People preparing for retirement have to think about their financial stability later in life. They also need to carefully consider the possibility that they may require medical support. Older adults may develop medical or cognitive challenges that affect their ability to live independently.
Some people who attempt to age in place may eventually require in-home nursing support. Other people might need to move into a nursing home or similar long-term care facility. The cost of a bed in a care facility or in-home medical support can be relatively high. The following the most common ways that people cover the costs of long-term care as they age.
With personal savings
Some people have set aside significant amounts of money that allow them to retire in comfort. People with six or seven-figure retirement saving funds can potentially pay out of pocket for rooms in nursing homes and other long-term care. Of course, doing so may diminish what they leave for their loved ones after they die. Exploring the average cost of support can help people predict whether their personal savings can stretch far enough to cover those expenses or not.
With long-term care insurance
Given that long-term care costs can be exceptionally high, some people purchase private insurance policies to cover those costs as they age. Long-term care insurance policies can pay for nursing home and in-home care support expenses.
With Medicaid benefits
Most working professionals and spouses who have supported a wage-earning partner qualify for Medicare after retirement. The different types of Medicare available can provide coverage for an assortment of different care costs. Unfortunately, Medicare typically does not pay for long-term care expenses. People may need to plan ahead to ensure that they are eligible to qualify for Medicaid when the time comes. Typically, planning for Medicaid needs to occur at least five years before people apply. They might otherwise be at risk of a penalty for any transfers and gifts during the 60 months prior to their application.
Considering different options for covering long-term care costs can help those thinking about their needs when they retire. Those who plan ahead can feel more confident about their ability to access support when they are at their most vulnerable.