Money and aging can change the course of your family’s future not only in the immediate but for generations to come. When we think about generational wealth, or wealth in general, aging probably isn’t the first thing that comes to mind… but here’s why it matters.
The average cost of a caregiver is roughly $25/hour, bringing the cost of 8 hours of care per day to over 70,000 annually. For 24 hour a day care, you will be looking at a quarter of a MILLION dollars per year, at least.
Are community settings more affordable? Not really. The average assisted living is about 60,000 and up annually and a nursing home setting, where 1 out of 4 Americans are likely to end up, is over $150,000 a year.
How does the average American afford this? Depending on your financial picture, you may be utilizing your savings, investments, and…selling the family home to pay for care? Not ideal! This is where some proper planning can make all the difference.
First let’s look at what is Medicaid and Medicare. What’s the difference and what do they cover? If you aren’t sure, you’re not alone! There are many misconceptions and misinformation around both of these programs. Medicare is your health insurance coverage that generally kicks in at age 65 (unless qualified thought a disability) that will be used for hospital coverage and short term rehabilitation. What is does NOT cover, is home care beyond a short term need. To have in-home care for several hours, on-going, you will need to pay privately or utilize a Medicaid funded program. Medicaid eligibility is based on assets- which is where financial planning and education may be very relevant if you are not a multi-millionaire.
There are also programs for veterans, long term care insurance, and grant programs through your local office for the aging that may assist for care costs as well.
We don’t have a crystal ball telling us what medical ailments are in our future, but the odds are NOT in our favor that we will pass peacefully in our sleep at 90 something years old without any medical interventions needed. What comes with medical needs are choices, costs and a time that can bring families together or tear them apart. If you haven’t seen it happen in your family, ask a friend.
So, who can help?.. There are three professionals who should be part of this planning process. Your financial advisor, an estate planning attorney, and an Aging Life Care Professional. Together they can help you manage your financial options, set up trusts and plan for Medicaid when applicable, and understand the options and cost of services in your area. Taking this methodical and logical approach will also open up the dialogue among families for difficult conversations, making the chances of not only your family’s finances remaining in tact, but your legacy too.