Health Care…. Its Impact Is Far Reaching

In a practice that focuses entirely on issues of Elder Law and Estate and Retirement Planning, I am continually asked by my clients, what they can do to mitigate the rising costs of their health care.

The cost of their health care is creating such an unexpected hardship on unprepared retiring baby boomers, and those who have been retired for years, make it imperative to review your planning and the alternatives that might still be available. The high cost of long-term health care will drag down the quality of life for nearly two-thirds of today’s retirees. It can cost $100,000 or more a year for nursing home care and nearly $6,000 a month for in-home care, expenses that many people are ill-prepared to absorb. A new analysis shows when the cost of health care and long-term care is included, 70 percent of retirees likely will be unable to maintain the lifestyle they had before retirement.

The volatility, over many years, in the stock market has severely damaged retirement savings for millions of people and has focused attention on how poorly prepared we are for retirement expenses. They include inadequate personal savings, a Social Security system that will likely fail to provide current levels of support, and rapidly rising health care costs.

The harsh reality is that spending too much, borrowing excessively and saving too little, have left a generation unprepared for retirement. We are now looking at a future, where we have to see restraint from consumption to derive savings.

Options for paying for this care include relying on Medicaid, buying long-term care insurance, selling the family home when long-term care is needed or tapping into the value of the home through a reverse mortgage. Current estimates indicate that one third of people aged 65 or over today, will need to enter a nursing home for at least three months. Some will need to stay for a prolonged period of time.

Preparedness, restraint of spending, and taking an active interest in what our Congress is doing, may be the only way that some of these problems can be handled properly. Professional guidance can make a difference in how we face the problems and make the necessary changes.

Be Educated! Be Proactive!