult situation.

Fortunately, you can take steps to minimize your out-of-pocket costs. Long-term care insurance can be an effective tool. You pay premiums today, and an insurer pays some or all of your long-term care costs in the future. Many insurers cover care provided in the home, and some even offer a death benefit for unused coverage.
 
Ready to discuss your long-term care strategy? Let’s talk about it. Contact us today at First Fidelity Group. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
 
1https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
2https://www.genworth.com/aging-and-you/finances/cost-of-care.html
 
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18148 - 2018/10/17