Is 80 the new young? If the pace of increase in life expectancy in America over the past two centuries continues through the 21st century, most babies born since 2000 will celebrate their 100th birthdays, according to an article published in the medical journal the Lancet. And people aren’t just living longer. These additional years of life are now being realized later in life.
At the beginning of the 20th century, most of the additional years of life were realized in youth and working ages (so that the proportion of babies surviving to adulthood increased), and less than 20 percent was realized after age 65. Now, more than 75 percent of the gains in life expectancy are realized after 65, according to an article published in the Journal of Economic Perspectives.
The impact of this demographic transition is a startling rise in the demand for health services — at the same time the cost of medical care is increasing. What does this mean for you and your aging loved ones? It’s time to plan for your long-term care needs. Here are some tips on how you can get started.
Get a Realistic Picture of the Costs
According to the 2017 Genworth Cost of Care Survey, the average national monthly cost for long-term care ranged from $1,517 for adult day health care to $8,121 for a private room at a nursing home. However, when reviewing senior living costs, it’s important to understand costs are based on a number of factors, including where your loved one lives, the level of care they will require, the size of the room and range of amenities the community offers.
Long-term care costs can have a huge impact on your finances. To get a realistic picture of the costs for different types of services by state and metropolitan region, Genworth offers a long-term care calculator.
Keep in mind, costs are rising. By 2047, Genworth predicts the average national monthly cost for long-term care will increase to $3,682 for adult day health care and $19,712 for a private room at a nursing home. Address the potential long-term care needs in your financial plans.
Learn the Truth About Financing
If you think Medicare will cover the cost of assisted living, think again. Medicare won't pay for assisted living beyond short-term rehabilitation. To pay for long-term care, most families will use a combination of self-funding, government assistance and long-term care insurance. So it’s a good idea to research various ways to pay for long-term care.
For example, veterans and veterans’ survivors who are eligible for a Veterans Affairs pension and who require the aid and attendance of another person or are housebound may be eligible for additional $2,000 per month in veteran’s aid. Or if your parents have been paying premiums on a life insurance policy for a decade or longer, they can withdraw what was paid in premiums for financial support now. Other methods of paying for long-term care privately include reverse mortgages, annuities and trusts.
Although the cost of senior living is rising, you can make a plan to finance it and defray the cost.
Talking to Your Parents About Alternative Living Arrangements
Experts recommend having family discussions about long-term care long before a crisis occurs. Starting a conversation about aging with your parents can be tough, but it doesn’t have to be. When you approach “The Talk” as an open dialogue, the conversation can be productive and positive.
The next time you’re at home, consider asking your parents if there might be a good time to discuss what plans they have made for the future and how you might be able to help them in making sure everything is taken care of. This might be the first time your parent has considered this discussion, so don’t worry if you’re met with resistance. Keep a mental list of the apprehensions your loved one has, validate their concerns and move forward by focusing on their goals for the future. Understanding the type of lifestyle they wish to maintain can help with planning and lead to positive outcomes.
And remember, there’s no such thing as “The Talk.” It is better to have three 30-minute talks than one 90-minute conversation. Stress that you don’t need to take over but that you’re available to help lighten their load and are interested in getting all the information you need to support their quality of life, health and safety.
If you would like advice about talking to your parents about long-term care, check out our new eBook.