The United States is in the midst of a Long-Term Care (LTC) crisis as more and more Baby Boomers reach the age they’ll most likely need custodial care in a nursing home. And, since FEHB and Medicare do not cover this type of non-medical care, the cost is entirely out of pocket.
How Much Would You Have To Pay?
Depending on where you live, a private room in a nursing facility is approximately $10,000 per month. Unfortunately, current research indicates that 80% of adults over age 60 do not have the financial resources to cover this expense. Without LTC insurance, paying out of pocket for custodial care can wipe out your retirement nest egg.
Reason #1: Odds Are You’ll Need LTC In The Future
According to LongTermCare.gov, a person reaching their 65th birthday today has a near 70% chance of needing some type of long-term care services and support in the future. If you think you won’t live long enough to need LTC, you’re wrong. At age 65, a man has a 66% chance of living until 80 while a woman has a 75% chance of hitting that same milestone.
Reason #2: LTC Insurance Protects Your Assets & Your Family
Without LTC insurance, how can you afford to pay $10,000 per month for care in a nursing home? Cash in your Thrift Savings Plan (TSP)? Sell your home and other assets? Or, will you have to rely on your children to cover the cost?
“When you consider the ever-rising cost of prescriptions and other healthcare-related needs, LTC insurance can help alleviate the burden of paying the high out-of-pocket expense of a nursing home.”
Reason # 3: You Can Choose The Care You Want
Far too many seniors mistakenly believe LTC insurance only covers nursing homes. Not true. You can purchase an LTC insurance policy that specifically covers assisted living or in-home services for help with bathing and dressing, meal preparation, and other needs.
Reason # 4: LTC Insurance Premiums Are Tax-Deductible
Since long-term care insurance premiums are tax-deductible, it’s something to consider when budgeting for the cost of coverage. Of course, the amount that’s tax deductible depends on factors such as your age, total medical expenses, and the policy you’ve selected. Go to the IRS page Eligible LTC Insurance Premium Deductions for more information.
Reason # 5: The Cost Of LTC Is Rapidly Rising
According to The Congressional Budget Office, total long-term care expenditures will increase at a rate of 2.6 percent per year above inflation. When you consider the ever-rising cost of prescriptions and other healthcare-related needs, LTC insurance can help alleviate the burden of paying the high out-of-pocket expense of a nursing home.
Connect with an FRC® trained advisor to learn more about LTC insurance.
