Taking long-term care into account

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Good retirement planning needs to take into account other issues besides cash flow and return on investments. For example, how much thought have you given to things like long-term care and how it will impact your overall health care and in turn your plans for retirement?

Many people make the mistake of assuming that Medicare is going to cover all of your healthcare needs, but that’s rarely the case. The reason is that the older a person gets the more complex matters pertaining to their health become.

Furthermore, there is often a need for someone to go into nursing home for long-term care. This usually happens around 80 but can happen much earlier. Furthermore, the average stay in a nursing home is somewhere from 2.5 years to 3 years. But the duration can be much longer. Now, at $100,000 a year, you can see that healthcare cost put quite a dent in your equity.

The obvious solution for most people is to look for long-term care insurance. You can look for the traditional long-term care insurance or a hybrid type of insurance that incorporates the benefits of life insurance as well as long-term care.

The problem that we see in our office is that most people start paying attention to long-term care insurance well beyond the point when they are eligible for it. If you have certain health conditions you can no longer buy long-term care health insurance. Hence it may be prudent to start looking at long-term care insurance long before you really will ever need it.

Besides the difference between traditional long-term care insurance and hybrid long term care insurance which are usually requires a lump sum upfront payment, there are other questions to consider?

How much long-term care insurance should you buy?

Should one or both spouses by the insurance?

Is there a disparity in ages and health between the spouses?

Is there any downside to buying long-term care insurance?

Can long-term care insurance be purchased too early?

Can the purchase of life insurance be a substitute for the purchase of long-term care insurance if your main objective is to preserve some sort of inheritance for the children, while at the same time providing for your own long-term care if you need it?

Please note that our office does not sell long-term care insurance or any other products.

Also please keep in mind that there are no substitutes for good powers of attorney so that steps can be taken for health and financial related reasons by somebody you trust later in life if you become ill or disabled.

Keep your eyes open for next month when we talk about housing and mistakes people make in spending during their retirement years and how this can create family feuds and, worse yet, elder abuse.

Talk to you next month.

To contact me, call 847-292-1220, e-mail abferraro@abferrarolaw.com or visit http://www.abferrarolaw.com.



About Anthony B. Ferraro

Anthony B. Ferraro is the founder and managing member at the Law Offices of Anthony B. Ferraro. He received his Bachelor of Science degree in accountancy from DePaul University and his Master of Science in taxation. After receiving his CPA designation in 1978, he enrolled in law school, earning his Juris Doctor in 1983 from De Paul University. An elder law practitioner, his practice areas include Medicaid planning and applications, guardianship, probate & trust administration, long-term care planning, nursing home contracts and admission, senior estate planning, special needs planning, estate planning, and estate taxation.

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