This newsletter article provides an overview of long term care. It is the first in a 2 part series concerning a topic that plays an important role in the financial planning process.
Long Term Care — Aging with Dignity
By Nicolas Valdes–Fauli, CFP ®
According to National Clearing House for Long Term Care roughly 70% of all people over the age of 65 will require some form of long term care (LTC) services in their lifetime. Given these odds, it is reasonable to assume that you may need these services in the future and to plan accordingly. However, all too often, people assume that they will not need this type of care and when the need arises their resources for LTC can be very limited.
Without proper planning, the burden of long term care can drain a person´s financial resources as well as the resources of other family members. It can also be very difficult for a care giver to manage an elderly person´s well–being without compromising their own personal life (job/income, family, etc.). In the worst case scenario, you may not be able to have the care you want or need or to live under the conditions you desire.
Let´s begin by looking further at the basic concept of LTC.
What is Long Term Care (LTC)?
LTC is a range of professional or paraprofessional services and/or durable medical equipment/assistive devices that providesboth a network of support and the tools needed to assist you in maximizing your activities of daily living over a long period of time. In its most basic form, LTC includes things like assistance with bathing, dressing, feeding and mobility. Other aspects can include housekeeping, household shopping and meal preparation, administering medications, managing finances and caring for pets. Essentially, long term care allows individuals to access the necessary support to maintain their maximum functional capacity in a variety of settings including their own home, assisted living communities or skilled nursing facilities.
Planning for Long Term Care
There are many factors that need to be considered when planning for long term care. Major considerations include desired living arrangements as well as other personal factors. Aspects to consider include:
- Current age – The cost of obtaining a long term care policy increases with age.
- Family history – How long did your parents and grandparents live? This is typically a good indicator of familial life expectancy.
- Gender – Women live longer than men and are more likely to live alone at home without assistance.
- Current Health – People with a chronic condition are much more likely to develop a long term disability and are more difficult to insure with long term care coverage.
- Financial Resources – What are your savings and other financial obligations?
- Current age – The cost of obtaining a long term care policy increases with age.
- Housing – Can your home accommodate a person with disabilities? Would you prefer to continue living in your home or would you prefer an assisted living environment?
