The unexpected cost of long-term care
The latest Genworth “Cost of Care” report may come as a shock to those considering the alternatives.
The median national monthly cost of assisted living is now $4,500 per month – and much higher in major urban areas.
The cost of a semi-private room in a nursing home now averages $7,800 per month. And the cost of a private nursing home room has soared to $8,700 per month.
The national average cost of a home health aide was $27 per hour in 2021.
Again, those are national figures, but costs in large cities or areas with fewer workers can be significantly higher. Plus, every year inflation takes its toll, and prices rise.
There are two ways to deal with the costs of long-term care. One is to plan ahead and buy long-term care insurance. A newer generation of long-term care policies combines life insurance with care benefits. If care is not needed or used, the named beneficiary receives the death benefit. Premiums cannot rise.
The other alternative is “Medicaid planning” – the process of either spending down or transferring assets in order to qualify for state-funded care. That will be the subject of a future column. In the meantime, I’m hoping that both adult children and aging parents will use this column to broach the topic of planning for long-term care costs.
It’s a discussion that can save both money and emotional heartache down the road. And that’s The Savage Truth.
(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)
©2023 Terry Savage. Distributed by Tribune Content Agency, LLC.