FINANCIAL FOCUS: Plan for long-term care costs

Joe Faulk

Joe Faulk

Published: Wednesday, November 6, 2013 at 02:08 PM.

November is Long-term Care Awareness Month. And when it comes to long-term care — such as a stay in a nursing home or home health aides' services — you’ll want to plan for potential costs.

You might think you’ll always be able to live independently, without requiring assistance — and perhaps you will. However, the odds aren’t necessarily in your favor: About 70 percent of Americans who reach age 65 will need some form of long-term care for an average of three years, according to the U.S. Department of Health and Human Services.

And every type of long-term care is expensive. Consider these numbers, taken from the 2013 Cost of Care Survey produced by Genworth, a financial security company:

• The national average rate for a private room in a nursing home is $83,950 — a 24 percent jump over the past five years. And it’s not much cheaper for a semi-private room in a nursing home — the average cost is $75,405 per year, up 23 percent from five years ago.

• A full-time home health aide costs, on average, $44,479 annually.

If you had to spend more than $80,000 annually for a nursing home, and you needed to stay in that nursing home for several years, what would it do to your savings? How would it affect your financial goals?

Many people think Medicare will pay for long-term care expenses, but Medicare only covers a small percentage of long-term care costs, which means it’s typically up to the individual to foot the bills.

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