I have retirement income of $5000/month, my house is paid for, no loans due, and I have $600,000 in savings earning 5% interest (you wish). I don’t need any Long-Term Care (LTC) insurance!
Let’s assume you are correct. And let’s assume that one of you has a stroke or dementia that requires care in an assisted living facility’s memory care unit which costs at least $7500/ month.
The cost of LTC services is increasing at a rate of 5% compound
You are earning 5% growth on your savings
The cost of living goes up 3%
Your income taxes are 15% and let’s forget about state income taxes.
You retain $$2250/month for the at home spouse, and pay for care with the remainder of your income, interest on savings, and pull the shortfall from principal.
You are good for 6 years, and apply for Medicaid (welfare) in the 7th year.
If the bulk of your savings are in a qualified account like an IRA or 401k you will run out sooner.
If you are not earning 5% interest on your nest egg, you will run out sooner.
If the cost of care is more expensive, you will run out sooner and apply for Medicaid.
You don’t need LTC insurance, until you do. You must buy it while younger and healthier so you can get it and afford it for when you need it, kind of like car insurance.
If you think LTC insurance is expensive, try going without it!
Call www.TheLongTermCareGuy.com at (920) 884-3030 and investigate how much or little will solve your worries. Don’t lose sleep worrying, address the problem.