How financially devastating are the costs of long term care?

Phyllis Shelton is an expert on long-term care. In her book “Long-Term Care: Your Financial Planning Guide” she interviewed a financial columnist from the Chicago Sun-Times. His quote is most revealing:

“The most devastating thing that could happen to your financial future is not a bear market. It’s the need for long-term care - - for yourself, your spouse, or your parents.”
-Terry Savage, Chicago Sun-Times Financial Columnist

That will certainly cause you to stop and think. How many times have you worried about the return your investments are generating? Or been concerned that we are entering a recession and your stocks will not perform well?

Now think, how many times have you worried about what’s going to happen to all your investments and assets if you need long-term care?

If you’re like most people, you probably haven’t given it much thought. Or if you have thought about it, you might assume that your health plan or Medicare will cover your long-term care needs. It won’t cover your long-term care expenses. You have to take other actions to protect your assets and your independence.

If you think the chances of needing long-term care are low, think again.

You have a 1 in 1,200 chance of losing everything in a house fire. You have a 1 in 240 chance of a major auto accident. Would you go without home or auto insurance?

But you have a 1 in 2 chance (50%!) of needing long-term care at some point in your life.

So the important question at this point is, “If I have a 50% chance of needing long-term care, how expensive is it?”

An assisted living facility can be expensive, with a national average of $32,573 per year. In Tennessee you can expect to pay $27,409 per year on average.

The national average cost of home health care is estimated at over $48,282 per year. But in Tennessee the estimated annual cost of home health care is $42,094 based on 50 hours of care per week. That comes out to about $16.19 per hour for licensed care. If you need more than 50 hours of care a week, expect to pay more.

The nursing home is the most expensive route to go with long term care, but sometimes the only choice. If you live in Tennessee, the average annual cost of a nursing home stay is $59,276.

So let’s recap. If you live in Tennessee, these are the average annual costs you can expect to pay for different care:

Assisted Living Facility - $27,409
Home Health Care - $42,094
Nursing Home – $59,276

No wonder 70% of single people without long term care insurance are impoverished within one year of entering a nursing home. And 50% of couples are impoverished within a year after one spouse enters a nursing home.

That’s a staggering number. Everything these people worked for their whole life was gone in one year.

This doesn’t have to happen. There is protection against this risk.

My recommendation… If you have assets that are at risk of being wiped out by a long term care situation, look into protecting them. If you can afford it, the right long term care insurance policy will allow you to have dignified care and protect your hard earned assets.

Talk to a trusted insurance agent. You’ve got nothing to lose. If you don’t look into it, you’ve got a lot you could lose.