Planning for nursing home care should involve adequate research.
Will you require nursing home care in the near future?
Perhaps your parents will require this level of care.
Either way, you should not make this transition blindly.
According to a recent The Columbia Regional Business Report article titled “Nursing home care requires advance planning,” the potential cost alone makes planning for nursing home care essential.
In the state of South Carolina, the median annual cost of care in a skilled nursing facility is $42,000.
Do not expect Medicare to cover this.
It will not.
Instead, you should consider other options to pay for care.
What are these options for planning for nursing home care?
Before you can qualify for Medicaid, your assets must be spent down to almost nothing.
There is also a five-year look back period for your finances when applying.
Consequently, giving assets away during that look back window will trigger some nasty periods of ineligibility.
For those who need Medicaid, it is often best to use the services of an experience elder law attorney to evaluate your options.
It is always better to plan than to react.
Long-term Care Insurance
Long-term care insurance allows you to pay a premium payment you can afford to provide coverage you cannot afford for long-term care at home, in an assisted living facility, or a nursing home.
If you are wanting to get long-term care insurance, start earlier rather than later.
You have to qualify physically and mentally for this insurance.
Insurability and premium costs are dependent upon age and health.
Some people work with their financial planners to “save” for long-term care.
In other words, they plan to “self-insure” against the risk.
As part of planning for nursing home care, financial planners may have you designate 10 to 15 percent of your income to this goal.
For those who are older and lacking the appropriate funds, earmarking at least 20 percent of their income may be wise.
Catch up provisions for those older than 50 can be beneficial when saving to a 401(k) or IRA.
You may also ask your financial planner about life-insurance options.
Some policies include long-term care rider options.
Not matter what option you choose, you should plan to cover at least three years of long-term care.
Although finances are important, planning for nursing home care should include estate planning.
Work with an experienced estate planning attorney to get your advance health care directive, last will and testament, durable power of attorney, and beneficiary designations in order.
Your loved ones will thank you.
Reference: Columbia Regional Business Report (March 10, 2020) “Nursing home care requires advance planning”