The number one reason to be nice to your family this Holiday season is that they are the people who could be changing your diapers in the future. 78% of elderly people who need long term care are receiving that care from one or more family members. From personal experience, I can tell you this is not always a monetary need, it just happens. Like a chicken who slowly gets boiled in a pot of water, you just get in the pot do what needs to be done while it heats up around you. Looking back, if I had access to insurance would I have gotten help earlier? Yes. I definitely would have traded some caregiver hours to be able to be a daughter for longer.
My mother has Alzheimer Disease, and I am part of the Sandwich Generation. Adults taking care of their young children (mine are 9 and 4) and elderly parents. Fortunately, my parents had put their assets in a trust and had completed all those pesky legal documents that you’ve been told to get done. Most importantly, they had gone over these documents and their finances with me so I knew what to do if they needed me. I am grateful they didn’t ignore this because no elder on either of my parents’ sides has lived past age 75 without some dementia. For my own piece of mind, I vow to: live as healthy as possible, get my Omega 3 fish oil, do brain games, work with a great attorney to have all my estate documents in place and share my plan with my kids. Then I will get Long Term Care (LTC) Insurance.
My mother has a lifetime pension and it helps a lot with self-insuring; however, those pensions don’t exist for my generation. The Medicaid route barely works for the generation that has these pensions. For the generations who are accumulating massive IRA accounts, self-insuring or a Medicaid spenddown is painful. Statistically, the average LTC stay before death or discharge is 36 months. In Alaska those 36 months cost $216,000 in assisted living and a whopping $720,000 in an Alaskan nursing home. In my book, that’s worth the roughly $100,000 in premiums I would pay from age 55 to 85. My greatest hope of course will be to look back and say I wasted every premium dollar because I didn’t need it.
There are various ways to address paying for long-term care. 40% of the people who reach age 65 are likely to need long-term care1. Traditional long-term care insurance, assuming you buy it while you still qualify, will likely provide the most dollars toward your care and protect your family the most from having to spend down your assets. There are hybrid policies, combining long-term care insurance into a life insurance policy. We also have clients who specifically designate an investment account to cover their future long-term care needs.
So my long-term care attack plan. 1) Be nice to my kids. 2) Work with an attorney and share my estate plan with my family. 3) Budget Long-Term Care premiums into my financial plan in my late 50’s.
…and my Mom? She’s 2 minutes from my house now in an assisted living home. It costs $8,500 monthly and she’s happy. As I finish this blog I’m heading over for bath night because I am the only one who she allows to bathe her. I’ll put her hair in a soap Mohawk like she did to me. We will laugh like school girls. I will tell her I love her and tuck her in bed and sneak home to my kids who she will never remember. If you want to see my sandwich generation dilemma, check out this film from a few years ago when a filmmaker followed my family while my mom was still living with us and I was pregnant with our second son (www.backingoutoftime.com).
I hope this gets you thinking about making your long-term care plans. For more information on LTC plans you may also want to revisit our past guest author, Allison Payne’s post, Is Long-term Care a Woman’s Issue? There are many options to navigate in these waters, it all starts with a discussion.
Marietta “Ed” Hall, CFP®