November 3, 2018

What Families Should Do to Plan and Pay For Their Long-Term Care Needs

November is National Family Caregivers Month and is celebrated to honor and recognize the dedication and loving care of family members who take on the role as caregivers.

Long-term care is not only an individual issue; it concerns the entire family. Considering that many adult children have to care for their aging or disabled parents, as well as shoulder the costs for that care, the entire family suffers. The majority of adults don’t have the expendable income to spend on their parents’ long-term care, but early planning and understanding all available options can save your family from the stress of paying for long-term care.

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Planning for long-term care

Just as you would do for retirement, planning for long-term care should begin when you’re young and making a full-time income. Regardless of how you feed your retirement fund, long-term care should be included with the cost of living expenses, along with medical bills from illnesses that could befall you in your senior years. You should be saving 10-15 percent of your income as early as your 20s. You probably didn’t think that you’d have to start planning for retirement 40 years early, but with medical advances and life expectancies increasing, Americans are living longer than before. Living longer is a great thing; finding ways to pay for it is not.

There’s no sure way to assess the likelihood you or a loved one will require long-term care, but assume that you will need it. Long-term care is not considered medical care, which is typically covered by health insurance or Medicare. Custodial care is everything else you need to get through the daily activities of life, such as using the bathroom, getting dressed, and eating. Long-term care is usually required as a result of a chronic illness, debilitating injury, or another disability due to age.

If you have a disease that will eventually lead to disability, there’s a good chance you will need long-term care. If you’re healthy with no history of serious illnesses in your family, you could still end up needing long-term care. Think about the lifestyle choices you are making now, such as risky activities and unhealthy eating. How can you reduce the risk of injury or the onset of illness in ways that are within your control? As a senior, you can modify your home to make it less accident-prone. What about risk factors that are out of your control, like hereditary illnesses and conditions? Visit your doctor and test for the risk of illnesses for early detection, prevention, and treatment.

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Paying for long-term care

As you think about how to pay for long-term care, look at how close you are to retirement. What’s important is that you have a plan to pay for the costs of long-term care, whether you’re in your 20s or in your 60s. There’s the option to start early and save each month so you’re not scrambling in your senior years. The average cost of long-term care in one’s lifetime is $138,000. Divided across 40 years of earnings, you’d have to save $3,450 per year, or roughly $288 a month. If you’re unable to put aside that amount each month or if you’re already past age 50, consider purchasing long-term care Insurance.

Let’s say you’re already at an age where saving isn’t an option. What can you do now? Additional coverage like Humana Medicare Advantage plans offer the same coverage as Medicare Parts A and B, which cover hospital insurance and medical insurance, respectively. Some Medicare Advantage plans include benefits for prescriptions, dental, vision, fitness services, caregiver support and a 24/7 nursing advice line.

The key to long-term care is planning early, long before needing it. Many retirees didn’t think of this possibility when they were younger and healthier, but they’re feeling the impact now. Adult children and their senior parents should sit down together and map out the future together, in a way that satisfies everyone and meets all of your needs.  Your family can avoid the financial burden of long-term care by having a plan in place for yourself or your parents before entering the retirement age. With knowledge and preparation, you can anticipate long-term care needs for everyone in the family.

Author

June is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.