Humans live longer now than ever before. Because of this, many of us worry about outliving our retirement savings. So what are the costs of long-term care for seniors? Affording long-term care may add to the already long list of an aging adult’s burdens.
Long-term care refers to the variety of services that you or a loved one may require during their lifespan. These services benefit older adults by assisting them to live as independently as possible for the duration they may need this care.
Between sixty and seventy percent of people over the age of 65 will require long-term care services. This figure translates to you, or your aging loved one, needing help with at least two activities of daily living.
The cost of this depends on the type of care one may require and the duration of this care need. Therefore, aging adults and their families need to consider the cost of long-term care and how long they will need this care and plan accordingly.
The time and intensity of long-term care
According to Long-Term Care, about 60 percent of us will need some form of long-term care during the duration of our lives. Interestingly, the average woman will require long-term care for around 3.7 years. On the other hand, the. The average man will only end up needing care for about 2.2 years. These numbers may include some combination of care within the home, care in an assisted living community, and care in a nursing facility with skilled caregivers.
The cost of long-term care for seniors
According to Linde Legal, PWC (Price Waterhouse Coopers) found that the average cost of long-term care for seniors in the United States of America was $172 000. This figure can include paid in-home care, living in a skilled nursing facility, or an assisted living facility.
Twenty-five percent of the time, long-term care lasts eight months. Thus, the cost of care for eight months can relate to spending $26,000 for long-term care. The flip side of this coin is that the other twenty-five percent of that time can relate to costs exceeding $240,000. Alarmingly, in 8 percent of cases, long-term care can exceed eight years. Long-term care costs, in this case, can be staggering. Seven percent of the time, long-term care costs exceed $500,000, and in 1 percent of cases, costs exceed $949,000.
With long-term senior care costs rising yearly, this total would likely be higher in 2022 versus 2021. Genworth’s Cost of Care Survey shows us that for 2020, the national average cost of assisted living was $4,300 per month. Nursing care costs averaged $7,756 a month. For a semi-private room, that figure rose to $8,821. Senior Living has a helpful guide for daily and monthly estimated long-term care costs for single individuals and couples.
Long-term care insurance
Having a long-term care insurance policy can reduce your out-of-pocket costs. For example, a long-term care insurance policy may provide $4 000 to $6 000 coverage per month. In addition, long-term-term care insurance includes a guarantee that this figure will increase by three percent annually to cover inflation costs and may provide three to four years of coverage.
As the cost of care rises, so does insurance premiums. While this cover is beneficial, some can’t afford to continue paying as premiums skyrocket. Long-term care insurance also may not cover as much as you may think. It only kicks in once a policyholder has a cognitive impairment or requires help with two daily living activities.
Most of these policies have a lifetime maximum. For example, if you have a lifetime maximum of $600 000 and your care costs exceed this amount, the rest will have to come out of your pocket. Another hurdle is that some of these policies have a 30 to 90 day waiting period, so in many cases where care is needed, the long-term care insurance policy doesn’t even come into effect.
Long-term senior care cost planning and CCRCs
Opting for peace of mind, some choose to move to a continuing care retirement community (CCRC, or life plan community). CCRCs offer residents a full continuum of care services. This range of services includes independent living, assisted living, and full-time skilled nursing care. Care services are, in many cases, provided at on-site healthcare centers. On-site health centers enable partners who have different needs to stay close to one another.
The cost of a CCRC can vary from one community to another. However, many require an entry fee which may be refundable in the future. To understand these refund stipulations and other contract details, click here.
Takeaway
When you consider the above factors, the cost of long-term senior care can seem overwhelming. Many are afraid of what these unknown factors may cost their aging loved ones, both emotionally and financially. If a family acts as an at-home caregiver, will it affect their ability to earn an income? If you move to an assisted living facility, will their savings last for the duration of their life? What would happen if the type of care needed can no longer occur safely at home?
Long-term care planning needs to start as early as possible. CCRCs are a viable option, as well as purchasing long-term care insurance if you can afford it. With the proper and planning and care, long-term care needn’t be daunting. If you have any concerns or would like assistance navigating your planning, contact us. We help you find local long-term senior living resources at NO COST to you.
References: Blog post by Brad Breeding for My Life Site. To view this post, click here.
