Why Planning is Critical to Mitigating the Rising Costs of Long-Term Care
Seventy percent of Americans who reach age 65 will need long-term care at some point – but few are prepared to pay for it, according to a new report by the SCAN Foundation on the State of Long-Term Care Financing. The report also finds that families bear a huge part of the burden, providing $450 billion in unpaid caregiving and $63 billion in out of pocket costs.
"It's not easy to think about these issues, but planning is critical to assure you get the care you might need," advises Pat Foley, President of Insurance Distribution and Marketing at Genworth, a multiple solutions provider that offers a variety of options to meet the challenge of caregiving in the 21st century "The key is to plan early and take the financial steps today to assure you have funds for long term care when you need them."
As medical science advances and Americans live longer, Foley says 10,000 baby boomers will turn 65 every single day over the next two decades. As Americans continue to live longer millions will receive or provide long term care at some point in their lives. Genworth will be part of the solution to this challenge.
Many people assume that they will be able to rely on government support or their immediate family to provide or pay for their care in the future, according to Foley. At the same time, people are generally more afraid of burdening their family than dying, according to a 2010 Harris Interactive survey conducted by Age Wave.
"The best recommendation I can make is to have a written plan and share it with your family," Foley says. While planning might seem like a daunting task, Foley says it comes down to three key considerations: "how they want to receive care, where they want to receive care and who they want to provide the care."
Understanding the changing cost of care is also important, according to Foley. "A good place to start is to evaluate the cost of care where you intend to live," Foley says, adding that Genworth has been conducting an annual cost of care survey for 10 years to help provide consumers with this information. Genworth now offers this information to consumers through a free mobile app for iPhone® and iPad® from iTunes.
Long-term care planning also overlaps with retirement planning. According to Genworth's 2013 Cost of Care survey, the cost of care is increasing, with the annual median rate for a private room in a nursing home of $83,950. "Long-term care insurance helps to transfer some of the risk of depleting a well-thought-out retirement plan from an unplanned long-term care need," Foley noted.
As with any other savings or investment strategy, it's never too early to get started, according to Foley. "The age people purchase long-term care insurance has dropped significantly over the past 20 years. The earlier you purchase long term care insurance, the lower the costs will be in most instances."
Fortunately, long-term care offerings are evolving in order to meet the rapidly growing need. Genworth, who pioneered the first long term care insurance product in the mid-1970s, now emphasizes a "new, more individualized approach" which, Foley says, "allows the consumer to dial up or dial down features to meet their want, needs and range of budget."
"Life today is all about options from where we want to work, to the type of car we drive, right down to the coffee we drink in the morning," said Foley, while discussing the variety of long-term care options which are now available to consumers.
Genworth's customer-centric approach is one that has been molded from years of knowledge, but refined via human experience.
"For us, data is human-it reminds us that the work we're doing each day makes a difference," Foley explained. "Our people are passionate about helping families manage some of life's most daunting challenges. They draw on their work and personal experience so they are there at the moment of truth: when our policyholders need them the most – at time of claim."
From insurance and public programs, private family support, self funding or even a combination of these, there are many options to consider as part of your retirement strategy.
Knowledge is power, so take advantage of the many tools available to help you make an informed decision and complete your written plan.
For more information on long term care planning go to:
- Let's Talk
- Genworth Annual Cost of Care Survey
- Hindsight is Foresight
- Overview of Current Long-Term Care Financing Options
- The State of Long-Term Care Financing Infographic
This sponsor-generated content was written by a freelance writer in conjunction with Genworth and did not involve the Kiplinger editorial staff.