4 Things Soon-To-Be Retired Boomers Need To Know About Long-Term Care
Written by
Chris Adam
Edited by
Amen Oyiboke
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It can be an extremely upsetting situation when a family member needs long-term care. As reported by the Wall Street Journal, demand and costs for care are rising as concerns grow over staffing for the industry.
If you’re a soon-to-be retired boomer, there are some key things you need to know about possibly requiring help with living needs in your later years.
Long-Term Care Can Be a Life-Changing Experience
According to Rhonda Vry-Bills, CLTC, from Long Term Care Strategies, “I wish more people would understand or treat an extended care event as a life-changing income event and not a one-time deductible.”
Per Vry-Bills, if you need long-term care and it costs around $13,000 per month for an undetermined length of time, it may be a struggle to pay for that out of your retirement income. Per CareScout, the cost of assisted living communities, nursing home care, and homemaker services all rose around 10% in 2024, while the cost of aides for home health care rose about 3%.
You May Be Surprised Who Needs Long-Term Care
Don’t just expect other retirees to need long-term care. Here’s a look at the risk for people aged 65 and older from the Center for Retirement Research at Boston College:
- About 20% of retirees will need no long-term care support.
- Around 20% of retirees are likely to have a severe need.
- An estimated 25% will have low needs.
- Approximately 37% will have moderate needs.
You May Be Thinking Incorrectly About Who Pays
As reported by the New York Times, there’s widespread confusion over what Medicare and Medicaid cover and pay for when it comes to long-term care. In general, Medicare covers up to 100 days after a hospitalization for a stay in a skilled nursing facility. Medicaid covers long-term care services for people with low income and assets.
“No one wants to dip into their 401K to pay their cell phone bill and certainly not to pay for a bill for extended care,” Vry-Bills said. “When retirees do not have the monthly income to pay for home care or facility care, they have no other choice to go to their portfolio.”
Vry-Bills added another important consideration is taxes. You may face unexpected taxes when you take out money you intended for retirement purposes to cover long-term care.
You Need To Think About Others
Stop and think for a moment about who’d be impacted if you needed long-term care.
“When one partner or spouse needs care, their income goes to pay their bill, leaving the community spouse to pay for all of the household expenses and only one income to pay it,” Vry-Bills said. “Meanwhile, the spouse needing care is invading the portfolio, which is creating taxes, and reducing the overall value of the account, which is designed to generate income for the community spouse.”
Vry-Bills said the need for long-term care can also put a strain on adult children who want to support their aging parents. This situation can call for family discussions to decide the best path forward.
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