Long-term health care costs can put retirees’ plans at risk
The Center for Retirement Research at Boston College reports that the cost of health care today will reduce the quality of life and impact the lifestyle for two-thirds of today’s retirees. A nursing home room can cost up to $77,000, and in-home care can run $20,000.
Paul Ballew, a senior Vice President at Nationwide Mutual Insurance Co. states that “this is the No. 1 issue staring us in the face over the next decade.”
Alicia Munnell, director of the Center of Retirement Research, says that the warning needs to be sounded now, and that with the hit taken by retirement accounts recently, people are unprepared for the future. Excessive spending and inadequate savings have accelerated this crisis.
Paying for retirement care can be mitigated by relying on Medicaid, buying long-term care insurance, selling a home, or utilizing reverse mortgage. Some people have fixed annuities or other products that guarantee payments to beneficiaries upon death in addition to providing long term health care coverage if needed.
Although 48 percent of long-term care recipients and their families pay long-term care costs out of their own pocket, there are several reasons why so few people buy long-term care insurance. Two of those reasons are the cost, and the fact that people are denied coverage because they wait until they are in poor health and then denied.
It is estimated that one-third of people age 65 today will need to enter a nursing home for at least three months.
Source: Atlanta-Journal Constitution