Hiring a Long Term Care Consultant
Hiring a long term Care Consultant provides many benefits for your long term care needs.
Anytime we are out and about, it is obvious that the US Population is aging. The fact that people are living longer is a good thing in many ways. However, there is a concern. Are retirement plans funded to last for the longer life?
In addition, we are told by the Dept of Health and Human Services that for those who live to 65 and older will have a 70% chance of needing long term health care. The cost of long term health care often is not figured into the calculations of retirement goals. Consequently, retirement funds may have to be used for personal health care services.
Of course, no one knows how much or when services will be needed. When there is a change in health and care services are needed, the entire family is affected.
Also, women typically care for the men in the family. It may be necessary to hire part time help when the physical strength of the woman is not adequate. Over time she may spend a significant amount of their savings. Here is an alarming statistic ;”Of the elderly living in poverty, 75% are women and 80% of those women were not poor when their husbands were alive” (1).
Planning is so important.
Let’s explore some ideas for creating a plan. A plan can be basic or very comprehensive, depending on financial resources and the comfort level of the individual or family.
Retirement planning decisions have an impact on the cost of long term care:
- What geographical area will you live in as the costs of care vary dramatically?
- What life style do you wish to have? Be sure to include family obligations.
- What is the current cost of care in your area?
- What financial resources do you hope to have and what amount will be available for care needs?
Here are some resources for you to consider:
Long term care insurance creates an account of money to use to pay for care services. The full account is available immediately. The premium reflects the high cost of services and the high probability of needing the services. Often an annual premium is equivalent to a monthly cost of care.
The insurance is medically underwritten. Unfortunately it is not available to everyone who would like to own it.
- Annuities, the fixed variety, are a safe resource which protect the capital and can provide a lifetime income for as long as you live. You can use annuities as a way to increase savings on a tax deferred bases and then as an income stream when you need it.
- Life insurance policy can provide a tax free benefit to reimburse family for money spent on care needed prior to death.
- Accelerated death benefit provision of a life insurance policy provides an income stream. This option permits a partial withdrawal of the death benefit for health costs.
- Linked products, also known as hybrids, combine life insurance with long term care rider. When care is needed, the rider is activated and draws money from the policy. At death, the balance of the money, if any, is paid.
- Reverse mortgage is a way of using the equity in a residence. A reverse mortgage allows the owner of the residence to convert some of the equity into cash while retaining ownership. A line of credit is established or a lump sum is paid to the owner. The money can be used to pay for long term care insurance premium or for health care expenses. The minimum age to qualify is 62 years. The loan must be paid at death of the owner or when the residence is sold.
- Medicare pays for skilled care. It will pay for personal care for a short period. It is not a type of long term care policy.(2)
- Federal tax deduction. Long term care insurance premiums and other unreimbursed long term care expenses can be included in the medical deduction on tax form 1040.
- Tax credit of 20% of a long term care insurance premium is provided by NY State. The credit can be taken every year that the premium is paid. There is neither a limitation on income nor limits on age. Other states have tax credits and deductions. (3)
(1) Kim Kiyosaki, Author of Rich Women
(2) Medicare and You 2014, page 143, Section 11-Definitions
(3) www.nancygouldltc.com, Resource page
(4) www.nancygouldltc.com, Resource page “One Page 2014 Tax Summary”