Why planning for long-term care is so vital

Your retirement plans likely already address how much investment risk you can afford and whether your accounts will cover you for your remaining years. But consider another vital factor: How much health care coverage will you need beyond what Medicare provides?

Needing health care as you age in unavoidable; many expect that Medicare will cover it. But what happens when your long-term health care needs are not covered by Medicare?

This what-if scenario happens too often to ignore. In fact, 70% of people over 65 years old will need some type of long-term care as they age, at an average length of three years. This could potentially cost you over $1 million, a huge financial toll that could ruin your retirement strategy if you’re not prepared.

Long-term care is needed so often. Yet, it’s so often overlooked.

If you’re still healthy and mobile, it can be difficult to imagine yourself needing care and help. But statistics clearly show that most of us will need care at some point in our lives.

Let’s look first at activities of daily living, or ADLs. The most common ADLs that older adults have difficulty with are dressing, bathing, incontinence, eating, toileting, and transferring in and out of a chair or bed.

Most types of health-care coverage require you to be struggling with two ADLs to qualify for long-term care benefits – and those benefits may only last 100 days.

Now, consider what happens if you don’t have any ADL issues, but you’re struggling to drive to the grocery store or cook a full meal? Called incidental activities for daily living, or IADLs, these do not qualify for long-term care benefits. So if you don’t have someone helping you with your IADLs, your long-term care must be paid fully out of pocket from day one.

You’ve worked all of your adult life to ensure you can live the remainder of your years on your terms. Don’t sacrifice your efforts by ignoring your long-term care needs. Make sure long-term care considerations are part of your retirement plans.