How to Plan for Long-termHealthcare Costs

With increasing healthcare costs, itcan be difficult to plan for the

future. Senior couples are more andmore often finding themselves unableto financially cope with retirement

despite extensive planning. The risingcosts are impossible to predict. Illnessitself can range nearly anywhere incost, lasting for an undisclosed amountof time that is bound to make a dentin the bank account. With theseunknown variables, it only makes

sense that elderly couples are findingthemselves underprepared,

overwhelmed, and intimidated by anunknown future.

That’s why it’s so important, even if difficult, to try and plan for such health-careuncertainties. Although absolutely easier said than done, there are a few different forms

of insurance coverage that middle-age couples can begin to implement in order todiminish the rising healthcare costs of contemporary society. With the average cost ofhealthcare for a 65-year old healthy couple retiring this year hovering at an astounding

$394,954, it is time to take action:

Long-term Care

Intended to cover anestablished period oftime, long-term care

insuranceencompasses health-

care-related expenseslike at-home care orassisted living, two

aspects of healthcarethat are all-too-ofteneither very limited in

coverage orcompletely absent

from plans to beginwith.

Michael Resnick, a ChiefFinancial Planner at GCG

Financial, speaks up, “I have aclient whose husband did

almost everything right inplanning for retirement.

The one thing he missed inhis retirement planning was

long-term care insurance,and now he has dementia

and his wife was forced toput him into a facility. Nowthe wife is concerned that

she may not be able toafford to stay in her home.”

This anecdote is a commontragedy; and sadly enough,

there really is no simple answer.While, yes, long-term care

insurance could have workedhere, that does not

acknowledge the fact that thecosts are high, and the

different plans are difficult toimplement and use to your

advantage. Not to mention,there is no guarantee that

premiums won’t rise, and thatwould only further strain thefiscal situation. So, while yes,

LTCI is worth keeping in mind, itis not necessarily always the

right choice.

Medicaid Planning

While many have the ‘luxury’ to rely on Medicaid to cover LTCIexpenses, there is a central issue. You can only qualify for

Medicaid if all of your other assets have been depleted, used up,are gone. This means that you have literally nothing to leave forbeneficiaries, and are entirely unable to supplement your care.

However, there is a way around this. Set up a “Medicaid-proof Trust,” which is essentially an irrevocable trust that

passes along its contents to your heirs when you passaway. A trustee needs to be established, and then they cansupplement care with those assets in the trust. That said,

there is no guarantee that the trustee will do so, since theydon’t have to do so. In light of such, make sure you knowthe trustee will be more than willing to supplement your

care when the time comes.

Self-insuredPaying expenses out of pocket is an option,

albeit an expensive one. Generally reservedfor high-net-worth individuals, it tends to

mean that people will spend the money theysaved earlier in life when they were younger

in order to enjoy retirement to a greaterdegree. However, again, this option can bevery pricey and will often mean that there

will be less left behind for heirs.

Just as well, should you opt to self-insure, you need to be aware that therecould possibly be extreme tax implications (and penalties) if you decide to

liquidate stocks, bonds, or anything of the sort.

When considering your fiscal future, it pays to think now rather than later. Assess youroptions. Speak to a professional—and make the decision that makes the most sense for you.