Wisdom Wednesday: Aging Wisdom's Podcast
Wisdom Wednesday: Aging Wisdom's Podcast
Proactive Planning: Financial Planning (4/11)
Financial planning. Whether it's for yourself or for your parents, having an understanding of assets in the context of when you're retired is essential. You'll need money for your basic needs, money to maintain the lifestyle that you want to live, money to still travel if that's a priority, and for charitable giving, if that's a priority. You will also need money to cover medical expenses and eventually for long-term care. So the care that we'll be talking about today, that money that you have saved needs to be able to cover these expenses as well.
Once you understand your assets or your parents' assets, the next piece is how much will it cost? Educating yourself on what options are available down the road if you or someone you care about needs help, and what will that cost (that’s what we’ll cover next week)? Because without that understanding, it's hard for you to plan. Examples include in-home care, community and assisted living, skilled nursing or nursing home care.
We refer our clients to the Genworth Cost of Care Survey to get a baseline of costs. You can access the Survey here.
Who pays for long-term care expenses? Most people think that Medicare will cover assistance, caregivers, and retirement communities. And I'm the bearer of bad news, but I'm here to let you know that Medicare does not cover the expenses that I'll be talking about. I think the easiest way to try to remember is to think of because Medicare is really a health insurance. Medicare really mimics and follows that. It pays for your healthcare needs only. It doesn't pay for your long-term care needs. There are a few exceptions for that (we cover that later). But in general, the care that you may need someday is a private pay, out of pocket expense.
One exception to that is if you have long-term care insurance. Long-term care insurance pays for the care referenced earlier, and that we'll review about next week. Another homework assignment: if you have long-term care insurance, review your policy with your financial advisor to remind yourself what is covered by your policy. It usually has a daily amount and then that daily amount kind of equals a monthly amount and then you've usually selected several years of coverage.
If you're helping your parents, you'll also want to find out if they have long term care insurance and what does that policy look like? Just having that knowledge will bring a lot of peace of mind if and when you need assistance.
Time to begin planning and better understanding the options? We have the knowledge and expertise to help guide your journey. Click here to schedule a free, get-acquainted call with one of our Certified Care Managers.
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