When planning for retirement, many times one item that gets overlooked is long-term care insurance. It can be expensive, and many people choose not to purchase it because they are not sure they will ever need it.
RumboughConsider these statistics from the South Carolina Alzheimer’s Resource Coordination Center: 9 percent of South Carolinians age 65 and older have Alzheimer’s disease or related disorder, with the percentage climbing to 27 percent by age 85. Most people fitting into this category actually have Alzheimer’s disease, most are women, and most live in the community rather than in a nursing facility. These numbers are in addition to those who have physical problems requiring skilled care.
Because of inadequate preparation, many times the financial and physical burden of care falls on family members and friends. The financial burden can be eased, however, if the patient has previously provided resources necessary for that care.
It is important to consider these facts when planning what you need to fund your retirement, both as a healthy person and one who may not be so healthy. Long-term care insurance is much cheaper than having to pay full price in a skilled nursing facility. It is well worth the effort to look into various companies that offer this insurance and determine what is right for you. Remember, you don’t need to purchase enough to fully fund your care, as you will probably have other income sources that will help. In addition, many companies offer flexible plans that will allow for in-home care under certain circumstances, which extends the life of the benefits. When looking, be sure to consider the company’s underlying financial stability, and the plate of services the policy offers. The old saying “You get what you pay for” applies more often than not in this area.
Questions? Call an independent insurance agent, one who offers information on several companies, not just one.
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.