70% of seniors will face this giant expense – and many are unprepared


When planning for retirement, workers need to consider a variety of future expenses. These include housing, recreation and other hobbies, and health care.

Now, it’s no secret that medical costs tend to increase with age. And it’s a fairly well-known fact that health care coverage under Medicare is by no means free, so it’s important that workers put money aside to cover future medical bills, whether it’s filling out their 401(k)s and IRAs or funding health savings accounts.

But a big misconception about Medicare is that coverage is comprehensive. That’s not the truth. Not only Medicare not cover day-to-day services like eye exams and dental care, but that also won’t cover a major expense that can wreak havoc on seniors’ finances – long-term care. And the sooner you realize this, the sooner you can make a plan so you and your loved ones aren’t stuck with incredibly high costs.

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Avoid a financial shock

It’s estimated that 70% of seniors will need some type of long-term care in their lifetime, and the costs could be astronomical.

Last year, the annual national median cost of an assisted living facility was $54,000, according to Genworth. But that’s just the median cost, and in some parts of the country, assisted living costs a lot more.

Then there is nursing home care. Last year, the annual national median cost of a private room was $108,405. And while home health aides are less expensive, the median annual cost for this service last year was $61,776.

Now, you might think that if you end up needing long-term care, you can just go to your health insurance plan to pay the tab. But it’s important to know that Medicare will usually not cover the cost of long-term care, largely because it won’t pay for child care or daily living assistance.

What Medicare might pay for is home care or nursing facility care following an accident or illness. But there’s a big distinction between that and custodial care — one that often leaves older people and their loved ones saddled with extraordinary bills.

be ready

Increasing your savings is one way to cover the cost of long-term care. But an equally important step to take is to explore your long term care insurance options.

Workers are generally advised to start purchasing this insurance in their mid-50s. Delaying these claims often means ending up with higher premium rates.

Now, long term care insurance isn’t perfect. Some policies only offer limited coverage, and there is a big expense involved in obtaining a policy. But when you look at the numbers above, it’s easy to demonstrate that having long-term care insurance in place is an essential step in protecting you and your family financially.

In a recent survey conducted by HGC Secure, only 10% of respondents said they had long-term care coverage. Admittedly, this was a limited survey of 402 people between the ages of 40 and 64, some of whom are too young to set up this type of insurance.

The thing, though, is that in your mid-fifties, long-term insurance really should be on your radar. While this is an expense you might think you won’t afford, the reality is that you’re more likely to need some type of long-term care than not.


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