Avoid These 3 Mistakes in Long Term Care Planning

Author: AB Staff

Avoid These 3 Mistakes in Long Term Care Planning

Editor's Pick Wellness

An unfortunate reality is that many people still have no retirement savings today. With 10,000 people supposedly retiring form work each day, the country is headed for a crisis if we do not try to fix this now.

However, proactive planning is the way to go. Let’s take active measures in securing our future by identifying the expensive mistakes that we need to fix now. 

Delaying coverage

Long term care insurance provides a way for older adults to fund expensive long term care services. And typically, they receive more coverage care than the premiums that they pay. However, only a handful of retirees have decided to purchase a policy on time.

Waiting to purchase long term care insurance until you are older can have two outcomes:

  1. You end up with higher premiums that you may have to give up some of the features.
  2. You get disqualified for coverage because of new health conditions.

When nursing home expenses could reach $92,378 a year and assisted living facilities could cost $43,539, many baby boomers can surely use the security and assurance that policies provide.

To get started in securing a policy, feel free to refer to ALTCP.org’s long term care planning quiz. Through a set of question, you can have a step-by-step guide to planning for long term care.

Thinking Medicare, Medicaid, and Social Security Will Cover All Expenses

Here’s the real situation:

Medicare will not finance most of the long term care expenses; even though 4 out of 10 Americans age 40 and older mistakenly expect so. Also, Medicaid enforces a strict income limit that may require people to spend down their assets just to qualify.

On top of that, Social Security benefits—the program largely relied on to finance retirement— only averaged $1,404. This barely covers the basic expenses of many Americans.

The reality is this:

Life is expensive, and being complacent about it will only lead to more dollars lost.

Relying on family members to provide the care

In a previous blog post, we discussed how senior care affects an adult child’s life. By relying on your children to provide the care that you need or pay for the care services you require, you put them at risk of losing their financial stability.

The number of hours dedicated to providing care increases with the age of the caregiver. Instead of working and building retirement income, family members spend more time providing care for their loved ones.

However, it gets worse:

The care responsibilities can be too exhausting that your adult children may end up needing the long term care as well because of health conditions that resulted from the care.

However, they are now left with little financial resources to pay for their own care. This then forces them to rely on their children for support. It creates a cycle that may be too difficult to break.

Long term care planning may be difficult, but choosing not to do so could lead to even more challenges.

What are your long term care plans? How are you planning for your later years? What are some challenges you face?  Share your answers on our community forum then click here for a FREE eBook from The Association for Long Term Care Planning.

Written by: Samantha Stein from the Association for Long Term Care Planning. ALTCP provides free long term care information, resources and expert planning advice for seniors and adults. Our mission is to raise awareness and promote self-education on the need to plan for long term care.