May 4, 2022
If you’re concerned about paying for long-term care in retirement or are wondering the best way to pay for it, this episode is for you! This week, I’m joined by Nancy Simm of Highland Capital Brokerage to discuss retirement longevity, the types and costs of long-term care, and the best ways to pay for them.
You will want to hear this episode if you are interested in...
- Getting to know Nancy Simm [1:13]
- The five ways to pay for your long-term care in retirement [1:58]
- What is long-term care? [2:54]
- Identifying the costs of long-term care [5:42]
- Diving into traditional long-term care products and policies [7:58]
- How do I apply for long-term care and when is the best time to do so? [14:25]
- What is an elimination period and shared benefits? [19:24]
- Final thoughts on traditional long-term care plans [22:32]
Understanding long-term care
Most people assume that long-term care is for people in their 90s with health issues. However, long-term care plans can be used at any age for several reasons including early-onset degenerative diseases, strokes, and injuries due to accidents. The reason is irrelevant as long as there is a long-term care need that inhibits the activities of daily living. Nancy defines these activities as bathing, eating, dressing, bathroom use, continence, and transfer. Difficulties in these areas don’t have to be permanent. As long as care will be needed for at least 90 days, it is considered long-term.
For example, a bone fracture that takes a month or two to heal would not be considered a long-term care situation even if it prevents you from completing the activities of daily living. Long-term care plans focus on care needs longer than 90 days, but they go beyond physical disabilities. Diseases like Alzheimer's are another reason to look into long-term care because while patients may be physically capable of completing tasks, their reduced cognitive ability makes them a qualified candidate.
Covering the cost
Before deciding whether to pursue a long-term care insurance policy, it’s important to understand the out-of-pocket costs of long-term care. The Connecticut and New England areas have some of the highest long-term care costs in the country. Average home health care costs are between $5000 and $6000 per month for a few hours of care per day. While most retirees prefer to receive long-term care at home, sometimes that isn’t possible when the patient’s safety is in question. Nursing home costs can average around $15,000 per month for full-time care. A huge benefit of long-term care insurance policies, aside from saving your bank account, is that they cover any kind of care required and are no longer limited to a specific care type, whether in-home or at a facility.
Another cost-saving option is to retire in another state where long-term care costs are cheaper. If you live in Connecticut now but are debating retiring elsewhere, this may be the detail that gets you to reserve the moving truck. Midwestern states and most of Florida cut Connecticut's long-term care costs in half! Moving may be the best option for those looking to cut costs who aren’t tied down to their current area. For more info on long-term care plans and how to pay for them, listen to this episode!