Planning for Long-Term Care During Retirement

It can be tempting for savers to get caught up in the monetary value of their savings while failing to fully account for individual aspects of their retirement needs. Failing to think ahead about health insurance, life insurance and contingencies for long-term care may leave retirees with more limited options when the need becomes inescapable.

Starting Early May Preserve Your Choices and Options

Some aspects of long-term care preparation become more expensive the longer you wait. Preparing in advance, before your health begins to decline, can allow you to better control costs and preserve your options.

Lower Insurance Premiums

Long-term care insurance premiums are largely determined by the account holder’s age and health. Locking in premiums early when you are still relatively young and healthy can have long-term savings benefits.

Enhanced Care Choices

People often have distinct long-term care preferences. Some would prefer in-home care or to stay in a specific assisted living facility they research and choose in advance. Many retirees appreciate having the option to make their own decisions regarding facilities and care types, but these decisions are sometimes left up to adult children or limited by dwindling resources in a person’s later years.

In some cases, urgent requirements due to serious or unforeseen health events might force retirees into choosing higher-cost options that could potentially have been avoided by planning in advance.

Tax-Advantaged Savings

Although it may seem far off, many workers experience long-term benefits from building their HSA with tax-free contributions and tax-free growth in anticipation of using those funds for retirement. While these funds can be great for covering routine medical expenses that aren’t covered by Medicare plans, they can also be put toward long-term care expenses decades in the future.

Medicaid Planning

Eligible retirees who meet asset limit qualifications may be entitled to some long-term care benefits from Medicaid. Some early planning strategies, like asset protection and trust creation, may allow retirement savers to qualify for Medicaid in the future without depleting all their assets.

Modifying Your Home for More Comfortable Aging in Place

Even if you don’t plan on using in-home care, home modifications that make your house safer for occupants with limited mobility may allow you to remain in your home for longer. Modifications like filling in sunken living rooms to remove steps from your home, adding grab bars and handrails in bathrooms, improving lighting, widening doorways, or installing ramps can be completed in advance and allow many retirees to remain at home safely for longer.

Being able to put off assisted living for even a couple years thanks to a safer home environment can lead to cost savings and a more satisfying quality of life for some seniors.

Avoiding Crisis Decisions

Far too many seniors and families are put in situations where they must make rushed, last-minute long-term care decisions due to a sudden health crisis. These scenarios can significantly limit a family’s choices to what’s nearby and has available room at the moment. Crisis decisions can lead to both higher costs and a less desirable care option that reduces quality of life.

Maybe the most valuable aspect of thorough long-term care planning is preventing these scenarios from arising.

Inflation Protection

Some long-term care contracts allow beneficiaries to lock in costs for services or products that might rise in the future due to inflation. Investing in inflation-protected assets in the leadup to retirement has benefits for every aspect of retirement financing, including long-term care planning.

Long-Term Care Insurance Options

There are a variety of long-term care insurance options, including traditional long-term care insurance for nursing homes, in-home care, and assisted living. Retirement savers can also invest in hybrid life insurance with long-term care riders that combine life insurance with long-term care coverage. If a retiree never requires long-term care, the life insurance benefit pays out as normal.

Many retirees also have access to short-term care policies designed to provide coverage for less than one year. These can be particularly useful for unexpected injuries, surgery recovery, or nursing care following an illness.

Providing Long-Term Care Planning Guidance to Phoenix Retirement Savers

Fullerton Financial Planning is committed to helping Phoenix retirees plan in advance for long-term care needs.

Our retirement planning advisors can explain your various policy options as well as tax and estate planning strategies so you can make informed choices and feel confident about your long-term preparedness.

Call us at (623) 974-0300 to schedule an appointment today.