Honestly assess the current state of your finances
When planning for long term care, the first thing you need to do is take a complete, honest look at the current state of your assets. If you have not yet retired, how much do you make per month or year, minus your monthly expenses? Do you have any additional assets, like a car or home you have completely paid off? What is the current value of any investments or stocks you may have? Add all of these numbers up to get a picture of your assets as they stand right now.
Next, do the same with your costs. This list may include payments on your house or car, any outstanding credit card debt or personal loans, and your monthly expenses like utilities. Subtract your total liabilities from your total assets to find your total net worth. This will be an important number to help you find out how much you will be able to save each month. It’s critical to know this, because the average cost of long term care per year is around $85,000, or just over $7,000 per month. If you do not currently have a residual income of $7,000 per month, you may need to change your current habits or look into other options.
Health, habits, and the likelihood you will require long term care
Changing your habits in general is a good decision. Hopefully, you will never have to have long term care at all. To diminish the risk you will require it, start focusing on making your lifestyle more health-centered. Start exercising and eating regular healthy meals. People who live a wellness-centered lifestyle are less likely to get sick in general, which can drastically decrease the chances you will require long term care. You can also help yourself by staying away from activities that may cause you significant injury. For instance, if you have weak hips or ankles, running may not be the best type of cardio for you. Finally, there are a number of hereditary diseases that cannot be prevented that may lead to long term care - do an audit of your family history to find out if you may be impacted by one of these, as well as to learn what modifications you may need to make to your home to increase the chances you will be able to age in place.
Prepare for the cost
Whether or not you think you will require long term care, it is good to be prepared. Calculate how close you are to retirement and how much time you will have to save. Keep in mind that Medicare does not pay for the majority of long term care, and Medicaid will only cover you if you meet their long list of conditions. Medicare can be useful, though, if you have to pay for general healthcare or prescriptions. Stay up to date on your plan to be aware if anything changes; if your plan does change, check before the deadline for the Annual Enrollment Period (October 15 - December 7) so that you can make any changes you need. In the event you still need assistance, long term care insurance may be able to help.
Long term care is expensive, but you can offset the cost by saving for years before you need it, and by living a healthier life to diminish the chances you will require it at all.
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June is a caregiver herself to her 85-year old mom. She's passionate about helping her fellow caregivers, which inspired her to write her upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.