Although we enjoy a much longer average life expectancy in the United States than our ancestors did just a century ago, the natural aging process will catch up with all of us eventually. With that in mind, why not get started on your long-term care planning this October during Long-Term Care Planning Month? Each year, the month of October is designated as Long-Term Care Planning Month in the United States, providing the perfect opportunity to ensure that both you and your assets are protected and provided for during your “Golden Years,”
What Is Long-Term Care?
Long-term care is a range of services and supports residents may need to meet their personal care needs. Long-term care includes more than just medical care. It may also include assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs), such as:
- Using the toilet
- Transferring (to or from bed or chair)
- Caring for incontinence
The costs associated with long-term care can put your retirement nest egg at risk if you failed to plan ahead.
Factors to Consider When Planning for Long-Term Care
When creating a long-term care (LTC) planning component within your comprehensive estate plan, there four major decision categories you will want to include: housing, health, legal and financial.
- Health – the longer you live, the better the odds are that you will need to spend time in a long-term care facility. When you enter your retirement years you already stand a 50-70 percent chance of needing some type of LTC services before the end of your life. Nationwide, the average cost for a year in LTC was over $80,000 for 2017. The State of Illinois has historically kept pace with the national average, with long-term care averaging about $78,000 in Illinois for the same year. Considering the average length of stay is about three years, your nursing home bill could easily run cost you $250,000 – and that is if you need LTC now. In just ten years, experts estimate that same LTC bill will cost you well over $300,000. Because neither Medicare nor most basic health insurance plans will cover LTC expenses, you will either need to be prepared to pay out of pocket or you will need to look ahead to the need to qualify for Medicaid.
- Housing – Where will you live as a senior? If you plan to relocate, what is the cost of living where you wish to live? If you plan to stay where you are, does it make sense to downsize? Is joining a retirement community or purchasing a smaller home the best choice? What resources are there in your community for seniors? Be sure to consider all of these factors before you reach retirement age.
- Legal — This process will primarily involve drafting legal documents to ensure your wishes are carried out in the event that you are unable to make decisions for yourself. As part of your estate plan, you should have, at a bare minimum, a Last Will and Testament, a living will and a medical power of attorney as well as HIPAA. Along with ensuring that your estate is distributed as you wish, these documents will also ensure that your wishes with regard to medical treatment are honored and that someone of your choice makes decisions for you if you cannot make them yourself.
- Financial — one of the most significant factors in any long-term care plan is cost. Once you know what you want and need, you’ll want to plan for how to cover that cost. If you already have a separate retirement plan, now is the time to make sure that your estate plan and your retirement plan work in harmony with each other. It is also the time to review your overall financial picture to make sure you can afford to live comfortably during your retirement years. Medicaid planning may also need to be added to your estate plan to protect assets and ensure eligibility for Medicaid to help cover the high cost of nursing home care if you need it down the road.
Contact a Long-Term Care Planning Attorney
For additional information, please download our FREE estate planning worksheet. If you have questions or concerns regarding long-term care planning, contact the experienced long-term care planning attorney at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.