One person every 10 seconds.
According to SeniorLiving.org, 2021 that is how many Baby Boomers are hitting age 65. That is 10,000 per day and is expected to continue at that pace until 2030. By the year 2060, 23% of the population will be 65 or older while life expectancy is expected to rise as well.
The aging population brings some challenges with it as at least 70% of seniors are expected to need long-term care at some point. (Source: ACL.gov; 2022). Statistically speaking, LTC will be needed for about three years and women tend to need it longer; and 20% will need it for more than five years. Thus, understanding long-term care and your options is an important part of your financial plan.
We tend to think of skilled nursing care immediately when LTC is mentioned. But, it can also include assisted living facilities, home health care and even respite care. It all depends on the level of help needed for activities of daily living required. The level of care and your geographic region have a significant impact on the cost.
So, how can we fund the need if it arises?
- Self Insured: Due to a lack of planning, many individuals end up with this strategy which is depending upon personal savings and investments to fund any long term care needs. Obviously, this can have a devastating impact on your retirement strategy.
- Medicare: This can be a partial solution as it does cover some skilled nursing care but with tight restrictions for a short window of time.
- Long-Term Care Insurance: A long-term care policy can cover all levels of care, from skilled care to custodial care to in-home assistance. Many find it to be an appropriate way to protect themselves and their loved ones from the potentially devastating cost of long-term care.
A Long-Term Care policy can be complex. Policies offer a wide range of benefits and premiums so it is important to make sure you understand the limitations and features of the policy. This is where we can help! If you would like to discuss adding LTC to your financial plan give us a call.
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