As Americans navigate the vast landscape of financial planning, there’s one crucial aspect that often gets overlooked until it’s too late: the inevitability of needing care such as assisted living care at some point in life.
Whether due to aging, illness, or unexpected circumstances, statistics resoundingly reveal that the majority of individuals will require some form of assisted living or long-term care services as they grow older. Ignoring this reality can lead to unexpected and sometimes overwhelming financial consequences for both individuals and their families. Therefore, it’s imperative to incorporate provisions for long-term care planning, whether it be assisted living or other potential categories of physical or mental care, into financial plans early on.
At Highpoint Advisors, LLC, we work with clients in central New York, Syracuse, and beyond on many aspects of finances, including long-term care planning and retirement planning. Here, we discuss the importance of planning for the possibility of future care needs.
Long-term Care Is Common for Older Americans
According to the U.S. Department of Health and Human Services, almost 70% of people turning 65 years old today will need long-term care services at some point during the remainder of their lives. This encompasses a spectrum of assistance, ranging from basic help with daily activities to more intensive skilled nursing care. Services can be delivered in a range of settings, ranging from at-home care to a nursing home facility.
Furthermore, the cost of such care continues to rise, putting immense strain on the financial resources of individuals and families. The Genworth Cost of Care Survey reveals that the median annual cost of a private room in a nursing home exceeds $100,000, and these expenses are expected to continue to rise significantly in the coming years.
Nobody Wants to Think They Will Need Long-Term Care
Despite these alarming statistics, many Americans fail to adequately plan for the possibility of needing assisted living or an even higher level of care. Some may be in denial, some may simply underestimate the likelihood of requiring such services, while others may simply postpone planning due to being uncomfortable with confronting their own mortality. One common symptom of failing to address this important topic is a lack of understanding about the financial implications caused by needing care for an extended period.
However, delaying preparations can have dire consequences, as the need for assisted living or other services often arises suddenly and unexpectedly. This leaves individuals and their families scrambling to cover significant costs.
What Can You Do to Prepare for Future Care Needs?
Integrating solutions for assisted living into financial plans early on is essential for protecting one’s financial net worth from expensive spend-downs in the future. This type of planning will also ensure peace of mind for the years to come. Here are some proactive steps individuals can take:
- Start Planning Early: Begin considering long-term care options as part of your overall financial strategy well before the need arises. The earlier you start planning, the more options you’ll have available and the better prepared you’ll be to manage potential costs long-term. You can always adjust your plans later, if necessary.
- Research Long-Term Care Insurance: Investigate long-term care insurance policies that can help cover the expenses associated with assisted living, home care, nursing care, etc. While premiums may seem expensive, they pale in comparison to the financial burden of paying for care out-of-pocket. Plus there may be discounts and tax benefits if you do your homework with a qualified advisor.
- Build a Cushion for Long-Term Care Expenses: Factor in potential long-term care costs into your retirement savings goals. This should serve as a buffer for these unexpected expenses. Allocate funds specifically designated for future care needs, whether through retirement accounts, investments, or other savings vehicles such as Health Savings Accounts. Common expenditures could include many things, such as care providers, medications, facility costs, equipment, etc.
- Explore Alternative Care Options: Evaluate alternative forms of care, such as in-home care or community-based services, which may be more affordable than traditional nursing homes or assisted living facilities. These options can provide flexibility while still meeting your care needs. Different options are available in different locations around the country.
- Communicate With Loved Ones: Have open and honest discussions with family members about your wishes regarding long-term care. If you’ve already developed a plan, tell them. If you have taken steps such as purchasing insurance, establishing trusts, or appointing a Power of Attorney, make sure your family knows that. If not, have an interactive conversation with your family about your preferences. This can alleviate stress and ensure everyone is on the same page when the time comes.
By proactively addressing the need for assisted living care or any other type of long-term care situation in their financial planning, individuals can better protect their assets, preserve their quality of life, and ease the burden on their loved ones. Delaying planning only increases the risk of financial hardship and limits available options.
Protect Your Future With HighPoint Advisors, LLC
Embracing this reality and taking action now will empower people to navigate the complexities of aging with confidence and security. It’s never too early to start planning for the future – including the possibility of needing assisted living care. At HighPoint Advisors, LLC, our advisors are licensed and experienced in helping clients in Syracuse, central New York, and other markets balance the costs and benefits of planning for longer-term care needs into and through retirement.
Contact us now to see how we can aid you in your planning.