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Americans are living increasingly longer lives. While it's fabulous to know that we're living longer, statistics also show that two in every five people who reach the age of 65 will eventually require some form of long-term care - and this kind of care doesn't come cheap.

As a matter of fact, a year's stay in a nursing home can cost between $40,000 and $80,000 or more, depending on where you live and type of nursing home you choose. Unfortunately, Medicare does not cover long-term care expenses.

So, how can seniors handle the skyrocketing costs of a potential long-term care event? The answer is simple: long-term care insurance (LTCI). Without an LTC umbrella, a nursing home stay or another long-term care event could devastate your family's finances. This is why it's critical for each and every baby boomerto plan ahead for a potentially expensive long-term care event.

A Booming Problem
As America's 77 million baby boomers continue to age, the number of people in need of long-term care will likely skyrocket in the next 30 years. Estimates show that by 2040, there will be 14 million elderly Americans age 85 years or older - the age group that is most likely to require long-term care. 

As a result, senior care will likely outpace the need of child care.

The Shocking Costs
If you or a loved one suffers from an illness that requires long-term care, get ready to cough up some serious cash. While prices vary based on where you live and the type of care you require, one thing is consistent across the board when it comes to long term care: it's phenomenally expensive.

Just take a look at the average costs of long-term care in the U.S.:

  • $5,566 a month for a semi-private nursing home room
  • $6,266 a month for a private nursing home room
  • $2,968 a month for care in an assisted living unit
  • $19 per hour for a home health aide

While this may not seem like a huge expense, these costs can quickly add up and eat away at your nest egg. For example, let's say you hire a home aide to assist your husband just three times a week for four hours. Because a home health aide charges $19 an hour on average, that would come out to $228 a week. That adds up to nearly $12,000 a year. Cha-ching!

No One Can Afford To Self-Insure
If you have a plump, healthy nest egg, $12,000 may seem like a drop in the bucket. And you're not alone - many Boomers with a high net worth assume that they'd be able to pay for the costs of long-term care out of their own fat wallets. (The latest offerings are markedly different, with more coverage and bundling options.

However, you're probably underestimating just how much damage a long-term care event can do to your finances. Consider this: the national average daily rate for a private room in a Medicare-certified nursing home is $210. Therefore, a one-year stay would cost $76,650. That adds up to a whopping $383,250 for a five-year stay.

Still not ruffled? Let's say you and your wife are in your mid-50s, and you have $2 million in liquid assets, not including your home. With that much cash, you probably assume that you'd have more than enough funds to cover a five-year stay in a private nursing home room.

Read More: Source

Posted 8:12 AM  View Comments

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