Long term care is often an inevitable reality but a possibility we choose to ignore. Avoidance of the long term care question comes from the nature of its seemingly financial complexity and the fearful acknowledgment of our own mortality and those of our loved ones. But long term care does not have to be confusing, or financially impossible. By first recognizing that long term care is a probability, you can explore your options, plan for it financially, and prepare yourself for the emotional and physical challenges that come with both being cared for and being a caregiver.
It Will Happen
The first step in understanding long term care is that it adheres to Murphy’s Law. According to Joseph Birkofer, an advisor with Legacy Asset Management “…the average person has [only] a vague idea of long term care expenses and a lot of hope that their assets will cover them.” No one likes to picture themselves or their loved ones in a scenario where comprehensive long term care is required. But no matter how much one hopes to never to be in this scenario, it is inevitable that it will happen to you or someone you care about. Once this reality is accepted, you can start exploring your options for long term care.
What Are Your Options?
The second step is understanding your options for long term care. Typically when someone thinks of long term care, they think of nursing homes and advanced care institutions. Both of these options provide excellent services and allow families some relief in knowing that their loved ones are in the hands of well trained professional caregivers. Unfortunately, this option is expensive and can put a family in serious financial peril if they have not taken steps to protect their assets. Nursing homes and advanced care situations also fail to provide the familiarity and comfort of one’s own home.
“Free” Care Isn’t Free
At home care provided by family members is usually financially more feasible and comfortable in a long term care scenario. While using family members as caregivers is usually done more out of a necessity than a desired option, a person should be leery of labeling it as “free care”. According to a MetLife study originally published under the AARP article “Valuing the Invaluable” “…family members who end up acting as caregivers can incur losses of $303,880 on average for a typical caregiver.” This dollar value comes from the amount of personal money a caregiver will have to spend, the loss of wages they incur from either cutting back their hours or quitting their jobs to assume a full time role as a caregiver, and the resulting social security and pension losses.
Not Just Financial
Long term care not only comes with financial implications for a family caregiver, but physiological demands as well. According to the article “Valuing the Invaluable” , “…around 88% “of middle-income people, ages 49 to 67, said that family care giving was harder than what they had expected…requiring more patience and emotional strength than they had planned.” While people may plan for the financial burden of family care giving, they often underestimate the physical and emotional toll on the caregiver. The day-today requirements of a caregiver often include cleaning, cooking, and assisting the ones they care for with simple physical activity. This can be physically demanding for the caregiver, and often leaves one in a chronic state of exhaustion. There is also a great emotional toll on caregivers, who sometimes find themselves in the uncomfortable position of having to undress, bathe, and help the ones they care for in the bathroom.
How to Plan Financially for Long Term Care
If you are planning your retirement, already retired, in a long term care situation, or a caregiver, the time is now to take steps to protect your assets and ensure your own comfort as you enter into a new stage of life. Proper financial planning will help bring clarity to your retirement goals and will identify issues, problems, and solutions that come in planning for long term care.
Points to Remember
1.) Recognize that long term care is more of a probability than a possibility.
2.) Start exploring your options early, and evaluate the differences between at home care with a family caregiver and institutional long term care.
3.) Understand that being a caregiver has financial implications, and before you ask a family member to be a caregiver make sure they understand the demands of long term care.
4.) Understand that family caregivers have physical and emotional burdens when providing long term care.
5.) Start planning for long term care now, and seek out financial planning experts.
© Mussett Wealth Management, LLC