According to LongTermCare.gov, nearly 70% of those age 65 and over will require long-term care at some point in their lives. This includes care at home (paid and unpaid) as well as at nursing and assisted living facilities.1 On average, a person who requires this care will receive 2 years of it at home, and 1 year of it at a facility.
Because this kind of care is expensive—especially for more intensive care around-the-clock—and it is not covered by Medicare, it can pose a significant risk to retirement savings.
You can purchase long-term care insurance to shield yourself against this risk. But the premiums for this type of coverage are not cheap.
Angelica Leichyt, senior editor for CBS's Moneywatch: Managing Your Money, weighs the pros and cons of purchasing this kind of insurance.2
First, some of the advantages:
And now some of the drawbacks:
Nearly a third of people will not require long-term care at all. And others may need it for only a short period of time. However, if you need this kind of care for several years, and don't have long-term coverage, you could see your savings quickly dwindle.
When it comes to making a decision about this kind of coverage, Leicht urges people to first inform themselves and then do a comprehensive analysis of the pros and cons for their specific situation.
1. http://go.pardot.com/e/91522/ds-how-much-care-will-you-need/95227m/2316240219/h/SeHdiFU69YFG-7c81yTWX4bFBH0S6A8PMV_QulS6hXU
2. http://go.pardot.com/e/91522/g-term-care-insurance-in-2024-/95227q/2316240219/h/SeHdiFU69YFG-7c81yTWX4bFBH0S6A8PMV_QulS6hXU
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