While this idea may be hard to imagine for many, but many people need additional support and assistance later in life. In fact, the Urban Institute and the U.S. Department of Health and Human Services both concur that more than half of 65-year olds today will require assistance in their lifetime. The percentage increases to 90% if we are talking about at least one spouse requiring long term care.
When you look at the hard numbers of what this assistance costs, you will see how quickly it could devour a healthy nest egg. For example, nursing home care costs families $90,000-$100,000 per year.
According to the 2019 Genworth Study, here are the yearly costs of that assistance:
Homemaker Services: $51,480
Homemaker Health Aid: $52,620
Adult Day Health Care: $19,500
Assisted Living Facility, private one bedroom: $48,612
Nursing Home Care, semi-private room: $90,156
Nursing Home Care, private room: $102,204
Although many will need help for less than two years, about 14% will require care for more than 5 years. For this long-term care, traditional health insurance and medicare will not pay for prolonged visits. These insurance plans only cover short term care, and they do not cover custodial care and help with day-to-day tasks.
As many retirees are on a fixed income, this can quickly reduce a healthy savings account.
Many families seek long term care insurance for the peace of mind that if they should require that care, they will not run out of savings due to long-term assistance costs. Traditionally, people will purchase this insurance for their family in their 50s and 60s.
If you are interested in learning more about long-term care insurance, simply hit reply to this message or call our office (714.340.0295) and we will be happy to help you.