5 Tips for Long-Term Care Financial Planning
Many people, understandably, don’t want to think about a time when they’re no longer able to solely take care of themselves. However, the reality is that about 70 percent of retirees will need long-term care at some point, so it’s more than likely you will as well. When you start long-term care financial planning, it can be incredibly frustrating. You might not even know when or where to begin. But you know that if you don’t plan ahead, long-term care can become quite a burden.
That’s where we can help. Read on for some expert tips on how to best go about long-term care financial planning.
1. Early Preparation Will Pay Off
Don’t make the mistake of waiting too long. The earlier you start your long-term care financial planning the better. Even if you’re not sure you’ll need it, it’s smart to plan, just in case. By planning ahead, you will give yourself more time to learn about long-term care solutions, including the best options available in your area. It will also give you time to save for the potential costs.
In general, you want to make these important decisions and plans when you’re in the right state of mind. If you wait until it’s a problem, it could really backfire. Most people don’t make their best decisions when they’re under significant stress. Or you could wind up leaving the choices to your loved ones, without them knowing what you really want.
You don’t want to leave the financial burden of your care for your loved ones to pay because you didn’t plan properly. And financial problems aside, not preparing can cause terrible stress and emotional strain on them as well. But by preparing, you give your family time to learn what long-term care you want and how they can work with you to achieve that.
The Mayo Clinic emphasizes how important early planning is and also offers a thorough guide on how to go about it on their website.
2. Find a Financial Planner or Independent Financial Advisor
Make sure the representative you choose is properly licensed and qualified. And do some research so you don’t end up with a financial planner who has a lot of complaints or has had disciplinary suits filed against them. When researching and contacting different financial planners, make sure to ask what they know about care fees specifically.
If you need help finding a financial advisor, there are certain national organizations that can help. For instance, check out the National Association of Personal Financial Advisors or the American Institute of CPAs website, where you can search to find an advisor by your zip code or location.
Don’t make any final, major financial decisions before at least consulting with one. They’re the experts for a reason. They can help you with setting up your will, choosing a trustee, and naming a designated power of attorney.
3. Location Matters
Keep in mind that the specific costs of long-term care will vary depending on location. Take the time to look at what options are available in your area, including the different types of housing. You also might want to look at what care options could allow you to still live at home. You may automatically imagine a nursing home or worry you’ll end up in a place where you have no independence. But that isn’t all that’s out there.
You can choose a senior living community that both meets your care needs and feels like home, and for a price that’s within reach. BridgeWater Assisted Living communities, for example, offer quality amenities and care at an affordable price. By considering your options ahead of time, you can estimate your cost of living once you enter that stage of life and better prepare.
There are other location pros and cons to consider when you’re planning. Look into the quality of health care and its cost in an area. Find out if the state taxes Social Security benefits—37 states don’t have tax on Social Security. Choosing senior living in a location that has affordable healthcare and tax benefits could save you hundreds of dollars a year.
4. Research and Plan for the Different Long-Term Care Costs
There’s no one-size-fits-all cost, and there are specific factors that add up to the total charge for long-term care. For instance, do you want a private room? Or will you be alright with a semi-private room, which is generally less expensive? Does the care community provide transportation, or will you need to pay to maintain a vehicle? These costs can also include the level of care you need (such as memory care or assisted living), specific types of services, and more.
5. Figure Out What Your Financing Options Are
Some think that long-term care financial planning consists simply of obtaining health insurance. As you can see, that’s not the case. The majority of the time, long-term care is paid for by a combination of resources: your health insurance, your personal funds, and a variety of financial assistance. You’ll want to look specifically at what type of care your insurance will cover. When you look at various residences for long-term care, make sure to ask what insurance and assistance they accept and for what services.
These can include using VA benefits, life insurance, long-term care insurance, disability insurance, funds from a reverse mortgage, or Social Security, in addition to health insurance. Do you qualify for Medicaid? Not all senior living communities are Medicaid-certified; does the community you’re looking at? Ensure your available financial solutions match your living options.
These tips should help your long-term care financial planning go much more smoothly. Hopefully, you feel more at ease as well.
If you’re near Phoenix, AZ, we hope that when you do need long-term care, you’ll consider one of the BridgeWater Assisted Living communities. Take a look at our services and care options, talk to our community benefits advocate about financial solutions available, and even take a tour. There are community descriptions and other helpful information on our website. Please let us know if there are any additional questions we can answer for you.
