Of all the unexpected twists and turns life throws your way, few can be as financially devastating as long-term care. At a cost of several thousands of dollars per month, a nursing home stay of only a modest duration can wipe out the lifelong savings of even a reasonably affluent family.
Does Medicare Pay for Long Term Care? Does Medicaid Pay for Long Term Care?
Medicare typically covers the cost of only a very short time in an assisted living facility. Frequently, Medicare will pay for 100 days or less and, furthermore, only in certain conditions. On the other hand, Medicaid can pay for assisted living for years, but only after nearly all of your income and wealth have been spent.
Long Term Care Insurance
If you are young and healthy enough, long term care insurance might be a way to minimize your risk. Unfortunately, premiums are very high and policies are still in flux as insurers struggle to get a handle on the true cost of offering the product.
The Potential Impact of Long Term Care on Your Retirement
Since the need for long term care is difficult to anticipate and hard to quantify in advance, most people are unprepared. Even a short visit by either spouse to a nursing home can have a devastating financial impact. Furthermore, a parent's need for nursing home care can dramatically reduce or even eliminate an otherwise potential sizable inheritance which could have made a child's retirement significantly more secure.
No matter how you slice it, preparing for the possibility of long-term care is difficult but necessary. Either by purchasing long term care insurance or by saving for the possibility of needing such care, be sure to consider the cost of long term care when planning for your retirement.