Plan for potential long-term care expenses.

Long-term care costs can be a significant drain on your retirement nest egg. You can do an excellent job accumulating enough retirement assets to retire comfortable only to see it disappear quickly after just a few years of long-term care expenses. Ask any friends or family members what their experience has been caring for a loved one needing long-term care services and you will quickly understand this is a real threat. In fact, it has been estimated that about 70% of 65-yr olds will need some form of long-term care.

When thinking about how to potentially pay for long term care you should be aware that Medicare doesn’t cover long-term care expenses. In general, Medicaid requires you to spend down practically all of your assets to qualify and there is a five-year look back period on assets that were gifted to others.

Your options are to pay out of pocket using your retirement nest egg, spend down assets in order to qualify for Medicaid, or purchase long-term care insurance to protect against this potential risk. You can learn more about long-term care insurance using resources and information found at  lifehappens.org or longtermcare.gov.

Here are a few guidelines to help you choose the best way to pay for any future long term care related expenses:

  • If you anticipate your retirement assets will be somewhere between $200k to $2-3 million in assets, you may want to consider purchasing long-term care insurance coverage.
  • Check to see if your state offers a long-term care partnership program. These programs allow you to keep an additional amount of assets equal to the actual insurance coverage purchased through the long-term care insurance program and you will still qualify for Medicaid if you use up all the benefits.
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Navigate the Eldercare Journey... Without Going Broke!

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