Because you just might live to be 103, will your money last that long?

As medical advances help people live longer, the likelihood that assistance will be needed to perform common activities of daily living increases.

Depending on the type and level of care needed, retirees may need to hire outside assistance. These out-of-pocket costs, extended over months or years, can erode the value of a sound retirement portfolio, depleting assets earmarked for other purposes.

Dealing with long-term care needs can be an emotionally and financially significant life event for you and your family. But, having a plan for your long-term care needs, or those of a loved one, may help to ease some of the stress.

What is Long-Term Care?

Quite simply, long-term care refers to a broad range of medical services and assistance provided over a long period of time. It goes beyond traditional medical and nursing care, which is not usually covered by health insurance and Medicare.

A person of any age may need long-term care services due to a chronic illness, physical disability or a cognitive impairment such as Alzheimer's disease—conditions for which there is little chance or no hope to live independently without some level of assistance.

For many, the mention of long-term care brings to mind images of a nursing home. In actuality, it covers a broad range of services administered in a variety of settings. Long-term care settings include: your home, assisted-care facilities, nursing homes, adult day care centers.

Statistics

The fact is, an estimated 42% of those who reach 70 will need some form of long-term care, says the Federal Agency for Health Care Policy and Research.1

The cost of care is expensive and rising. You should consider the following:

• $18.58 average hourly rate for home health aid
• $16.82 average hourly rate for homemaker services
• $42,400 to $200,000 estimated annual costs for nursing home care.

Not everyone will qualify for government-sponsored program assistance, so you will likely be paying out-of-pocket for long-term care insurance.

When Is Long-Term Care Needed?

Determination of a need for long-term care is usually based on a person's cognitive abilities and/or a decreased ability to perform a specific number of what are called activities of daily living, such as: dressing, bathing, eating, toileting, continence, and transferring (getting in and out of bed, the bathtub, chairs, etc.). When it becomes too difficult to perform two or more of these functions on your own, long-term care insurance can help pay for the assistance needed.

Grage Financial can help you determine your long term planning goals, call today for a free no obligation consultation.