7 Ways To Save Money On Long-Term Care In Your State

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This article first appeared on NewRetirement.com.

It’s possible that you won’t like the concept.You could try to dismiss the idea.You may persuade yourself that you will be the fortunate one who will live to see your last day in good health.

According to new research, at least 70% of people over the age of 65 will require long-term care services and support at some point during their lives.

Unfortunately, the cost of long-term care has risen dramatically in the last 20 years, according to Bill Driscoll, a certified financial planner with William Driscoll Insurance in Plymouth, Massachusetts.It appears to be slowing down a little, but there is still a problem.Self-insurance is only possible for a small percentage of the population.

Driscoll has over 20 years of experience in the financial services industry.For the past 18 years, he has offered long-term care insurance as part of his financial planning practice.

When I first started selling long-term care insurance, I thought a policy of $100 a day would cover more than 75% of the cost of care, according to Driscoll.Today, I generally encourage people to read well over 200 [policies] per day, and in some cases 300.

The growing demand for long-term care and assisted-living services, as well as the rising costs of these services, can put some retirees in a difficult situation.

However, depending on where they live, some people may find it easier to pay for long-term care than others.

Genworth calculates and ranks the costs of long-term care in each state every year.Costs can vary dramatically across the country, according to the report.

According to Genworth’s most recent study, these are the top ten most expensive places for long-term health care.

  1. Alaska is a state in the United States
  2. Massachusetts is a state in the United States
  3. The District of Columbia (DC)C
  4. Connecticut is a state in the United States
  5. Hawaii is a state in the United States
  6. Vermont is a state in the United States
  7. New Jersey is a state in the United States.
  8. New York is a city in the United States.
  9. Nevada is a state in the United States
  10. North Dakota is a state in North America.

Given the data, it’s clear that if long-term care costs aren’t factored into the budget, they can easily wipe out your retirement savings.

Here are some ideas for how you can plan ahead.

Purchase long-term care insurance.

Long term care on a laptop


Long-term care insurance, unlike traditional health insurance, is designed to cover long-term services and support, such as personal and custodial care, in a variety of settings, including your home, a community organization, or another facility, according to the U.S. Department of Health and Human Services.SHealth and Human Services Department

Purchasing a long-term care insurance policy is one way to prepare for future care costs.

According to Andy Tate, a certified financial planner with Minneapolis-based Tate & Setterlund, “I had a really tough case where I did a retirement analysis for a couple and they were fine if nothing happened, but if anything happened to their health, it would have been tragic,”They would not have been able to retire if they had done so.

To protect themselves from those crippling costs, the couple purchased a long-term care insurance policy.

[One of them] was diagnosed with brain cancer six months later.Tate says, “That completely changed my perspective on long-term care insurance.”Many insurance agents sell it as a product, but it should really be considered as part of a comprehensive financial plan.

Begin making plans while you are still young and healthy.

Shutterstock/Josu Ozkaritz

Therese Nicklas of U.S. Financial Services in Braintree, Massachusetts, is a certified financial planner.SThe product is better described as lifestyle insurance rather than wealth management.

According to Nicklas, whose mother is in a nursing home, “most people do not have a goal of landing in one,” no matter how good the nursing home is.

According to Nicklas, planning can include transferring costs to an insurance policy and saving.Having a well-crafted policy and starting while you are young and healthy – preferably before the age of 60 – will provide you with benefits not currently available.

Look into other financial products as a possible alternative to paying for long-term care.

Health savings account

Shutterstock/Andrii Yalanskyi

While long-term care insurance may be a good fit for some people, others may not be.

There are a number of pre-existing conditions that make qualifying for long-term care insurance nearly impossible.These are some of them:

  • Alzheimer’s disease is a type of dementia that causes memory loss.
  • Cystic fibrosis is a disease that affects the lungs.
  • Parkinson’s disease is a neurological disorder that affects people
  • Schizophrenia is a mental illness that affects people.

Furthermore, for many people, coverage may be prohibitively expensive.

Other possibilities include:

  • HSAs are similar to personal savings accounts, except that the money in them is used to pay for medical expenses.
  • Long-term care rider annuity These are single-premium fixed annuities with a long-term care feature to cover those costs.
  • A deferred lifetime annuity allows you to predict when you might need long-term care and buy a lifetime annuity to start at that time.If you are sick, the money can be used to pay for your medical bills.If you are in good health, it can be used to supplement your income and improve your quality of life.
  • Life insurance with a long-term care rider This product combines life and long-term care insurance, with the added benefit of benefits being paid whether or not you require long-term care.

Traditional savings accounts are also viable options, but building up enough of a nest egg to cover what could be upwards of $200,000 in annual expenses could be difficult.

Whatever the case may be, it is critical that you complete your homework first.

Nicklas says that knowing the advantages and options available will help you get the most out of your purchase.

Discuss your care with your family.

Happy senior couple wave having video call on laptop talking with relatives, smiling aged husband and wife sit on couch at home communicating via online using computer. Elderly and technology concept

Shutterstock fizkes

Many families expect to be able to rely on one another for long-term care.However, the reality is that this can be both financially and emotionally challenging for the caregiver.

Deplete your resources until you are eligible for Medicaid.

An older businessman gestures thumbs up


The majority of long-term care costs are not covered by Medicare, the federal health insurance program aimed primarily at seniors.The most common way to pay for long-term care is to deplete your assets and then apply for Medicaid, a federal-state health-care program for the poorest citizens.

This is a viable option, but the quality of care provided by Medicaid is unlikely to meet your expectations.

Rely on a reliable source.

Financial adviser

Shutterstock Potstock

Consult a professional if you’re unsure which product will best meet your future needs.

Before you buy, get a recommendation from a trusted source for someone who specializes in long-term care planning, according to Nicklas.

Contact a financial planner today to begin planning for your future.

Calculate your overall retirement strategy and budget for long-term care.

Couple sitting down to budget


A good retirement calculator can assist you in determining your ability to fund long-term care and weighing the benefits and drawbacks of various options.

The NewRetirement Retirement Calculator predicts when you might need care and how much it will cost.

You can also experiment with different funding scenarios for such care.How does an annuity fit into your long-term care insurance strategy?

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