We’re living longer than ever these days, enjoying more years of retirement than our parents did. Longevity is great for those of us who stay healthy. Unfortunately, some of us will live with chronic conditions that will require spending more money for health care expenses and unskilled nursing care.
This type of personal care is usually referred to as Long-Term Care. It is non-medical in nature and involves receiving assistance with basic activities of daily living, such as dressing, eating, getting out of a chair, getting into a car, toileting and more. Whether you want to receive care at home or in a facility, Long-Term Care can be expensive. Neither private health plans nor Medicare pay covers Long-Term Care, so you’ll be personally responsible for the costs unless you’re impoverished and qualify for Medicaid. You may never need this type of care, but 70% of people turning 65 today won’t be so fortunate. That’s why it’s important to prepare for the possibility.
There are several planning strategies to consider. If you’ve been a good saver, you can set funds aside specifically for Long-Term Care expenses. You can also establish an irrevocable trust to shelter your assets, but you must have the trust in place for at least five years before you need care. Insurance in the form of a dedicated Long-Term Care policy or a hybrid life-Long-Term Care policy can be another option. The younger you are at the time of application, the better your chances of qualifying for coverage.
It’s essential that you plan. Doing nothing can jeopardize the assets you’ve accumulated, the legacy you can leave behind, and the lifestyle and financial security of your spouse.
How We Can Help You Make Long-Term Care Decisions
Johnson Brunetti can help you choose a Long-Term Care planning strategy that’s appropriate for your financial situation. We can talk through your potential need for care, discuss where you’d prefer to receive any care that’s needed, and who you’d like to provide it. We may also suggest that you have a frank discussion with your spouse or family members about the financial and emotional aspects of a possible Long-Term Care event.
We may recommend self-funding your care, purchasing insurance coverage, or establishing a trust to protect your assets. We’ll also advise you about next steps, whether it’s to suggest how to invest the savings earmarked for care, describe options for suitable insurance coverage, or review the pros and cons of establishing an irrevocable trust. You’ll become knowledgeable about your options so you can make an informed decision about the path that’s best for you.
As we work together, you’ll get answers to important questions:
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What exactly is Long-Term Care?
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What are my odds of needing it?
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How much does Long-Term Care cost?
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How can I pay for the care I might need?
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Do I have a choice of care options?
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What will the emotional and financial impact be on my family?
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How soon do I need to plan for Long-Term Care?
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Would it be smart to purchase insurance? What type? What will the premiums be?
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If I already own a Long-Term Care insurance policy, is it a match for my needs?
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Can I shelter my assets from Long-Term Care costs by using a trust?
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What’s better: a revocable or irrevocable trust? Why?
No one wants to think about Long-Term Care needs, which is why so many people postpone planning. The problem is, the longer you delay, the more limited your planning options will be. Taking action now allows you to understand the financial challenges that Long-Term Care may present and implement strategies and solutions that are best for your situation.
Our Philosophy & Approach to Long-Term Care Planning
1. We encourage you to view Long-Term Care planning as an essential piece of your overall financial plan
In our opinion, a Long-Term Care plan shouldn’t exist in isolation. We make it an integral part of retirement income planning and view it in the context of your existing savings and projected income and expenses.
2. We’ll help you review your Long-Term Care options realistically in light of your family situation and personal finances
It’s important to consider the impact of a Long-Term Care event on the finances and emotions of your entire family. We suggest you involve them in the planning process. We believe it’s better to inform them of your decisions and expectations, so they know what role, if any, they’ll play in providing hands-on care or helping you pay for services.
3. We’ll point out the drawbacks of procrastinating and motivate you to start planning now
The longer you wait, the fewer your options will be. We want to provide essential information and streamline the planning process, so you’re comfortable making the necessary decisions about your future care.
