It’s more important now than ever to plan appropriately for long term medical care. We know that it’s not a pleasant thing to have to think about or plan for, but a little planning now can save you from big problems in the future.
Certainly, you don’t need an estate planning attorney to tell you that long-term care does not come cheap. Without prior planning or comprehensive medical coverage, the costs of an extended stay in long-term care can be financially devastating.
If you are approaching retirement age or are simply thinking ahead in terms of potential health care costs down the road, there are steps you can take to ensure you will have the money you need when you most need it.
FINANCIAL PLANNING FOR THE FUTURE
While it is impossible to know how much you will need to spend on health care after retirement, there are things you can do today to mitigate the risks of being left short of funds for medical care in the future. While the cost of medical care fluctuates, there are current averages that can help you predict the potential costs you could face down the road. Some of the projected figures might be surprising. HealthView Services calculates that a 65-year-old man will spend approximately $190,000 on medical care during retirement. An average 65-year-old woman is predicted to spend approximately $214,000, as women tend to live longer. These estimates are alarming to some, and they don’t even include long-term care price tags. Keeping these numbers in mind, however, does provide a ballpark figure to aim for when saving for senior medical care.
While surveys suggest that not enough people actually worry about long-term care, those who do should consider purchasing long-term care insurance while at a young age. Premiums purchased in your 50s and 60s are likely to be much lower, as well as easier to get approval on. Current estimates report that 70 percent of seniors, 65 and over, will at some point need some form of long-term care. This is an important statistic to take into consideration when deciding whether or not to purchase long-term care insurance.
SOCIAL SECURITY CHANGES
Historically, social security payments don’t always accurately account for the cost of living and inflation, which is why many question how much help it will actually provide during their retirement years. Some people actually worry that Social Security will simply run dry, but as it is funded mainly by payroll taxes, any existing workforce ensures the existence of Social Security.
The program is currently falling short, however, to the tune of benefits being cut by as much as 23 percent by 2034. As that estimate is for 16 years down the road, there is plenty of time for things to change or for lawmakers to instigate a positive amendment.
When it comes to the growing cost of long-term medical care for senior citizens, the answer is to plan ahead. Don’t make the mistake many make of assuming they won’t need any type of long-term medical care; instead, plan for the possibility, because statistics show that most people will need it at some point in their lives.
As estate planning attorneys in Corona and Orange County, we do our best to keep the public informed on issues that directly impact seniors. If you have a topic you would like us to cover on our estate planning blog, please contact us.