Although nearly 70% of today’s 65 year olds will eventually need elder care services, only 10% have purchased long term care insurance to cover this major financial risk. Several hundred thousand dollars may not be enough savings to cover the cost of elder care expenses. Very few retirees today either want to or have the resources to purchase such insurance since its cost greatly increases as we age. So what alternatives exist for those without insurance coverage? What government and private programs are available for them?
During my 25 years as an attorney, CPA, and retiree financial consultant, I have observed that very few people truly understand their options. For example: o Many people think Medicare will pay for long term care, but this is not true. Medicare is health insurance, and pays for a maximum of 100 days in a nursing home. You pay the rest.
o Many people have misconceptions about Medicaid, and what is required to receive it. Most people can shelter at least one-half to three-fourths of their assets & still receive Medicaid.
o There is a veteran’s benefit that pays for elde rcare, but only 5% of eligible people are receiving this entitlement, due to misinformation. Benefits can be as much as $30,000 per year.
o There have been major tax law changes in elder care in the past few years, yet few retirees are taking advantage of new tax-saving opportunities that exist. For example, existing nonqualified annuities can be transferred into tax-free long term care annuities that grow 6% per year.
o There are new financial instruments and investments available which provide tax-free elder care benefits in addition to tax-deferred interest and estate benefits. Every dollar invested in a cash account can provide 2 – 3 times as much in tax-free long term care or estate benefits.