Figuring out a strategy for long-term care is more complicated than just buying an insurance policy. Many people on the verge of retirement or already retired aren't worried about long-term care for themselves. They're struggling with long-term care for their aging parents who are too old to be covered by a long-term care policy.
Caring.com, a website that offers advice to caregivers, recently surveyed more than 1,000 family and friends caring for people with Alzheimer's about the financial impact they were feeling from this responsibility. Here are some key results:
- 39 percent said they had to quit, retire early, reduce hours or take a leave of absence from their jobs.
- 41 percent spent $5,000 or more during the past year, with the median amount spent about $10,000.
- More than 40 percent were extremely or very concerned about the impact on their own savings.
While it's a retirement planning dilemma without a lot of really great solutions, one partial solution could be a program called Cash & Counseling, which is available in about 30 states and administered by Medicaid. This program gives seniors who qualify money to pay family members or others to provide care. The amount is based on the older person's financial situation and the cost of home care in the region. In general, the financial guidelines are more generous than the limited levels for people seeking nursing home care. To check availability in your state, contact the U.S. Department of Human Services' Eldercare Locator online or by phone at (800)677-1116. Ask them about direct payment programs for in-home care.
Whatever the circumstances, if you are being paid by a family member to care for them and there's a possibility that down the road they may need to qualify for a Medicaid-paid nursing home, Caring.com recommends getting knowledgeable help to create a formal personal-care agreement that will show that these payments to you were not an attempt to reduce savings levels in order to qualify for Medicaid.