It’s difficult to face, but statistics show that 70% of people who reach the age of 70 will need some sort of long-term care (like a nursing home). The need for long-term care can arise because of stroke, dementia or any number of health problems. When that happens, you and your family will have to figure out a way to pay for it. There are really only three ways to pay for long-term care:
1. Use your own assets or income to pay for care. You could use your savings, your pension, your Social Security, your IRA, your investments or sell your house to pay for care. Even the wealthiest of people generally have trouble doing this for any length of time because the average cost of nursing care in Central Illinois is around $5000 per month! With the average nursing home stay lasting nearly 2.5 years, that’s $150,000!
2. Let the insurance company pay for it. If you buy long-term care insurance, or buy a life insurance policy with a long-term care rider, when the time comes your family won’t have to use their own savings. If you can purchase long-term care insurance early enough, this can be a good option for helping pay for care. However, there will come a point in life when purchasing LTC insurance just isn’t an option.
3. Use benefits paid for by your taxes. Many people do not want to rely on government help as they age, yet 70% of nursing home residents rely on Medicaid to pay the exorbitant costs of care. Until something changes, this benefit will continue to play a vital role in making sure people get the care they need as they age. You’ve paid a lifetime of taxes. Why not use this benefit just like you use Medicare or Social Security? Another very important benefit in paying for long-term care is the Veteran’s Pension and Survivor’s Pension Programs (often called “Aid and Attendance”). This benefit is available to a wide range of Veterans who often do not even know about the program. (Only 28% of those eligible actually take advantage of the program.) It is a great help in providing in-home care or nursing care.
The key is to plan ahead as to which of these options you hope to use to pay for your care. The tragic family situations regarding long-term care happen when people don’t plan ahead and then are surprised or having an immediate crisis which results in a worst-case scenario of depleting their life savings.