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Understanding Long-Term Care

Understanding the types of long-term-care services—and what those services could cost—may be critical.


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Addressing the potential threat of long-term care expenses may be one of the biggest financial challenges for individuals who are developing a retirement strategy.

The U.S. Department of Health and Human Services estimates that 70% of people over age 65 can expect to need long-term care services at some point in their lives.¹ So understanding the various types of long-term care services – and what those services cost – is critical as you consider your retirement approach.

What is Long-Term Care?

Long-term care is not a single activity. It refers to a variety of medical and non-medical services needed by those who have a chronic illness or disability – most commonly associated with aging.

Long-term care can include everything from assistance with activities of daily living – help dressing, bathing, using the bathroom, or even driving to the store – to more intensive therapeutic and medical care requiring the services of skilled medical personnel.

Tip: Won’t Medicare Pay for It? After a three–day hospital stay, Medicare will cover the first 20 days in a skilled nursing care facility completely. For the next 80 days, it will cover all but $157.50 per day. And after 100 days, it won’t cover anything. Source: Centers for Medicare and Medicaid Services, 2015

Long-term care may be provided at home, at a community center, in an assisted living facility, or in a skilled nursing home. And long-term care is not exclusively for the elderly; it is possible to need long-term care at any age.

How Much Does Long-Term Care Cost?

Long-term care costs vary state-by-state, and region-by-region. The national average for care in a skilled care facility (single occupancy in a nursing home) is $91,250 a year. The national average for care in an assisted living center (single occupancy) is $43,200 a year. Home health aides cost a median $20 per hour, but that rate may increase when a licensed nurse is required.²

What are payment options?

Often, long-term care us provided by family and friends. Providing care can be a burden, however, and that need for assistance tends to increase with age.

Fast Fact: Getting Care Now. Some 1.4 million adults live in skilled nursing facilities. Another 4.8 million remain in their own homes but get help with personal care from other people. Sources: CDC, 2015. (Data from 2013 report is the latest available.)

Individuals who would rather not burden their family and friends have two main options for covering the cost of long-term care: they can choose to self-insure or they can purchase long-term care insurance.

Many self-insure by default – simply because they haven’t made other arrangements. Those who self-insure may depend on personal savings and investments to fund any long-term care needs. The other approach is to consider purchasing long-term care insurance, which can cover all levels of care, from skilled care to custodial care to in-home assistance.

When it comes to addressing your long-term care needs, many look to select a strategy that may help them protect assets, preserve dignity, and maintain independence. If those concept are important to you, consider your approach for long-term care.


Source: U.S. News and World Report, November 13, 2015

Source: U.S. News and World Report, November 13, 2015

¹ U.S. Department of Health and Human Services, 2015
² Genworth 2015 Cost of Care Survey

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2018 FMG Suite.

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DISCLAIMER: This website is for informational purposes only and does not constitute a complete description of our investment services or performance. This website is in no way a solicitation or offer to sell securities or investment advisory services except, where applicable, in states where we are registered or where an exemption or exclusion from such registration exists. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY ‘LINKED’ WEBSITE.

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