Long-term care isn’t a subject that we generally enjoy talking about. It’s difficult to even think about the possibility that we and the ones we love might need someone to look after us in our golden years. But as life expectancy continues to rise, so do the chances that we will require long-term care one day.
Long-term care takes a number of different forms. It’s not limited to stays in nursing homes (although that’s a significant component). Sometimes the elderly can do most things for themselves, but need help with certain activities such as bathing, housekeeping or medical needs. These needs can be met by assisted living facilities or home care providers, but they too cost money.
Making sure we’re taken care of as we age is critical to our quality of life, as well as that of our families. That’s why it’s so important that we plan for long-term care. There are several ways that we can do this.
Retirement Plans
When we think of saving for retirement, our primary concern tends to be keeping the bills paid when we’re no longer working. But it is possible to save up enough to cover any long-term care needs you may have. The catch is that you must start early and contribute the maximum allowable amount for many years.
Unfortunately, many of us don’t start saving for retirement as early as we should. We may even have trouble saving up enough to have a small amount of financial security. If you want to have enough of a nest egg that you won’t have to worry about money after you retire, you need to start saving aggressively from the time you get your first job.
Annuities
For those who are approaching or have passed retirement age, annuities are an attractive option for the provision of long-term care. These financial products are purchased from life insurance companies. The annuitant deposits money into an account, either in a lump sum or in payments. He then receives, either immediately or at a specified time in the future, payments from the annuity.
The insurance company may pay the annuitant in a lump sum or in payments. The payments may last for a certain amount of time, or for the remainder of the annuitant’s life. The proceeds of the annuity may be used for any purpose, including long-term care.
Long-Term Care Insurance
Long-term care insurance has become more popular over the last several years. In exchange for the payment of premiums, either in a lump sum or over time, the policy holder receives benefits when long-term care is required. However, there has been some debate over such policies’ usefulness.
When considering a long-term care policy, it’s important to look it over carefully. Premiums usually rise as the policy holder ages, and many policies do not cover the cost of inflation adequately. A lawyer or accountant can help you determine which long-term care policy is best for you.
Put Everything in Writing
In addition to financial planning, it’s important to make your wishes for long-term care clear before the need arises. You need to specify which types of care you prefer or are willing to accept, and designate someone to make decisions on your behalf if you are unable to do so. And all documents such as your will, living will and insurance policies should be kept in a safe place, with someone designated to retrieve them if needed.
No one enjoys planning for long-term care. But it’s something that needs to be done. Getting it out of the way early makes good sense, and it can help ensure that the money is there when you need it.
Tags: Annuities, long term care, retirement, retirement planning
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on Thursday, August 27th, 2009 at 10:30 am and is filed under Planning.
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Good article mf,,, I think that an annuities retirement can be a good option for your life, because, you don’t be worried in your expenses when you are enjoying your golden years.