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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 facility care varies dramatically by state, and it can vary significantly by region within a state. Boston, for instance, will have much higher costs compared to towns in the western part of the state.

According to the 2018 Cost of Care Survey conducted by Genworth Financial, the average costs of various types of care last year were significantly higher in Boston than nationally:

·     Private Nursing Home room – $8,000/month nationally, but over $13,000/month in Boston

·     Assisted Living – $4,000/month nationally and almost $6,000/month in Boston

·     Home Care – $4,100/month nationally and over $5,000/month in Boston

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 the best ally for you and your clients in this complex area of planning.