While the long-term care you’ll need in the future probably doesn’t feel like a top priority today, it is something that you should be taking into consideration sooner rather than later. Up to 70% of 65-year-old Americans will need this care (1), and knowing that costs can be staggering, you should start preparing as soon as possible. The quality of long-term care you receive is dependent on your means of paying for it.
Where Do You Picture Your Care?
When beginning to plan for your eventual long-term needs, you must first consider where you’d like to receive this care. Everyone’s preferences are different, so take time to think about the benefits of at-home care, assisted living facilities, or nursing homes. Maybe you’d prefer to stay where you are and have caretakers come to you, or maybe you’d be more comfortable in a home where treatment and help are more readily available. You cannot predict the level of care that you will require, but having an idea of where you’d like to be will help with your savings plans.
What Will the Price Tag Look Like?
You can’t put a price on your health and happiness, but you can at least try to budget for it. A lot of people have most of their funds for something like long-term care in a retirement plan like an IRA or 401(k), and they are both good options for where to pull from. If you choose to pay out of pocket, though there are other options, you should keep in mind that you will also have to pay taxes on whatever you withdraw. In this case, you are looking at a median annual cost of $51,600 for an assisted living facility and $105,850 for a private room in a nursing home. (2)
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Steward Partners offers insurance products in conjunction with its licensed insurance agency affiliates.
Since long-term care insurance is medically underwritten, you should not cancel your current policy until your new policy is in force. A change to your current policy may incur charges, fees, and costs. A new policy will require a medical exam. Surrender charges may be imposed, and the period for which the surrender charges apply may increase with a new policy. You should consult with your tax advisors regarding your potential tax liability on surrenders.
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Steward Partners offers insurance products in conjunction with its licensed insurance agency affiliates.
Individuals are encouraged to consult their tax and legal advisors (a) before establishing or changing a Retirement Account or Retirement Plan, and (b) regarding any potential tax, ERISA, and related consequences of any investments or other transactions made concerning a Retirement Account or Retirement Plan. Tax laws are complex and subject to change.
Steward Partners, its affiliates, and its Financial Advisors do not offer tax or legal advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. You should always consult your own legal or tax professional for information concerning your situation.
