Almost half of the US families that save for retirement run out of money before passing. That can create serious problems when it comes to living your best life as you get older.
Avoiding the fate of being cashless in old age is one of the reasons why long-term care planning as early as possible is essential. By laying out your plans, you can start building your network of support and more importantly, start saving money to ensure you can pay for the services you’ll likely need.
If you’re not sure where to start with long-term care planning, keep reading. By taking in the information in this post, you’ll set yourself up to successfully tackle everything that will require your attention as you move into retirement age.
1Discuss Your Finances Early
Money is a huge part of long-term care planning. It’ll dictate the kind of living facilities you can choose from, the quality of nurses you’ll be able to request house calls from, and your eligibility for government assistance.
That’s why the foundation of long-term care planning is being honest about your money.
How much are you making? Are you on track to have enough money to live off of once you hit your mid-60’s? If not, how long until you hit your required number?
Once you’ve asked and answered those questions, share your answers with loved ones so they can prepare for the reality that they may need to assist you at some point.
2Set Savings Goals
The beauty of being honest regarding your finances is that the questions you ask bring solutions to the surface. For example, by knowing where you’re tracking towards the amount of money you’ll need in retirement, you can adjust your savings goals.
If you work for a company that provides a retirement plan, making adjustments to your savings is as easy as adjusting your 401K contributions. For others that are self-directing their long-term savings, they’ll want to up their IRA deposits, shift money from their checking accounts to their high-interest savings, or do anything else a qualified financial advisor might suggest.
3Have an Idea of What Kind of Care You’d Like
As money becomes clearer to you, you can start having realistic discussions about what kind of care you might like in old age.
Degrees of care range from full-service living facilities to moving in with family members. Where you fall on that service spectrum will carry varying financial implications.
We advise in the early stages of long-term care planning that people aim for the kind of assistance they’d optimally want, regardless of cost. We then tell them to make adjustments as they move closer to cashing in on their care funds.
4Consider Long-Term Care Insurance
Long-term care insurance is an often overlooked tool people can rely on to help them avoid gaps in their wealth. These policies require a monthly premium and then, if you find yourself in an unexpected situation, the policy will kick in to cover necessities for as little as a couple of years or as long as the rest of your life.
Long-term care insurance is prohibitively expensive for many. Therefore, it might not be the right solution for you if you have the option of seeking support from friends and family. For those of you that are worried you’ll suddenly run out of funds though, insurance can be helpful.
5Understand Medicare/caid Offerings
The government has money set aside to help people with their long-term care needs. That money comes from Medicare/caid programs.
Not everyone is eligible for assistance through these programs. Most benefits are reserved for people that are low-income or have a diagnosed disability.
Even if you think you may not qualify for assistance, look into program offerings early so you can strategize how you may be able to make lifestyle changes today to qualify for help in the future.
6Explore Wealth Transfers
One of the most common lifestyle changes people undergo to qualify for government support are wealth transfers. Wealth transfers are controlled movements of assets from one person’s account to another so the person relinquishing money is poor enough to request government funds.
These transfers, while common, need to be handled carefully and should be directed by Medicaid lawyers to ensure you’re not disqualified from the program you’re interested in or worse.
In most cases, wealth transfers need to take place 5+ years before applying for assistance so as not to raise alarms.
7Know Who You Can Rely on When Things Get Tough
You have several options regarding long-term care that will help you avoid being a burden on loved ones. Sometimes though, even the best-laid plans have wrinkles.
If you run into trouble as you move through your care planning strategy, always keep in mind who you can rely on to help you weather the storm. The last thing you want is to be old, out of work, out of the Medicare or Medicaid system, and homeless in the latter years of your life.
A Little Bit of Long-Term Care Planning Today Can Change Your Life Tomorrow
Nobody likes to think about long-term care planning or the stage in their life where they won’t be able to fully support themselves. Despite that, we implore you to be honest about your future.
A little bit of planning today can change the quality of your elderly existence exponentially.
Our team is here to help if you have more finance, planning, or legal questions. Just check out more of the content on our blog to keep learning.