As we live longer, more than half of Americans age 65 and older will need some type of long term care in their lifetime. And the costs associated with long term care can be quite expensive. However, there is a lot of confusion on what is involved with long term care. And too many people don’t know related expenses are not covered by traditional healthcare insurance. Plus, there are limitations and requirements on government benefits like Medicare and Medicaid which may only pay a fraction of the expenses—and only after all your other financial resources are exhausted.

Planning to pay for long term care is an important part of retirement planning, but it is often overlooked. Only one in five Americans earn enough money to fund their long term care costs without sacrificing other financial goals. Everyone else needs to understand what’s involved in long term care and how to estimate the associated costs.

Atlanta based long term care expert, Corey Rieck, MBA, CLTC, has been solely focused for over 20 years on helping individuals, families and employees plan to cover expenses for extended personal care. Rieck often works with financial planners and CPAs who help their clients weigh the pros and cons of taking steps to make an informed decision to cover long term care expenses.

Private long term care can cost more than $250 per day in and around cities like Atlanta. That is $7,500 per month and $90,000 annually. Long term care costs vary by level of service and the location of where care is received. These costs can increase 3% - 5% annually. If long term care expenses are unfunded, long term care costs can quickly undermine a person’s overall financial plan and can negatively impact retirement planning.

“Simply defined, long term care becomes necessary when an individual can no longer do at least two or more routine daily activities without assistance. For instance, a person may need help with getting bathed, dressed or fed,” Rieck explains. 

Rieck shares, “Almost everyone has a family story about when a disabled, cognitively impaired or aging loved one could no longer take care of themselves. The emotional stress in these instances does not need to be elevated by relational and financial stress. Long term care planning reduces the need for family members to become daily caregivers while leaving financial assets intact to be used as intended.”

Source: 2018 Long-Term Care Trend poll, The Associated Press-NORC Center for Public Affairs Research