We invest for a long time during our careers for retirement, but as we approach that golden age, there is a new savings goal to work toward. According to the U.S. Department of Health and Human Services, a person turning age 65 in today’s day and age has almost a 70 percent chance of needing some type of long-term care services and support in their remaining years.
On average, women will need 3.7 years of long-term care compared with 2.2 for men. And while a third of today’s 65-year-olds won’t ever need long-term care, a startling 20 percent will need it for five years or longer.
With those numbers, it’s smart to look ahead and consider planning for long-term care in case you eventually need it. Planning your wishes in case of injury or chronic illness, ensures your needs are respected. Furthermore, putting aside money now or investing in life insurance can provide you with the out-of-pocket funds you may need should the day come when you need to have long-term health care.
Types of Long-Term Care
Not all types of long-term care are equal. Some are more costly because they require one-on-one services. And while a nursing home may not sound ideal, it could be the right choice for a family with limited funds facing a serious condition such as Alzheimer’s disease.
● Assisted living facilities are residential care setting combines housing, support services, and health care for senior adults.
● Continuing care retirement communities incorporate independent living, assisted living and skilled nursing facility on one campus.
● Nursing homes are for those who require constant medical and operational care because of significant deficiencies with activities of daily living.
● Home care allows seniors to remain in their residence while caregivers come to them for daily operations and needs.
Planning Your Long-Term Care Strategy
Power in People
When it comes to these important decisions, one of the best things you can do is talk to your family members and loved ones about your wishes. Knowing your wishes regarding these resolutions can make it easier on them should the difficult time come to put you in a facilitated living situation. Once you’ve communicated your wishes, put everything in writing by executing an “advance directive.”
There are two main types of advance directives: a living will (or instruction directive) and a health care proxy (or healthcare power of attorney). A living will informs medical professionals and family members to which treatments you prefer to receive and what you refuse. A healthcare proxy is a family member or trusted friend you want to make difficult healthcare decisions for you when you are unable.
Assessing Your Risk
You can get some idea of the likelihood of your needs for long-term care by doing an evaluation of your lifestyle and health history. If you have unhealthy habits that are associated with chronic illness, there is no better time to break them. It’s also a good idea to pick up healthy lifestyle choices like exercising and eating a diet full of foods that contribute to longevity. You can also reduce your risk of injury by making home modifications that encourage accessibility and reduce your chances of injury. Finally, have your doctor perform available genetic screenings for hereditary illnesses and conditions that could affect you in the future.
Health Savings vs. Life Insurance
When it comes to paying for the costs of long-term care, there are two very popular options to consider. A health savings account is a tax-free way to put aside money you can access in case of debilitating injury or illness. While your life insurance isn’t the same as a savings account, life insurance can be sold in case you need to cover costs of long-term care. Talk with your financial planner about which option is best for you.
Planning for the possibility of long-term care isn’t fun, but it is important. Talk with your loved ones about your wishes and create an advance directive they can refer to if the time comes. Assess your risk and make lifestyle changes that help prevent chronic illness. Finally, pick a plan to save for out-of-pocket costs such as a health savings account or a life insurance policy.
This guest blog is written by June Duncan.