No one wants to think about a time in their life when they could lose their independence. However, when you or a loved one has dementia, anticipating and planning for long-term care needs will help you save money and stress in the future. As with many things in life, it's better to be safe than sorry. Plus, having a plan in place will give you immediate peace of mind that you or your loved one will always be well cared for. Here are some practical tips to get you started.
Assessing Your Risk of Requiring Long-Term Care
Is There Illness in Your Family? Knowing your family history of disease can reveal which illnesses you should be prepared for and what preventative measures you can take now. If you have close relatives with diabetes, heart disease, high blood pressure, osteoporosis, or cancer, your chances of winding up with these issues may be higher than normal. Everyday Health recommends obtaining your family medical history by talking to family members, looking at family documents, and reviewing death certificates. If these diseases run in the family, they can cooccur with cognitive decline, making independent living even more of a challenge.
What Does Your Lifestyle Look Like? The lifestyle choices you make right now will affect your health as you age. One study even found that lifestyle has a greater effect on life expectancy than genetics. For example, people who don’t smoke, keep their cholesterol low, and maintain their fitness in their 50s are more likely to see their 90th birthday. When you move into an assisted living facility, your dementia care experts can help you maintain positive habits that will increase quality of life.
Your Options for Funding Long-Term Care
Long-Term Care Insurance. Traditional long-term care insurance can give you the customizability to choose your amount of coverage and how long it lasts. However, you will never see this money if you don’t end up needing care. On the other hand, many insurance companies offer hybrid life insurance and long-term care policies. This type of policy will help you pay for your long-term care if you need it and will pay out a death benefit to your beneficiary if you don’t. (LTC insurance is something you need to get years before you need it. I did, but now the cost of it has increased so much that I had to decrease its benefits to be able to keep it. Do check out the company's options for things like rate increases.)
Medicare. Medicare helps pay for medical costs for people 65 and over, but it does not cover the majority of custodial long-term care expenses. Many people choose to supplement this coverage with a Medicare Advantage plan. Plans vary state to state, but MA plans generally cover extra expenses like vision, dental, and prescriptions. (While coverage of these extra expenses is very helpful, MA plans usually still do not cover custodial long-term care.)
Your Home’s Equity. A reverse mortgage can help seniors pay for long-term care expenses by using their home’s equity. You can either receive a lump sum of cash immediately or receive monthly payments throughout retirement. Importantly, you still have the right to remain in your house even if you exhaust all of the equity in your home. Most often, the lender recoups their money by selling the property after the last spouse passes away or moves. Keep in mind, a reverse mortgage means that your estate will decrease over time, so you’ll want to think carefully before jumping into this decision. (Also be sure to check out all the ramification and use a reputable company for your reverse mortgage. (While this can be a welcome answer to a difficult problem, there have been issues when an uninformed home owner was encouraged to obtain a less than attractive reverse mortgage. Consider getting a second opinion before making the final decision. You need to know exactly what you are getting into.)
Another way to pay for long-term care is to sell your home outright and downsize into a smaller space. This can be a viable option, but if you’re considering it, it’s a good idea to get an estimate on your home’s value.
Health Savings Account. A Health Savings Account (HSA) is a good option for people who are covered by a high-deductible health plan. You can make tax-free withdrawals at any time when you use the money to cover medical expenses. You can also use the money for non-medical expenses but you will have to pay income tax on it.
Talking about your plans for long-term care may be an uncomfortable conversation to have with your loved ones, but it's an extremely important one. As many as 52 percent of people will need long-term care at some point in their future. Instead of worrying about what the future holds, be well-prepared so you can you can focus on your health right now! (Hazel is so right! Uncomfortable or not, talking about long-term care and planning for it is super important. Also if you and your loved one talk about this early on, while they can feel as though they have a role in the planning, it will go easier when the time comes to put it into effect--even if they don't remember the conversation.)
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Helen and James Whitworth are not doctors, lawyers or social workers. As informed caregivers, they share the information here for educational purposes only. It should never be used instead of a professional's advice.