The human condition is not static, and everyone understands this within certain limits that are easy to embrace. For example, you know that you are going to have new responsibilities when you transition out of childhood into adolescence and young adulthood. That being said, once you are settled into a particular identity as a self-supporting grown-up, you can fall into the sense that things will be more or less the same going forward. Yes, you are invariably going to have career goals and other objectives, but it can be hard to wrap your head around the possibility of physical and mental decline and plan for aging.
It is not hard to empathize with this feeling, but at the same time, everyone has seen the impact of aging on loved ones, colleagues, acquaintances, and people that you see on the street. It can be difficult to put yourself in their position, but these people probably felt the same way when they were younger.
Your Active Retirement Years
When you realize that you should plan ahead for the different stages of aging, the first stage will be the active retirement years. This is easy for many people to embrace because the golden years when you put your working career behind you can provide you with long-awaited freedoms.
You can travel and otherwise cross things off your bucket list, enjoy leisure activities, and spend a good bit of quality time with family members. The retirement dream is certainly a worthy one, but it takes careful planning to be prepared from a financial perspective.
Social Security benefits are useful, but limited, so you should definitely register your account on the SSA website so that you know what to expect. In a similar vein, Medicare will provide a health insurance underpinning, but there are out-of-pocket cost that you should budget for in advance.
The Next Stage
As the years pass, you may start to find it difficult to handle all of your day-to-day needs on your own. This is no badge of dishonor because 70% of seniors will eventually need living assistance of some kind. According to the United States Department of Health and Human Services, about four out of every 10 people will eventually spend time in nursing homes.
If you are thinking that Medicare will pick up the tab if you ever require nursing home care, we have some bad news to pass along. This program does not cover the custodial care that nursing homes provide, and these expenses can be devastating.
Depending on the particular facility and its precise location, you can expect to pay anywhere from $70,000 to over $100,000 annually for a room in a nursing home. Costs have been rising each year so the numbers will only get bigger if you need care in 10 or 20 years.
The average length of stay is twelve months, and it is important to recognize that your family could be faced with two different sets of nursing home bills if you are married.
Nursing Home Asset Protection
From the time that you start to think about your initial retirement period, it is wise to think in a holistic manner with the twilight years in mind as well. Medicaid will pay for long-term care, and in fact, most people in nursing homes are enrolled in the program.
You are probably aware that Medicaid is intended for people with significant financial need so there are low income and asset limits. The solution is to engage in well thought out Medicaid planning, which will typically involve careful transfers to loved ones.
You have to be careful about these transfers because there is a five-year look back period. Most gifts must be completed at least 60 months before you apply for eligibility. Your application will be denied if you violate this rule, and the exact duration of the penalty will be depend upon the amount that you gave away within this five-year window. This means Medicaid planning is key.
Schedule a Consultation Today!
We would be more than glad to answer your questions and help you put a solid plan in place that protects your legacy for the benefit of your loved ones. To set the wheels in motion, send us a message to request a consultation appointment or call us at 606-324-5516 in Ashland, Kentucky, 859-372-6655 in Florence, Kentucky, or 704-944-3245 in Charlotte or Huntersville, North Carolina.
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