| February 2019 | Real Hero Report
Living Life on Your Own Terms
The late Andy Rooney said it best: “It’s paradoxical that the idea of living
a long life appeals to everyone, but the idea of getting old doesn’t
appeal to anyone.” Life expectancy around the world has steadily
increased for almost 200 years, which, in general, is a positive result of
improved sanitation, nutrition, medicine and technology. But living longer also
comes with the challenge of what to do when you are no longer able to care for
yourself.
As life expectancies continue to increase, so do the odds that we will require
some form of elder care. According to a study by the U.S. Department of Health
and Human Services, roughly three out of four Americans over the age of 65
will need long-term care at some point in their lives. And for nine out of ten
married couples, at least one spouse will require long-term care.
Even more startling is the fact that spending just a few years in an assisted
living facility or nursing home could deplete the assets that you have spent
decades accumulating. In fact, the Genworth Cost of Care Survey 2018
estimates the national median cost for a private room in a nursing facility is
over $100,000 per year.
What about Health Insurance? One of the most common misconceptions
about paying for long-term care—a misconception that often deters people
from taking timely action—is that health insurance, including Medicare and
TRICARE, provides long-term care benefits. The truth, however, is that, aside
from some very short-term benefits, these programs do not cover long-term
care costs. The state-administered Medicaid program will cover long-term care
expenses at certain approved facilities—but only if you’re willing to spend
down your “countable assets” to your state’s maximum allowable amount,
which is typically only a few thousand dollars.
How family caregivers are affected. Another common deterrent to long-term
care planning is the assumption that one’s family will be able to take care of
them in their old age. The reality, though, is that a long-term care need is often
the result of cognitive impairment or one’s inability to perform basic “activities
of living” such as eating, bathing and dressing. In most cases family members
are simply not equipped to provide these services on a daily basis. There’s a
financial component, as well. According to our Financial Behaviors Index survey
in August 2018, the average monthly cost that career military families report
paying for the care of a parent or other elderly family member is $2,429.
Assess your needs, then explore your options. So how can you prepare for
the very real possibility of having to spend several hundred thousand dollars
on long-term care? The best course of action is to examine a variety of factors,
including income and assets, current health, family medical history, and
whether family members can play a role. Geography should also be considered,
because long-term care costs vary widely in different parts of the country.
For some, paying possible long-term care expenses “out of pocket” may be
a realistic possibility. For others, purchasing long-term care insurance may be
a better option. And still for others, spending down their assets to qualify for
Medicaid coverage may be the most logical approach.
Regardless of your circumstances and objectives, start by having a frank
discussion with your family. Depending on your age, that might mean talking
to your parents about their preferences, or talking to your adult children about
your own preferences. Then, sit down with your Financial Advisor and ask them
to help you put a plan in place.
Homeowners’ Association—
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or condominium, you must join that community’s
live in the same building and are responsible for maintaining the
of these types of common areas, such as pools and tennis courts,