Are You Concerned About How You Will Pay For Long Term Nursing Care?

You’ve read that nursing homes can cost up to $8500 a month, assisted living half of that, and home care anywhere from very little to more than the nursing home.  Your first thought might be there is no way I can afford such care.  That is often an accurate first impression.  However, there are strategies that can help.

First, consider how much of the cost you may be able to bear on your own.  When someone needs care, lifestyle changes, often considerably.  If one of a couple needs care there may be no need for a second car or pickup truck.  That can equate to less mouths to feed.  Then there are the toys; boat, motorcycle, snowmobile, camper, etc.

The travel and fun budget will also shrink with no trip to Branson, a cruise, a bed and breakfast weekend, etc.  Note: you should be having fun while you are healthy as you only go around once in this life.  Thus with basic necessities budgeted for, less gasoline, insurance, tires, trips, toys, etc., you may find that a significant amount of income may be freed up.

Long Term Care insurance is a great way to pay for care, if you purchase it while still healthy enough to get it.  The trick is to investigate it when it becomes affordable, and take into account the budget changes mentioned above and not buy too much.  Most long term care is NOT done in nursing homes, so an amount that, along with available income, can cover home care or an assisted living facility may be sufficient for many.  And don’t forget the IRA or other nest eggs.  Even if you want to preserve them for a spouse or heirs, you can still use the income (yield) they produce.  I realize interest rates are not the highest right now, but every little bit helps.

Medicare does not pay for long term care.  It will pay for a short recovery stay in a skilled nursing facility following 3 days in the hospital (and you know how quickly they get you out), but that is only for your active recovery for a very short time.  Medicaid can pay for care, but only after you are impoverished, meaning you have spent all available assets, cash, savings, real estate, etc.  It is a last resort to be avoided if possible.  If this becomes necessary, do plan to set aside some money in an irrevocable trust to pay for funeral, which most states allow (life insurance must be cashed in to get Medicaid).

There is a strategy that uses as its base an annuity, an insurance product that converts a sum of money into a monthly income for life.  Obviously the older you are, the smaller a check you write to receive the needed monthly check for life in return.  One company has fine tuned this for long term nursing care, however, and takes health into consideration.  If you need care, your health is probably not as good as the average person of your chronological age.  Thus your shorter life expectancy, when taken into account, means a smaller sum may buy you the income you require for the rest of your life.  The worse your health, the better the deal.

If funds are not available in your regular bank, do not discount the “bank of house” (reverse mortgage).  Since you can’t take it with you, why not use its equity to help you stay at home in it?  Some people have even used home equity through a reverse mortgage to pay for long term care insurance.  This gives them a much better chance to remain in the home and have money left over at the end to pass on.

For more information on what is best for your situation, contact  Romeo Raabe at (920) 884-3030 or (800) 219-9203

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