Long term care costs remain a big problem for many retiring Americans. This is why married couples must start creating a strategy to deal with the care expenses heading their way. However, this presents a dilemma:
“How do my spouse and I start planning for long term care costs?”
Recently, we shared a guide to planning for retirement. Let’s continue the conversation by tackling retirement’s wild card: long term care.
Bear in mind that care needs differ for each person. With married couples, you would have to plan for two sets of long term care expenses and take into consideration two preferences.
Also, did you know that women typically need more long term care services than men? Studies point out that women need 3.7 years while men only need 2.2 years.
On top of that, they tend to live longer and yet have fewer financial resources to cover these extra years. As the nation’s caregivers, women typically end up providing the care that their husbands need. Often, the expenses and care costs eat away their savings and assets, leaving her with little funds to fund her own care.
There are various long term care options available today, and each one has a corresponding rate. On top of that, these prices differ in each state if you refer to the average cost of long term care—some even reach $200,000 annually!
Moreover, keep in mind that Medicare and Medicaid—the programs that many rely upon to fund their care expenses—have strict guidelines in providing coverage.
Although many baby boomers have assumed that Medicare will cover the costs of long term care, it does not cover most of the expenses. At most, it pays for some part-time care for individuals who are homebound or short-term skilled nursing care. It may also provide funding for the first 100 days in a nursing home. After that, you would have to pay for the expenses out of pocket.
Medicaid pays for long term care costs. However, the program is primarily created to assist people with limited income. This means that many Americans would have to spend down their assets and savings to qualify for coverage.
Keep in mind that you and your spouse need to be aware of how much the services are in your area. If the rates are too much to afford, then would it be better if you moved elsewhere? Are there available ways to help manage the costs?
One option that you and your spouse ought to consider in funding care is long term care insurance. Over the years, these policies have received mixed reviews. However, the industry is adapting rapidly. In fact, a recent survey pointed out that 90% of policyholders are satisfied with the coverage that their policies provide.
Moreover, these insurance policies have the Shared Care option.
The details vary with each insurance company, but the idea is that couples can share a set of benefits by being a rider in the each other’s plans. This means that if you or your spouse runs out of benefits, you can dip into each other’s plans to cover the expenses. This provides a better alternative than having to fund the costs out of pocket once individual coverage stops.
Planning for long term care costs is a tricky task to accomplish. However, it can be managed better if you are both on the same page. Plus, couples have one advantage:
They can look to each other for support and guidance. By working together, they can accomplish so much more.
It is important to note, however, that you and your spouse need to start planning now. You can begin the process by shopping around for long term care insurance quotes. This way, you get to see your options.