How Much Do You Need to Have Saved to Afford Long-Term Care Out-of-Pocket?

By Steve Elliott | November 14, 2022 | Comments Off on How Much Do You Need to Have Saved to Afford Long-Term Care Out-of-Pocket?

If you’re in your 40s or 50s right now, you might not be thinking about the possibility of paying for long-term care. If you’re like most Americans, unfortunately, you assume your health insurance is going to cover it. Or, at the very least, Medicaid will kick in during your retirement years, should you ever need long-term care. Inquiring about this with long-term care insurance companies can help you answer your questions.

Long-Term Care Insurance Companies San Diego CA - How Much Do You Need to Have Saved to Afford Long-Term Care Out-of-Pocket?

Long-Term Care Insurance Companies San Diego CA – How Much Do You Need to Have Saved to Afford Long-Term Care Out-of-Pocket?

Let’s dispel those two myths right now. First, most health insurance policies do not cover long-term care. They cover short-term care, which may last for a few weeks, but beyond that, most individuals will have to start paying for a hospital stay that goes on for many months or nursing home care, in-home care, assisted living, or other types of long-term care on their own.

As far as Medicaid or Medicare is concerned, yes, that may kick in once you reach retirement age, but guess what? As most people don’t realize, Medicaid is only going to cover one type of long-term care in most states. Most often that is a nursing home. Plus, it only begins covering those long-term care expenses after the individual has used up the bulk of their assets, savings, and even equity, including that in their primary residence.

In other words, you will have to basically use up all your investments, savings, and the equitable value of your home (if you own it) before Medicaid begins covering those expenses.

So, how much do you need to have saved?

That all depends on where you live and the type of elder care you choose. For example, in some states, nursing home care might cost $75,000 a year. In-home care could cost you $55,000 a year. In another state, a nursing home may cost over $300,000 each year. In-home care? It could top $80,000 or more for full-time or around-the-clock care.

Most people are absolutely stunned at those numbers when they first see them. They have no idea that elder care can cost so much. Unfortunately, those numbers are going to be a thing of the past very soon.
As the baby boomer generation continues to retire, there’s increased demand for long-term care. With increased demand comes increased costs. On top of that, you have inflationary pressures that are only going to make it rise year after year after year.

Now, you may only require long-term care for six months or a year. Still, depending on where you live, that could erode the bulk of your retirement savings very quickly. What happens then?

Long-term care insurance can protect you.

Before you reach retirement age, consider long-term care insurance. If you wait until you’re in your 60s to start a policy, you might be denied. You may have a history or family history of health issues that make you ineligible for long-term care insurance.

That’s why the best time to start a policy is by your mid-50s, at least. Then you won’t have to worry about paying for long-term care out-of-pocket for up to three years, possibly longer, depending on the policy you choose and are eligible for.

If you or a loved one are considering Long-Term Care Insurance Companies in San Diego CA, please contact Steve Elliott at Capstone Insurance for an honest discussion about your future and your options. Call today (858) 350-3161.

Steve Elliott
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