Written exclusively for our Putnam Ridge readers, by our good friend, Karen Weeks of Elderlwellness.net!
Whether you plan to stay at home or settle into assisted living, your long-term care needs aren’t something you should just manage as they arise. Keep reading for a few things to consider when it comes to planning and paying for living expenses beyond retirement.
Accessing Your Potential Needs
Your long-term needs will be largely affected by how you take care of yourself now. For instance, if you make bad choices, such as smoking cigarettes, you put yourself at a greater risk of aneurysm, cancer, respiratory disorders, and heart disease, according to Confirm Biosciences. Likewise, if you have a family history of dementia or Parkinson’s disease, you must consider the possibility that you will suffer from physical and cognitive decline, despite living a healthy lifestyle.
Other factors that can affect your ability to care for yourself include accidents and injuries that impact your mobility and the layout of your current home. If you plan to age in place, you’ll need to look for ways to improve the livability of your property. Simple home modifications can have a big impact. Increased lighting and a wheelchair ramp are excellent examples. These inexpensive upgrades will improve your quality of life while reducing the possibility of injuries.
There are numerous types of care available for seniors should you decide to live out your golden years at home. HomeAdvisor lists home health aides, adult daycare, and personal caregivers as viable resources if you’re overall healthy enough to remain at least partially independent. Planning to relocate to a 55-plus or assisted living community is also an option that can reduce your risks while you continue to live a healthy and active lifestyle.
Where’s the Money Coming From?
No matter what living situation you choose – or that life necessitates – you’ll need money to cover your expenses. How you pay for your care is dependent upon a number of factors, including how much cash you have available and whether you have insurance to provide for medical expenses and senior housing.
Your 401(k), IRA, independent savings, and other investment accounts will likely be your first source of income in retirement. However, there are other options, including cashing in on whole life policies and long-term care insurance. The US Administration on Aging further explains that a reverse mortgage, annuities, and trusts may also be considered if you will pay privately. The reverse mortgage option is perhaps the most confusing. It is essentially the process of utilizing a portion of your home equity to cover living expenses or supplement your income. It is not selling your home, and the money must be repaid upon your death or if you permanently relocate.
Living expenses continue to rise, even for those who plan to stay at home. The AARP offers this long-term care calculator that can give you an estimate of how much you’ll need to comfortably fund your post-career years. In addition to planning for these costs, you must also consider your future plans, such as whether you intend to travel or wish to assist in paying for your grandchildren’s college education.
If you plan to retire at age 63, which, according to The Motley Fool, is the average retirement age for Americans, you should plan for at least 30 years of living expenses. At $5,000 per month, this equates to approximately $1,060,751, but your financial needs could be significantly more if you suffer with medical conditions or are involved in an accident that inhibits your ability to provide self-care.
No matter your age, take the time to assess your potential medical, housing, and other needs and figure out a financial plan for the future. Doing so will help you enjoy your life today and reduce the burden on yourself and your family down the road.