James and Irene Norris have been married for 65 years, raised two sons, and owned and operated a small business together for more than 50 years. But there was one thing they didn’t plan on: long-term care.
Once they closed their small business and became too frail to care for each other, they became trapped in an unfortunate financial situation. After encountering several medical problems, they were forced to choose some sort of custodial care and moved into a nursing home. Their savings quickly disappeared when faced with the heavy monthly payments. Medicare offered little support because it does not cover stays in nursing homes for extended periods of time
The bills continued to come in, and the Norris’ soon realized they no longer had adequate financial resources to survive. They were forced to make their most painful decision yet. In order to qualify for Medicaid, they had to sell everything they had worked their whole lives to earn. Their prized possessions that had been carefully collected through the years were gone in an instant, sold to pay the medical bills that had piled up.
Medicaid requirements were only part of the reason they had to sell; the other was a failure to plan adequately. The Norris family had never consulted a financial planner. Had they spent even a small amount of time with a financial services professional earlier in life, they might have learned a few techniques that would have allowed them to hold on to more assets and still legally qualify for Medicaid.
Once on Medicaid, their options were limited. They were forced to choose only the care that Medicaid would cover, not necessarily what would truly make them comfortable in their final years. Finally, when they passed away, the family was left with thousands of dollars worth of debt from medical expenses and funeral arrangements.
This situation is not uncommon. It happens every day to hundreds of middle and upper-income families across the United States even though it could be prevented with some basic preparation. It is important to remember adequate long-term care planning can help you hold on to the things you worked so hard to attain – instead of watching your life’s work slip away because of costly medical expenses. Taking a small amount of time to decide what options you and your family will have in the future can also ensure you have something left to pass on to the next generation.
When is long-term care needed?
Long-term care is generally necessary when someone can no longer perform basic tasks for themselves, whether it’s getting out of a chair, cooking a meal or bathing. Sometimes the need is created by physical impairments brought on by aging, strokes or accidents. In other instances, mental deterioration is the primary cause. Nearly two-thirds of all nursing home residents suffer from Alzheimer’s disease or other cognitive impairments1. This can be extremely costly and can destroy your financial security quicker than you think.
What long-term care options will I have?
While it is true that nursing home stays account for a large percentage of long-term care, other choices may be available. Insurance that not only helps cover costs of nursing homes, but also provides coverage for assisted living facilities and even in-home health care can be considered. Discussing your options with a trusted financial professional now can improve the chances you can spend your final years without added financial stress and anxiety and can ensure the dreams you achieved in life don’t disappear overnight.
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. Written by Securities America for distribution by Brad Werner.