Yes, you might want to think about getting long-term care insurance if you don't want to use up your retirement savings and other investments. At the moment, it is thought that the cost of a nursing home is more than $10,000 per month. Imagine how much this would cost you every year if you needed care from a nursing home and had to pay this money out of your own pocket. Without long-term care insurance, this would be terrible for money.
Did you know that before the Deficit Reduction Act of 2005 was passed, Medicaid helped most Americans pay for long-term health care? All of that will change because of the Deficit Reduction Act. With this new law, if you have assets, you will have to pay for most of your long-term health care costs. This new law will hurt middle-class Americans the most, which is a shame.
What does the Deficit Reduction Act mean for me if I have assets and need care in a nursing home? Well, most of the time, you will need to spend all of your money before you can get Medicaid. Under this new law, you can't get Medicaid benefits until you haven't been in jail for five years. This five-year look back period is there to make sure you haven't given any of your assets to family, friends, or other people in that time. If you gave your assets to someone else, Medicaid will count this against you, and you won't be able to get benefits for a certain amount of time. This basically means that you might run out of money and Medicaid won't pay for your care in a nursing home.
The other part of this new law is that you can't have more than $500,000 in home equity, even if you haven't given your assets to anyone. This new law changes how most of your assets, like trusts and annuities, are looked at.
As you plan for retirement, it's important to think about long-term care insurance. Since the Deficit Reduction Act of 2005 was passed, it's a must! Unless you already have a lot of money and don't mind paying more than $10,000 per month for your care in a nursing home. This would be a very hard financial situation for most people.
At what age should I think about getting a plan for long-term care? You might want to think about when you're in your early to mid-50s. You should talk to your insurance agent or financial advisor about this, though.
Planning is important if you want to avoid a financial disaster that could be very bad for you. You want your golden years of retirement to be as free of stress as possible. So make sure you plan for your long-term health care needs!
