No Long-Term Care Insurance? 5 Other Ways To Plan Ahead To Age at Home in Retirement

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Retired Americans who prefer to age at home rather than live in a retirement or assisted living facility will need a lot of money to pay for it. This isn’t a problem for the wealthy. For everyone else, you either need long-term care insurance or some other way to cover the cost of home care assistance, equipment and medical services.

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Although most Americans (70%) prefer to age at home, only 10% have long-term care insurance, CNBC reported, citing a survey from the HCG Secure/Arctos Foundation. This is mainly due to the cost of insurance,

As the AARP noted, the average yearly premium in 2021 for a couple who are both age 55 was $2,050 for a long-term care policy that would pay up to $165,000 of future care costs for each, according to data from the American Association for Long-Term Care Insurance. That figure doesn’t include potential inflation-related adjustments that could push the cost even higher. The averages for an individual man and woman at that age are $950 and $1,050, respectively.

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Even people who can afford the premiums still might not get coverage. About one in five applicants younger than 60 are declined — and that ratio goes up considerably as you get older.

So what options do you have for aging at home if you don’t have a huge nest egg and can’t afford long-term care insurance? Here are five ways you can plan ahead to cover costs.

Tally Up Your Assets

A good first step recommended by the AARP is to put together an at-home care budget based on your financial assets. These might include annuities, investments and savings as well as life insurance policies that can be used for qualified home-care expenses through cash value.

You could also look into taking out a reverse mortgage or home equity loan, though this is risky. You might run out of home equity while you still need the care, and older homeowners are frequently targeted by reverse-mortgage scams.

Research Government Help

Financial assistance is available to help pay for in-home care if you don’t have insurance coverage for long-term care and can’t afford to pay out of existing financial resources, according to the AARP. Search the U.S. government’s Eldercare Locator to find your local Area Agency on Aging. It can lead you to agencies or nonprofits that might help pay for in-home care.

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You can also research the National Council on Aging’s BenefitsCheckUp to learn which programs you might qualify for.

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Check Your Medicare Benefits

As the AARP noted, Original Medicare can cover the full cost of medically necessary home healthcare on a limited basis if you are unable to leave home without assistance. These services might include skilled nursing care; occupational, physical and speech therapy; and home health aide services.

Original Medicare will also cover routine home care such as help with bathing and dressing, as well as basic medical care like checking vital signs and dressing wounds. You might get even more care under a Medicare Advantage plan.

Find Out What Medicaid Covers

Similarly, Medicaid pays for certain in-home care services. More than half of all Medicaid spending on long-term care goes toward home- and community-based services, the AARP said. Keep in mind that each state has different rules in terms of Medicaid services, eligibility and benefits.

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Offer Caregivers Room and Board

If you have the space in your home, you can offer room and board in exchange for at-home assistance. Taylor Kovar, CFP and CEO of Kovar Wealth Management in Texas, told CNBC this is an especially popular option in college towns. Just be sure to vet caregivers thoroughly before taking them in.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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