How Seniors Can Fund Their Own Long-Term Care

Medicare is invaluable for many seniors. Since the 1960s, it has been providing America’s senior and disabled populations with basic healthcare coverage. However, Medicare does have its gaps. For instance, it provides little coverage when it comes to long-term care, such as assisted living or nursing home care. That can make things difficult for the tens of millions of Americans who require long-term care, as well as their countless loved ones.

Because there are certain situations that Medicare does not cover, many people are concerned about how they will afford medical bills as they age. Adding to the problem is the fact that, even with Medicare, many seniors will pay more for medical care in the coming years. According to Forbes, retirement income and Medicare alone will soon no longer be enough to pay for necessary medical care for many aging Americans.

The best way to set yourself up for a healthy, financially stable future is by planning ahead. Adults should begin planning for their health and funding their aging years as soon as possible. It’s highly likely your health insurance won’t cover long-term care, which could require the purchase of a long-term care insurance policy. Here are some ways you can start planning for the future, courtesy of Smart Strategies for Successful Living.

Anticipating and Planning for Long-Term Care

One of the most important things you can do is try to reduce your risk of needed long-term care. While there’s no way to guarantee you won’t ever have a health emergency that requires long-term care, you can start taking steps to lower your risk of stroke, heart attack, dementia, mental illness, and other conditions that frequently require long-term care as people age.

Additionally, you can roughly calculate how much long-term care someone in your situation might end up needing. That way, you can start budgeting and saving up just in case. According to the AARP, “it’s smart to plan ahead,” and doing so helps put you in control of your health, life, finances, and future. It’s just as smart to prepare your medical directives in advance to ensure that your wishes are carried out in the event that you’re unable to make decisions. 

Paying for Long-Term Care

Many people are worried that even with Medicare, they still won’t be able to fund long-term care for themselves or a loved one. Luckily, there are many things you can do in this situation. Obviously, you could start a savings account or begin setting aside some money as a nest egg. Retirement payments can also help offset the cost of medical bills, so speak to a financial advisor about your retirement plan, if you haven’t already. You can also look into home loan refinance to lower your payments or even use the equity in your home to take out cash.

When thinking of ways to fund long-term care, look into selling your life insurance policy as a viable option. In fact, you may be able to sell your policy for a cash payout. That money can go toward unexpected medical bills and long-term care or added to your savings.

Finally, most older adults will ultimately opt to sell their homes to cover long-term care or to downsize. If this is something you’re considering, make sure to work with a reputable real estate professional to get the best possible ROI. You can determine if this is the right move for you by doing your due diligence on your local real estate market to see how much homes are selling for, how long they’re on the market, and so on.

Medicare and Insurance

Some people postpone signing up for Medicare, health insurance, or long-term care insurance because those scenarios feel too far in the distant future. These people believe that long-term care insurance isn’t needed while you’re young. While that may be true, you’re costing yourself money by not signing up in advance. By signing up for long-term care insurance when you’re younger, you can save money. For example, rates increase by 2 percent to 4 percent in your 50s compared to 6 percent to 8 percent in your 60s. Not only is long-term care insurance the healthy thing to do, but it’s also the financially responsible thing to do.

With the expectation that your medical costs will also increase, it’s important to consider your Medicare options. Seniors 65 and older are eligible for Original Medicare, but it doesn’t always cover everything. Depending on your anticipated needs, a Medicare Advantage plan could be the better option. These alternative plans provide Parts A and B but also add-ons like expanded prescription coverage, and dental and vision care. By saving money and planning ahead here, you’re better equipped to financially handle saving for long-term care.

Keeping It All Organized

There’s a lot of paperwork that you’ll be managing, and while most of it will be online it’s important to download certain documents and bits of correspondence for later use. This way, it’s easy to access that information whenever you need it. Simply create and download PDF files, and add any necessary paperwork as you receive it, even if it’s just annual re-enrollment information. To ensure your files don’t eat up too much space on your computer, compress PDF files into smaller sizes through Adobe’s free feature.

Of course, no one wants to think about the possibility that they or a loved one might end up in a long-term care facility. However, given the statistics, there’s a very good chance this will happen in the future. It’s best to plan ahead and determine how to pay for long-term care. That way, in the event that you or a loved one needs to live in an assisted-living home or a nursing home, you’ll be in a position to pay for the care.

Written by: Alyssa Strickland

Alyssa Strickland created millennial-parents.com for all the new parents on the block. Alyssa believes the old adage that it takes a village to raise a child, but she also thinks it takes a village to raise a parent! Millennial-Parents is that village. Today’s parents can be more connected than ever and she hopes her site will enrich those connections. On Millennial-Parents, she shares tips and advice she learns through experience and from other young parents in three key areas — Education, Relationships, and Community.