Everyone will need long-term care as they retire. It must be taken into account that the term should not always be associated with a nursing home as it is certainly more than that. However, the sad part is that a lot of people are not comfortable with discussing the need to plan for it until it’s too late, which can be attributed to the options not openly communicated.
They may be limited but there are ways to be creative about them and get the long-term care that you deserve.
No one should not waste any time mulling over when is the best time to plan for it. The earlier, the better. Inflation is everywhere, including the rising cost of insurance coverages. To be prepared, here are some smart finance tips that you may want to consider for your future. Let’s get started!
#1. Check government benefits.
It’s time to bust the myth that Medicare will pay for your long-term care. You’re on your own after 100 days. Though, it truly covers some home and nursing home care but it’s only for rehabilitation purposes. It does not cover the long-term care you need.
Another angle that you can look into is taking advantage of veteran benefits if you’re eligible. There is an available pension with aid and attendance which are both necessary when it comes to caring for the elderly. The said financial aid is known as the Veterans Affairs Aid and Attendance or A&A benefit. Though, there are particular conditions that should be met which include a doctor’s evaluation and proof of service.
The amounts also vary depending on whether you’re single, married, or a surviving spouse of a vetetain. Go to the U.S. Department of Veterans Affairs. Veterans in order to get in touch with an aid provider who can help you apply.
#2. Use personal savings.
This is perhaps the most obvious choice but not particularly smart if you weren’t able to save much since it’s expensive. Expenses for care services are expected to increase because of higher labor costs coupled with stricter regulations. Thus, if you’re still at a relatively young age, start looking for the best way to save money to be well prepared for future needs.
This can include self-insuring which is basically saving up to afford out-of-pocket care. You can do this by allotting a certain amount of your investment plan for long-term care costs. Look into available statistics to come up with informed guesses since there is really no fixed figure on how much future care will cost.
#3. Start a health savings account.
In relation to the abovementioned tip, this is helpful to individuals who still have ample time to save up, especially those who qualify for high-deductible health insurance plans. You can deposit more than $3,000 dollars in tax deductible contributions to your account. Moreover, those who are 55 and older can still contribute an additional $1,000 so it would be wise to open this account where withdrawals are also tax-free.
#4. Merge life insurance with long-term care benefits.
There is an option to use a combined life insurance policy with long-term care benefits which is also known as a rider. Similar features can be observed such as inflation protection among other things. Though, your beneficiaries will receive a tax-free death benefit in case you pass away prematurely. You should be mindful of whether the policy has a chronic illness or long-term care rider as there is a big difference between both.
#5. Get reverse mortgages.
A special type of home loan, a reverse mortgage allows a homeowner to convert a portion of their equity in a home into care. You should be at least 62 and have the home as your main residence to qualify for this loan. Of course, you must settle the property taxes as well as you continue living there. It must be noted, however, that the equity of your home decreases as your loan gets bigger.
It would not be wise to for a reverse mortgage if you intend to leave your property to your family once you pass away. Keep in mind that your family may also need to sell the house in order to pay back the money if they can’t settle the loan.
Always assess first your financial needs and strength when planning for your long-term care. These are only some of the ways that can be of help, but there are also other possibilities you can further look into such as combining two or more of these strategies. It wouldn’t hurt to talk to a professional about your financial plans as well so you can better comprehend the best way to go about funding long-term care.
Preparing early will save you unnecessary headaches in the future. Consult with your family as well while exploring your options as they may be able to offer useful perspectives. Don’t waste any time, and start now.