Retirement Living Guide: Preparing for Senior Care Costs

Bethesda Health | April 26, 2018

Even after living a long life, people need guidance on how to make the most of their retirement years, especially as the challenges become more complex financially, physically, and cognitively. There are many ways to make a plan, and many resources to draw upon as you prepare for senior care costs.

Chandelle Martel, MSW, LCSW, CASWCM, Bethesda Care Manager, highly recommends consulting a Care Manager, such as herself. She has been advising seniors and their families for 26 years. “The cases that go well are the ones where the Care Manager is involved early while the senior has a voice in what they want their lives to look like,” she says.

Knowing the costs

Seniors and their caregivers are vital to this process. It pays to learn as much as possible about the facts of aging. For example: understanding costs.

Costs vary widely by states, but the median cost for assisted living is $3,600 per month, and additional care services mean additional costs. At some point, seniors may require residential care at a significantly higher expense.

When faced with the cost of care and their own concern for their loved one, many caregivers quit their jobs to take responsibility for their seniors. However, it’s important to remember that this costs caregivers in terms of lost wages, benefits, and disruption in a career path. Studies show, on average, lifetime wages lost for women at $325,000, and for men $284,000.

Before you make a drastic decision like this, consult with your senior loved one, and take the first step to an informed decision by scheduling a meeting with a Care Manager. This will help you understand and plan for the considerations for your senior loved one’s unique situation.

Assessing the options

A Care Manager will have an initial meeting with the seniors and involved family members, which typically lasts about an hour. Chandelle makes an assessment of the seniors’ situation and creates a plan for living in retirement. “It’s usually a one-time meeting,” she says.

Sometimes the family lawyer and a financial planner are also present to draw up documents.

Other financial considerations

During your assessment, your Care Manager will also review the senior’s assets and consider Medicaid planning.

Until recently, Medicare did not pay for any aspect of long-term care. Now the Centers for Medicare and Medicaid Services have worked with some Medicare Advantage Plans to offer non-skilled private-duty care, beginning in 2019.

“An additional item to consider: does the senior want to pass some wealth on to their children following their death?” asks Chandelle. “Most of the time, the children want the parents to use if for themselves.”

Trusted attorneys and financial planners can address these financial considerations with seniors and their loved ones to advise the best way to fund long-term care needs.

Additionally, a Care Manager can help answer the following questions:

Should I buy long-term care insurance? A “double-edged sword,” as Chandelle describes it—long-term care insurance is great for seniors who are able to use it. However, if it’s not used thousands of dollars of costly premiums could be lost.

“When it comes to long-term care insurance, I refer seniors to their financial planner or attorney because it is a very complex insurance to understand,” says Chandelle.

Should I sell my life insurance? There are some companies who will purchase the life insurance policies of seniors so that they can stop paying unaffordable premiums. “Some seniors have to make this choice because they are on a fixed income,” says Chandelle. However, like any decision, it is important to consider your unique situation.

Should I explore a reverse mortgage? A reverse mortgage is when someone sells their house back to a bank or a reverse mortgage company. The seller can remain in their home, mortgage-free, and receive a lump sum or monthly check for the home. The drawback: if the senior permanently leaves the home the house is lost. You have to live on the property to stay on the property.

“I don’t recommend reverse mortgages,” says Chandelle. “It has to be a really extreme situation.”

What about Veteran benefits? Chandelle explains that there are two kinds of VA benefits. First, a service-connected benefit compensates Veterans for injuries received during their service.

There is another benefit for Veterans or their spouses with low assets and income who served during wartime. The Veteran can qualify for up to $2,300 per month, and the spouse up to $1,200 per month. Chandelle recommends consulting with a Veterans service officer about this benefit.

How seniors can limit financial losses

Unfortunately, seniors can be targets for scams, and their sometimes good-willed nature can impact their decisions, which can lead to financial losses. Chandelle provides the following tips for seniors to avoid loss:

More information on preparing for senior care costs

The State Health Insurance Assistance Program (SHIP) provides free health benefits counseling for Medicare beneficiaries and their families. It is an independent program funded by Federal agencies and is not affiliated with the insurance industry.

Additionally, the Center for Medicare and Medicaid Services offers a wealth of knowledge for those planning for senior care.

Planning for senior care costs and navigating all of the resources on your own can be stressful for retirees and their families. At Bethesda, we help seniors find solutions and options that make the most of their retirement. Give us a call to learn more about our Care Management program.

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