One of the most likely expenses in retirement is often one of the most over-looked: paying for long-term care. With healthcare costs continuing to escalate and people living longer, the problem will only continue to grow.
Are your assets positioned to help you pay for this possible retirement expense?
There are three common strategies used to pay for long-term care expenses:
- Pay out of pocket. You have diligently saved for retirement, accumulating a sizeable nest egg. However, did you plan for the potential additional expense of more than $100,000/yr (the average cost of a nursing home in Michigan, based on 2016 figures). Long-term healthcare can dramatically impact your retirement savings if you are forced to pay out of pocket, and many retirees are not prepared for this expense.
- Rely on the government. Should you choose to spend down your assets to below a minimum threshold, you may qualify for government assistance through the Medicaid program. Unfortunately, most affluent retirees will be unable to qualify given the size of their nest egg and their inability or disinclination to spend their savings so dramatically.
- Proper planning. There are multiple strategies designed to ease the burden of long-term care expenses. The optimal strategy is unique to your personal circumstances. Most clients have sufficient assets to pay for some or all of their long-term care expenses, they just don’t have them positioned properly. Understanding the myriad of options is the first step to proper planning.
You’ve spent a lifetime building your retirement nest egg. With proper planning, you can have the peace of mind that your retirement savings will be adequately protected and you’ll be better prepared to pay for the possibility of long-term care in your later years.
