Expecting the Unexpected: Planning for Long Term Care Needs

The Growing Need for Long Term Care

According to Genworth, every day for the next 10 years, over 10,000 Baby Boomers will reach the age of 65. Within this group, 70% of that population will require some sort of long term care during their lifetimes. Let’s take a look at the various types of long term care services available, and to prepare to pay for it.

Levels of Long Term Care 

Generally speaking, long term care types can be broken down into three main categories:

• Home Care
• Assisted Living Community
• Memory Care Community

Many Assisted Living communities offer an array of amenities and services, including:

Assisted Living communities also offer residents the chance to enjoy many events and activities with other seniors who live there.

Memory Care Communities

Memory Care communities are focused on providing services to residents who are living with Alzheimer’s disease or other forms of dementia. These residents also normally require assistance with the Activities of Daily Living (ADLs), but have additional needs due to cognitive decline.

A Memory Care community is normally staffed by a Medical Director who oversees residents’ medication and overall care, as well as Registered Nurses (RNs) and other professionals specifically trained to assist people with various forms of dementia.

Like Assisted Living, Memory Care residents are provided a full-range of amenities, services, and events which they can participate in.    

Paying for Long Term Care Services

The methods people use to fund expenses associated with long term care can vary greatly. Here are some of the most common ways people pay for these services.  

• Private Assets
• Long Term Care Insurance
• Social Security & Medicare
• Veterans Administration Benefits 

Private Assets

Private assets include personal savings or retirement accounts, proceeds from the sale of a house, or other private financial resources. Older people are advised to work with a qualified financial advisor to best plan for long term care expense needs.

Many senior living communities have qualified staff members who are specially trained to help residents in this area as well.  

Long Term Care Insurance  

Some seniors purchase a Long Term Care insurance policy, which covers the cost of Home Care, Assisted Living, or Memory Care services. Long Term Care insurance benefits vary, based upon the level of coverage the insured person purchased at the time of policy issuance.

The time duration of Long Term Care coverage can range from 2 years, 5 years, or a lifetime of benefits. The key to purchasing Long Term Care insurance is that it must be obtained before there is a need for services.  

A knowledgeable financial advisor can be very helpful in understanding the role Long Term Care insurance plays in a senior’s needs planning.      

Social Security & Medicare

Monthly Social Security payments can be used to fund long term care expenses, but are limited to the amount of money a senior receives each month.

It is also important to understand before there is a need for long term care that Medicare does not pay for the living costs of Home Care, Assisted Living, or Memory Care services. However, Medicare can help fund other expenses such as medication, medical bills, and durable medical equipment.    

Being Prepared for the Future

Thanks to modern medicine, technology, and other advances, people are living longer than ever before.  As 7 out of 10 seniors will need some sort of long term care in their lifetimes, it is important to plan for these expenses as best as possible.

Working with a qualified professional to develop a strategy for funding long term care costs is a good idea and will save time, money, and a considerable amount of stress later on.