Retirement News : Seniors : Don't Overlook Long-Term Care

Don't Overlook Long-Term Care

Date Added: 30-03-2005

You get paid on Friday, and by Monday the money is gone.

Between paying bills, saving for college and funding retirement, there's rarely anything left. So the last thing you want to do is add long-term care insurance to your list of expenses.

But it costs money to get old these days. You could end up spending your life savings -- and your heirs' inheritance -- on your nursing-home bills.

Granted, you could rely on Medicaid, but you'll have to blow your life savings to qualify for that.

So it might be worth considering long-term care insurance. Paying for some extra insurance now could protect your money later. And long-term care benefits are tax-free. That means you don't owe Uncle Sam a dime when you start receiving the benefits.

How It Works
You may get to a point in your life at which you can no longer perform the activities of daily living. That means you won't be able to bathe yourself, cook for yourself or take care of your house because of an accident, illness or a chronic condition. So you'll need some sort of long-term care.

You'll then have to decide what type of care you want.

The national average annual cost of home health care is more than $20,000. And that's only for a home health aide at $18 an hour, five hours per day, for five days a week. That cost is expected to hit $68,000 by 2030.

Nursing homes are clearly more expensive. The national average cost of a semiprivate room in a nursing home is $52,000 a year, according to the Federal Long Term Care Insurance Program. Nursing-home costs have been going up at least 5% a year. If that continues for another 30 years, the cost of nursing-home care (for a semiprivate room) in 2032 is expected to be $190,600 a year.

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