Affording Long-Term Care for an Aging Parent

The US Department of Health and Human Resources published a survey in 2015 on the costs of long-term care for aging seniors. It’s estimated that average costs related to long-term care can be close to $138,000 per senior per year and that approximately 1 in 7 seniors may need this type of care for 5 years or more. Although these costs may seem astronomical, there are ways to plan ahead and make smart decisions for affording long-term care.

Start the Planning Process Early

Knowing what you can afford before the time arrives is key to avoiding extra costs. Create a budget that works for your family and think through each and every expense, deciding what’s necessary and what can be cut. You don’t want to be faced with the decision of sacrificing needed amenities or comfort for your loved one by coming up short in your budget.

Take Advantage of Employer Benefits

If mom hasn’t yet punched her final timesheet and settled into retirement, take a look at her current employer benefits and help her max out as many benefits as she can. Many companies offer retirement funds and healthcare savings that can help mom jumpstart her savings. 

Look into mom’s 401K contributions and if possible, contribute the maximum amount that the company will match. If mom isn’t able to do this on her own, consider ways to help her with other bills in order for her to hit the company’s maximum. Don’t leave this money on the table as this is an easy way to let the savings add up over mom’s working years.

Employer benefits usually include several types of medical and health savings accounts, so take an afternoon to sit down with mom and review her options before the next renewal period. Companies update their benefits regularly, so it’s important to ensure that mom has the most relevant options for her future, not just what worked for her in the past.

Choose Insurance Policies with Long-Term Care in Mind

Insurance can easily become one of the most confusing items mom may deal with, and it’s also one of the most necessary. If mom is still working, she likely has employer-based insurance, but it’s always good to research new policies that can work even harder at providing the funding for future care.

Long-term care options are often neglected until an individual is in their 50s or 60s, but you don’t need to wait. Insurance companies can provide policies for individuals who are much younger, cutting premium costs way down. Don’t wait until long-term care is needed to buy the policies; insurance companies make far more with last-minute policies, so plan as early as you can.

If you’re past the time for early planning, there may still be options. Many life insurance policies allow for adding a rider that can cover the additional costs of long-term care. Talk with your agent and see what’s best for your unique situation.

Decide on Life Insurance

There are two main types of life insurance, term and whole life insurance, and a financial advisor can be helpful in determining what’s best for your family. If your family doesn’t have much debt to begin with, term life insurance may be a smarter investment as it offers death benefits and is much more affordable. This option allows for peace of mind that your family is taken care of if a death occurs within a certain time frame, or term, and can also be converted into a whole life policy if your needs change. 

On the contrary, whole life insurance can provide additional benefits for your family, including the option to borrow against the policy if a major expense happens before the end of life. While the premiums will be much higher than term life insurance, having the assurance that an unexpected expense won’t destroy your savings can be worth the extra spend now. And as most insurance policies go, the sooner you purchase one, the cheaper your premiums will be.

Claim Earned Veteran’s Benefits 

If mom or her spouse served in the military, she may qualify for veteran’s benefits. The US Department of Veteran’s Affairs offers benefits that can help with long-term care that most people aren’t aware of, even veterans. Contact the US Department of Veteran’s Affairs and find out what her options are.

If you’re considering affordability for end of life care for your aging mom, it’s likely already time to start searching for where she will start the next phase of her life. The Williams Home, Inc. provides assisted living options for ladies in the Lynchburg, Virginia area, and we would love to have you visit. Schedule a tour today!