If you’re approaching retirement, you probably know the threat that long-term care represents. It’s a likely outcome for many retirees. The U.S. Department of Health and Human Services estimates that 70 percent of today’s 65-year-olds will need long-term care at some point in their lives.1
While every retiree should plan for long-term care, it’s a unique planning challenge for women, primarily because women live longer than men on average. The Society of Actuaries estimates that a 65-year-old woman has a 50 percent chance of living to age 90 and a 25 percent chance of living to 96. A 65-year-old man, on the other hand, has the same odds of living to 87 and 92, respectively.2
A longer life span is usually a good thing, but it can make retirement planning more complex. It means your assets have to last over a longer period of time. It also means you may face greater health risk in the later years of your life. You may spend more time dealing with Alzheimer’s, dementia or other cognitive issues.
There’s also the fact that women are more likely than men to live alone in retirement. A study from Pew Research found that 32 percent of all women over age 65 live alone. That’s down from a previous high of 38 percent, but it’s still much higher than the 18 percent of men in that age group who live alone.3
Fortunately, there are steps you can take to minimize your risk and plan ahead for long-term care. Below are a few steps to consider. If you haven’t developed a long-term care strategy, now may be the time to do so.
Make your wishes known.
Married couples have the benefit of having another person to serve as a decision-maker and advocate. If a married woman is unable to make or communicate her wishes, her spouse can do it for her.
However, a single or widowed woman in retirement won’t have that benefit. If you suffer from a cognitive condition and are unable to manage your finances or participate in your health care decisions, someone else will have to do that for you. It could be a grown child, a sibling or some other loved one. Without guidance or instructions from you, this person could make decisions that go against your wishes.
You can avoid that risk by creating advanced planning documents. For example, a power of attorney lets you designate someone to make financial and health care decisions on your behalf. A living will tells your doctors what kind of lifesaving measures you want taken. You can also use a trust to provide specific management details for your assets.
Investigate free or low-cost care.
Long-term care is often a progressive process. You may start by needing occasional support with things like cleaning, errands and meal preparation. As your health declines or your condition worsens, you may need more intensive support with things such as bathing or mobility. You may even need to move into an assisted living facility so you’ll have full-time support.
You may be able to reduce the financial risk by taking advantage of free or low-cost resources in the early stages of care. Perhaps your church or other community group offers support for seniors. Talk to your grown children or other relatives about what support they may be able to provide. If you can develop a support system for the early stages of care, you may be able to delay more costly services.
Consider long-term care insurance.
According to the U.S. Department of Health and Human Services, the average woman will need long-term care for 3.7 years in retirement.1 That care, whether provided in the home or in a facility, can cost thousands of dollars per month.4
Unfortunately, most long-term care services are not covered by Medicare. They may be covered by Medicaid, but only after you’ve depleted your assets. If you do transition to Medicaid coverage, you may be forced to move into a facility.
Long-term care insurance can help you protect your assets and get the level of care you want. You pay premiums today in exchange for future coverage of some or all of your care costs. Most policies cover a wide range of care, including assistance in the home and even home modifications for things like hospital beds or wheelchair ramps. In fact, long-term care insurance could help you stay in your home rather than move into a facility.
Ready to plan your long-term care strategy? Let’s talk about it. Contact us today at Peak Financial. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
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18148 - 2018/10/17