Addressing the potential threat of extended care expenses may be one of the biggest financial challenges for individuals who are developing a retirement strategy.
The Administration for Community Living estimates that by 2060, 94.7 million Americans will be aged 65 and older. Of those, it’s estimated that someone who just turned 65 has an almost 70% chance of needing some type of extended care.1,2
It is not a single activity. It refers to a variety of medical and non-medical services needed by those who have a chronic illness or disability that is most commonly associated with aging.
Extended care can include everything from assistance with activities of daily living, like providing help with dressing, bathing, using the bathroom, or even driving to the store. Extended care may also include more intensive therapeutic and medical care requiring the services of skilled medical personnel.
It may be provided at home, at a community center, in an assisted living facility, or in a skilled nursing home. It’s also important to recognize that care is not exclusively for the elderly; it is possible to need it at any age.
Extended care costs vary state by state and region by region. The national average for extended care can cost anywhere from $50,000 to $100,000 or more a year. The cost for a home health aide starts at an average of $20 per hour, but can be expected to increase if skilled nursing is involved.3
Individuals who would rather not burden their family and friends have two main choices for covering the cost of extended care: they can choose to self-insure or they can purchase extended-care insurance.
Many self-insure by default, simply because they haven’t made other arrangements. Those who self-insure may depend on personal savings and investments to fund any extended care needs. The other approach is to consider purchasing extended care insurance, which can cover all levels of care, from skilled care to custodial care to in-home assistance.
Several factors will affect the cost and availability of extended-care insurance, including age, health, and the type and amount of insurance purchased. You should consider determining whether you are insurable before implementing a strategy involving extended-care insurance. Any guarantees associated with a policy are dependent on the ability of the issuing company to continue making claim payments.
When it comes to addressing your care needs, many look to select a strategy that may help them protect assets, preserve dignity, and maintain independence. If those concepts are important to you, consider your financial approach for extended care.
For more insights and resources, be sure to sign up for our Weekly Market Commentary. Follow our YouTube channel where we regularly post our Epic Market Minute videos. Follow us on LinkedIn, or like us on Facebook. And as always, please don’t hesitate to reach out to a dedicated service professional at Epic Capital.
Recently, you may have seen reports that a record-low number of homes are available for sale—roughly 1.03 million nationwide. If you compare that to the average number of homes for sale during the past 10 years, it’s no surprise that many hopeful homebuyers are having issues securing a home. But why exactly is the housing … Continue reading “Forces Driving the Housing Market”
It can be exhausting trying to keep up with the whims of Wall Street. Lately, the financial markets have been fixated on federal taxes and what may be proposed on Capitol Hill in the weeks and months ahead. Wall Street’s focus on taxes closely follows its attention on the 10-year Treasury yield. And it wasn’t … Continue reading “The Whims of Wall Street”
President Joe Biden introduced the much-anticipated American Jobs Plan, which outlines an approach to spend roughly $2.2 trillion on the nation’s infrastructure and other projects. As part of the legislative process, the Biden administration also laid out a proposal for paying for the domestic investment. The plan includes raising the corporate tax rate to 28% … Continue reading “Paying for the Infrastructure Bill”
Financially, many of us associate the spring with taxes – but we should also associate December with important IRA deadlines. This year, like 2020, will see a few changes and distinctions. December 31, 2021, is the deadline to take your Required Minimum Distribution (RMD) from certain individual retirement accounts.
There’s an old Wall Street maxim that says, “markets climb a wall of worry.” And these days, there’s plenty to worry about with the trend in long-term interest rates and bonds.
Epic Capital provides the following comprehensive financial planning and investment management services: Learn More >