We Can Help You Prosper

How can people plan for long-term care costs?

On Behalf of | Jun 13, 2024 | Estate Planning |

Most older adults want to live comfortably after they retire. Frequently, the goal is to stay at home for as long as possible in their golden years. Too many older adults assume that they can maintain their health instead of preparing for the worst-case scenario in which their health declines.

They may then end up scrambling to cover the costs of long-term care when they are already medically vulnerable. Long-term care costs require advance planning in part because of how expensive support can be. According to an analysis of nursing home costs across the country, costs in Georgia are moderately high.

The median cost of a month in a nursing home in Georgia in 2021 was $7,011. Inflation over the last few years has likely led to an increase in those monthly expenses. How can older adults plan to cover costs that could burn through their retirement savings in a matter of months?

With special insurance

Some people in the top earning years of their careers start thinking about their support needs later in life. They may purchase long-term care insurance in the hopes of locking in a more affordable policy cost. Long-term care insurance is a form of private coverage that can pay for nursing home support or in-home nursing care when an individual can no longer meet their daily needs on their own.

Unfortunately, long-term care insurance policies tend to have limits on how much they pay and also become prohibitively expensive if people try to acquire policies later in life. Long-term care insurance may not be the best solution for many working adults and those near or already past the age of retirement.

With careful financial planning

Covering long-term care costs requires a comprehensive financial plan for an older adult. They might try to set aside more savings to pay those costs out of pocket. They may also need to change the way that they hold their property if saving that much is unrealistic.

Many attempts at asset protection or long-term care planning involved taking on co-owners for high-value assets. Other people might transfer some of their assets to a trust. The goal is to diminish personal resources to a point where they should not interfere with someone’s eligibility for Medicaid. Medicaid can help cover certain care costs that Medicare does not, including a room in a Georgia nursing home.

Sitting down to discuss this situation with a skilled legal team can help people integrate nursing home expenses into a broader estate plan. Someone’s current circumstances and prior planning attempts can have a major influence on the best way to cover long-term care costs later in life.