When I conduct my retirement planning seminars, there is a section in there about Nursing Homes and the current and projected costs of care. While most people know that thinking about skilled long term care is the elephant in the room, many have found ways to ignore it, postpone dealing with it, or just pretend it doesn’t exist. I empathize with them. However, facts are facts. According to many studies, the chance of a person 60 or older needing some kind of non-medicare covered prolonged skilled care is 1 in 2. That’s right, 50% of us are going to need some kind of care.
AARP did their own study, that projected the current nationwide annual expense for Skilled Facility Care to be $76,000 per year. My own experience tells me that is on the low end if a patient needs memory care or some kind of dementia care. The other fact that we have to wrestle with is the escalation in the cost of care. Because the government does not include medical inflation, fuel and food inflation in their projections, seniors have been particularly under resourced in their social security and other income assets to absorb these and other costs.
7% of all people over age 60 have some kind of Long Term Care Policy. Many of these went in force with $100 – $150 a day benefits. Simply put, there are figleafs against a medical inflation rate of 6-7% annually. Even policies offering inflation protection are not keeping up, since most of them are at 3 and 5%, and only a few of them are compound riders.
So the challenge is; to find plans and programs that deal with the ‘what ifs’, and the ‘what not ifs?’ This is critical. Thinking through these issues requires for Asset Analysis, Legal Work, and a straightforward method of dealing with the risk of a catastrophic illness.
At Scheiber and Associates, we deal with these issues all of the time. I talk about them in my seminars. I would like to share these solutions with you.