The sad truth is that medical costs could ruin your retirement.
Those over 65 have a 70-percent chance of requiring long-term care at some point, while the average nursing home charges around $8,000 for a private room. Other services, such as home care, adult day care, and assisted living don’t come cheaply, either. Medicare does not pay for anything more than short stays, so that leaves you to come up with the cash.
This information can be alarming for many people, but the good news is that there are ways to deal with this economic reality through careful planning and intelligent savings and investments. Here’s a breakdown of what you need to do.
Assess Your Risks
Though you don’t have access to a crystal ball, you can take a hard look at the current state of your health along with your lifestyle and family’s history of chronic illnesses to gauge the likelihood that you’ll need long-term care, and to what extent. What your parents suffered from is particularly important, as a number of illness that strike people in old age are passed on genetically.
Reduce Their Likelihood
You’ll cut down care costs by improving your health so you’re at less risk of falling victim to chronic conditions, including those for which you may be genetically predisposed, such as certain cardiovascular diseases and diabetes. Eating a nutrient-rich diet low in sugar, sodium and saturated fat works wonders, as does getting regular exercise.
Make Adjustments at Home
Another way to cut down on future expenses is through modifications to your residence that allow you to live there longer, free of injury, even if you do suffer from a chronic condition. A few worthwhile projects include adding a stepless entry and widening doorways to improve overall mobility. Grab bars in the bathroom also make it much easier to stand up and sit down while avoiding nasty spills.
Learn Your Options
With an understanding of future risks, a healthier lifestyle and safe living environment, it’s time to look at the care options available. If you’ve made significant investments in your home, then a health aid may suffice well into old age if you don’t require extensive treatment. If you do, then adult day care, assisted living, or a nursing home, though more expensive, begin to look more attractive.
Now that you know what’s available, let’s take a look at some financing options.
Build Some Reserves
Put money into a tax-advantaged health savings account regularly while you’re still working. It’s only available for those with a high-deductible health plan, but comes in handy when paying for long-term care that isn’t covered.
One option is long-term care insurance. This is particularly useful if you’re at high risk for a chronic illness, though it isn’t available after diagnosis. Another option that may help is a supplemental Medicare Advantage Plan. These plans vary by state, but they typically cover the costs of vision and dental care, as well as prescription medications. By increasing access to and decreasing out-of-pocket costs for these services, you can stay healthier longer and save more money for future care.
Activate a Rider
That would be the living benefits rider on your life insurance, if you have one. If not, there’s no need to fret, as it’s a common addition that allows you to withdraw from your death benefit in the case of illness or injury, according to DoughRoller.
Tap Into Your Property
You can do this via a reverse mortgage, which allows you to tap into the equity of your home to pay for in-home care. It offers significant advantages, the most notable of which are tax-free funds to use however you see fit. However, like with all bank loans, it’s important you and your loved ones understand the terms of the agreement clearly before you sign on the dotted line.
Sell the Home
This may seem like the last resort, but it makes sense in some circumstances. To decide if it’s right for you, conduct some research into the value of property in your area. To give you a ballpark figure, properties in Poland, Ohio, moved at an average of $169,000 last month. If selling your home can net you a fair amount of cash, it could be worth pursuing to find a smaller, more manageable home so you can pad your bank account to help pay for care down the road.
Though funding your care won’t be easy, it’s nice to know there are so many options. That should make your planning easier, as long as you get started early.
Written by June Duncan 💚 firstname.lastname@example.org
Image via Unsplash.