When planning for retirement, employees must consider various future expenses. This includes housing, hobbies and other pastimes, and health care.
It’s no longer a secret that medical costs increase with age. And it’s a well-known fact that Medicare health insurance is by no means free, so it’s important that workers put money aside to cover their future medical bills, be it for their 401(k) and IRA. By topping up or funding health savings accounts.
But a big misconception about Medicare is that coverage is ubiquitous. That’s hardly true. not only medicine no Include the bill for common services like eye exams and dental care, but it also doesn’t cover a huge expense that can take a toll on seniors’ finances — long-term care. And the sooner you know about it, the sooner you can put together a plan to avoid unexpected costs for you and your loved ones.
avoid economic shock
It’s estimated that 70% of seniors will require some form of long-term care at some point in their lives, and the costs can be astronomical.
Last year, the average annual national cost of an assisted living facility was $54,000, according to Genworth. But that’s just the average cost, and in some parts of the country the cost of assisted living is much higher.
Then there are nursing homes. Last year, the nationwide average annual cost of a home was $108,405. And while domestic help is offered at a lower rate, the average annual cost for this service last year was $61,776.
Now you might be thinking that if you need long-term care, you can just check your Medicare plan to get the bill. But it’s important to know that Medicare generally will no Covers the costs of long-term care, mainly because it does not provide nursing care or help with everyday life.
What Medicare may pay for care at home or in a nursing facility after an accident or illness. But there’s a big difference between this and the caregiving — one that seniors and their loved ones often leave on the shelf for extravagant bills.
Increasing your savings is one way to help cover long-term care costs. However, an equally important step is evaluating your options for long-term care insurance.
Employees are generally recommended to apply for this insurance from their mid-50s. Delaying these claims often means you’re stuck with higher premium rates.
Long-term care insurance is no longer perfect. Some policies offer limited coverage and the cost of taking out the policy is huge. But when you look at the numbers above, it becomes easy to argue that long-term care insurance is a necessary step to keep yourself and your family financially secure.
In a recent survey conducted by HGC Secure, only 10% of respondents said they had long-term care insurance. Admittedly, this was a limited survey of 402 people aged 40 to 64, some of whom are too young to have such insurance.
The point, however, is that by your mid-50s you really should have long-term insurance on your radar. While it’s an expense you might think you can’t afford, the reality is that you need more of a long-term care type.