How Will You Keep Up with the Increasing Cost of Care?
Consider the options available to keep up with the increasing costs of care
With 10,000 Baby Boomers turning 65 each day, it’s predicted that by 2030, the United States will have more 65-and-older residents than children.1 The National Institute on Aging reports that people age 85-and-older now constitute the fastest growing segment of the US population.2 But as life expectancy increases, so do health conditions that threaten our independence. According to the US Department of Health and Human Services, nearly 70% of Americans turning 65 today will require some long term care.
The costs associated with the care required as we age—for nursing homes, assisted living facilities and in-home care—are higher than most of us have planned for. On average a private room in a nursing home costs over $8,300 per month, totaling nearly $100,000 per year.3 Your price tag could actually be much higher since costs vary widely across the country.
It’s no secret that costs for nursing homes and assisted living facilities have been on the rise for years, but home care costs have recently increased at an even quicker pace. In just the last year, homemaker services – housekeeping, laundry and companions – rose by 7%, while costs for home health aides rose by nearly 5%.4 The US Department of Labor estimates that demand for home health aides will continue to increase– by 36% over the next 10 years.5 With higher demand as more people choose to age in their homes, substantial increases in costs for home care may make it financially challenging.
While you may think you’re well-prepared for retirement, the possibility that you’ll eventually need help with daily living, coupled with the increasing costs of assistance, make it worth investigating your options.
Long Term Care (LTC) insurance can help protect against the high cost of both facility and in-home care services. The key is to purchase coverage while you’re young and healthy since health conditions may make it impossible for you to qualify later.
LTC insurance varies greatly among providers and there are many flavors to choose from. Life insurance policies with LTC benefits now outsell traditional LTC insurance. These policies are a nice way to hedge your bets since unused LTC benefits can be left to your loved ones.
An adviser can help you evaluate your options and recommend strategies. Don’t wait until you’re in need to develop a plan for your care. Investigate your options today.
1US Census Bureau, 2018.
3Genworth Cost of Care Survey, 2019.
5Bureau of Labor Statistics, U.S. Department of Labor Occupational Handbook, October, 2019.