Extension Connection

Extension Connection

Who Will Pay for Your Long-Term Care?

Photo of Kathy Sweedler

Kathy Sweedler
Extension Educator, Consumer Economics

Saving and planning for retirement is always a challenge. With the stock market doing poorly lately, many of us have wondered what this means for our retirement plans. While we wait to see what the stock market does in the long-run, we can take time now to evaluate our plans. An important piece of the retirement plan puzzle is taking care of our future long-term care needs.

You may be saying to yourself, "Plan for my needs?" "It's all I can do to manage work and my family life including helping my aging parents with their long-term care needs!" And, you're not alone. Family members provide the vast majority of the long-term care received by older persons. And the time adds up. Working caregivers spend an average of 22 hours per week providing elder care. Even with all these other demands, it's worth planning ahead for your needs, especially if you're 45 to 65 years old.

Long-term care involves much more than nursing homes today. Too often I hear people say, "I'm not doing a nursing home so there's nothing to plan for." Over 80% of people receiving long-term care services are in their own homes, an apartment or independent senior housing. So, who do you want to provide these services and how do you plan to pay for them?

Long-term care services are not cheap. Some people have assistance in their homes. In Illinois (outside of Chicago), the average cost for a certified home health aide that can provide skilled care is $37.46 per hour. Over time this can cost more than living in a long-term care facility. A one-bedroom unit in an assisted living facility's average cost is $32,355 a year. And, a nursing home with double-occupancy costs an average of $43,632 annually.

Typically people pay for these costs through a variety of means including family help, government support from Medicaid (Medicare is not designed to pay for long-term care), private long-term care insurance, and their personal savings. What are your goals? Is it important to you to be financially independent? Or, are you willing to receive help from family and/or the government? Do you want to leave an inheritance to your children? Understanding your goals will help you plan how you will pay for long-term care needs in the future.

Take time to talk to extended family members about your goals. Before there is a crisis, it is important that everyone involved understand your plans: where you want to live and how you want to pay for care.

To learn about the pros and cons of different financing options, attend "Long-Term Care: Talking, Deciding, Taking Action," a one-day workshop on November 12, 2008 in Arthur, IL. Additional topics to be covered include housing options in later life, communicating with family, and taking care of the caregiver. Registration is required; the participation fee of $10 includes lunch and workshop materials. Call the Moultrie-Douglas Extension Unit at (217) 543-3755 to register. Continuing Educations Units are offered at an additional cost.

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