Ask Kim: Long-Term Care Insurance

Dear Kim,

I’m a single female in my mid-fifties.  While I’m in good health now, I know that may change as I continue to age.  What are some tips you have for how I can financially prepare for any health changes that might be expensive?


Pre-planning Patty

Dear Patty,

Saving for health issues that might arise is similar to saving for anything else, you put a sum of money aside each month. The issue with that solution is you don’t have a definitive goal you’re working toward. None of us know what issues will arise with our health down the road, or how much the cost will be. Insurance can certainly play a role in risk sharing, and you should review your insurance coverage for things that might be serious, like cancer or stroke. For women, in particular, since we live longer on average than men, Long Term Care insurance is something you should consider. Many people think Medicare will pay for nursing home care should you need it, but it doesn’t. It will cover for a very short amount of time, but the average stay is approximately 18 months. I’ve had clients live in assisted living or a nursing home for several years. Some of my clients prefer to self-insure, but at monthly costs that can start at about $5000 per month and higher, depending on the level of care you need, you should have a fairly large pool of money to pull from if you choose that option. Some people prefer to rely on Medicaid, which is different from Medicare and it will pick up the cost for Long Term Care, but you would have to have to spend down any assets you have first. As well, they choose the home you are admitted to based on where a Medicare bed is available, and it might not be close to your family, or a facility you would choose to go into.

At the end of the day, health care is one piece in your financial plan for retirement along with retirement income, estate planning, and how are you going to spend your time once you no longer have a job every day. It may benefit you to sit down with a planner and discuss how all these pieces fit together.



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