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      senior woman and healthcare worker

      It’s difficult to plan a smart funding solution if you don’t know the cost of something. The lack of understanding of actual long term care costs is one of the major reasons many people don’t make long term care planning a priority. Since virtually all long term care historically was provided by unpaid family members, many families haven’t experienced the financial pressure of paying for professional care.

      In order to plan for the cost of long term care, it’s important to know what type of care is being provided:

      ·     Is it occasional home care, perhaps provided by an unlicensed neighbor?

      ·     Is it round-the-clock home care by a licensed professional under the supervision of an agency?

      ·     Or is the care to be provided in an Assisted Living facility or a Nursing Home?

      ·     If in a facility, is it a private room or unit, and does the cost of care vary depending on the type of care needed?

      This brings up another difficulty. Often we don’t know when care will be needed in the future – perhaps decades from the time we are sitting down to plan. With inflation, the cost of care can double roughly every 18 years or so. So it’s easy to see how a client’s financial plan or estate plan could dwindle significantly if care was needed when elderly.

      Additionally, the cost of care varies dramatically by state, and it can vary significantly by region or city within a state. Massachusetts will be a more expensive care state compared to Florida, for example.

      According to the 2020 Cost of Care Survey conducted by Genworth Financial, the average cost of various types of care last year were significantly higher in Boston than nationally. Here’s a comparison with Orlando, Florida:

      • Home Care – $5,720/month in Boston and $3,813/month in Orlando
      •  Assisted Living – $6,100/month in Boston and $3,700/month in Orlando
      • Private Nursing Home room – $14,509/month in Boston, but $9703/month in Orlando

      With longevity increasing, it’s not hard to imagine that these figures could double, perhaps twice, by the time baby boomers require care.

       When planning for long term care, it’s important to keep in mind the following variables:

      ·     The cost of care varies not only by location but also by the type of care desired;

      ·     The duration of the care need is an unknown;

      ·     Uncertainty of whether care will be needed decades down the road or much sooner;

      ·     What client resources and liquidity are available when care may be needed.

      A Long Term Care Specialist can be your best ally in this complex area of planning.