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3 Secrets to Protect Your Savings from Care Costs

When I sit across the table from a new client, discussing their life, their needs and goals, the question I often ask them is “What will get in the way of your dreams and goals?” They have worked hard, raised kids and they are getting close to retiring. They are looking forward to travelling and enjoying their retirement, and why shouldn’t they?

Long Term Care Costs

Unfortunately, the biggest challenge that can get in the way for seniors and retirees, the need for long term care. A client recently showed me the bill they received from a nursing home. On the bill, is an amount of $10,000 still owing from the previous month, as well as the current months’ bill – both amounts totalling $23,000. Not included in this figure, is the cost of medication and various other items required to provide the care needed. The total bill is $27,700 for what works out to be 60 days of care.

Another $17,000 to Pay

Imagine receiving a bill for this amount, knowing you will get another bill next month for $17,000, and again the following month. Most of us feel anxious about getting a bill for $500 in car payments or repairs, never mind $17,000 every month, which I appreciate must be very stressful. Most of us don’t have that amount of money available in a checking account and may have to pay from an IRA account. That $17,000 is actually costing $22,000 because of the income tax owed on pulling that amount of money on an IRA account.

How long will it be until you go broke from paying the nursing home every month for your spouse’s care? Only once you are broke, can you apply for Medicaid benefits to pay for the care. Unfortunately this is what happens to families who don’t plan ahead for skilled nursing home costs.

Plan Ahead

This is why we, at Sechler Law Firm, implore you to seriously consider planning ahead for possible long term care costs. Currently, statistics show that 1 in 3 people will develop dementia, and two- thirds of people will need some form of long term care. At a cost of $180,000 per year, how will you pay for this? How would your spouse be able to maintain an appropriate retirement lifestyle when they get a bill for $17,000 every month?

There are 3 things you need to think about, which we cover in great detail at our workshops. 

1. Utilize Government Benefits 

Unfortunately, many seniors believe if they they are over age 65, they have Medicare coverage. However, Medicare does not pay for care in a skilled nursing facility, unless it is a temporary stay for rehabilitation. If you are a veteran, you might be eligible for veteran’s benefits, but you should seriously consider looking at Medicaid long term care benefits. Bear in mind that if you don’t plan ahead, the Medicaid rule book requires you to go broke before you become eligible to receive benefits to pay for long term care.

2. A Trust  Is Your Friend

There was a time when trusts were only used by the rich and famous, but that is no longer the case. Middle- and upper-class Americans use trusts to protect assets from long term care expenses.

3. It Is Not Too Late

If you have a loved one in a skilled nursing facility, and you’re getting a bill for $17,000 every month, you need to take action. People tend to freeze in this situation, because they are confused and overwhelmed. Reach out because this is a situation where we can help. It is not uncommon for us to protect 80% of a family’s assets, even after somebody has gone to the nursing home.

Contact us today for a FREE Consultation

Please call us today at 724-546-4227. If you would like to come to one of our workshops in Cranberry Township or New Castle, please register for the workshop on our website, as they book up quickly. Visit sechlerlawfirm.com/workshops.

 

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