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The Rising Costs of Long Term Health Care

The Rising Costs of Long Term Health Care

They say that what you don’t know won’t kill you. However, when it comes to the costs of long-term health care in retirement, being misinformed can have serious consequences for your financial well-being. Understanding the actual costs of long-term care is crucial for ensuring that you can afford the kind of care you would like to have.

According to the latest study, the national annual median cost of long-term care continues to rise. The cost ranges from $108,405 per year for a private room in a nursing home to $20,280 per year for adult day care services. The annual national median cost for a private one-bedroom in an assisted living facility is $54,000. These costs have been increasing steadily over the years, with assisted living costs seeing an 80% increase over the last 18 years.

It is concerning that four out of five adults underestimate the cost of home health care, according to a Genworth survey. This highlights the need for individuals and families to educate themselves about the actual costs of long-term care and plan ahead for how they will pay for these expenses.

“The data from our complementary study dramatically demonstrated the huge disparity between what consumers think costs are and what they actually are, which is why it’s so important for families to educate themselves about the costs and plan ahead for how they will pay for those costs before it’s too late,” said Tom McInerney, president and CEO of Genworth.

Planning for long-term care costs is essential, and the NewRetirement Planner can help. The planner automatically estimates long-term care costs and incorporates them into your retirement plan. You have the option to eliminate or reduce these costs if you wish to plan without them. This tool can provide valuable insights into the potential financial impact of long-term care expenses.

While the current healthcare costs may be unknown to many, the bad news is that these expenses are only expected to increase in the future. Genworth predicts a 66% increase in assisted living costs over the next 10 years. This highlights the urgency of understanding and preparing for the financial implications of long-term care.

“The high cost of long-term care in America is considered the ‘new normal,’ but it does not change the reality of what is certainly one of the biggest societal issues of our time: that at least 70 percent of Americans over age 65 will need some form of long-term care services and support during their lives,” said McInerney.

It is crucial to note that the actual costs of long-term care will depend on the type of care needed and the duration of care required. These costs may be greater or lower than the national medians mentioned above. It’s important to assess your individual circumstances and plan accordingly.

One common concern is funding long-term care. Multiple data sources suggest that someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years. However, it’s important to remember that if you can’t afford care, you won’t be left without options. After you have depleted your existing assets, you may be eligible for Medicaid, a government program that provides assistance for long-term care expenses.

In conclusion, understanding the actual costs of long-term health care in retirement is essential for financial planning. The rising costs of long-term care highlight the need to educate ourselves and plan ahead for these expenses. Utilizing tools like the NewRetirement Planner can help estimate and incorporate long-term care costs into your retirement plan. Remember, the actual costs will depend on your specific needs, and there are options available to help cover these expenses. By being informed and proactive, you can better prepare for a financially secure retirement that includes the care you need.

Source: New Retirement

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