Return to the Brecht Associates Site Planning For Retirement: It's More than Just Financial by Nicole D. Muller Planning for our retirement years is something that we all know we should do. Even when we were young children our parents taught us to save our pennies for a rainy day. As we grew older, it seemed that everyone from insurance agents to financial consultants stressed the importance of saving for our retirement years. Add to that the fear that we may not be able to count on Uncle Sam to provide for us when we reach the magic age of 65, we can understand why proper planning is so important. Sound financial planning, however, is not enough to consider when thinking about retirement. Proper planning for your future health care needs should receive the same attention. Even those who have been diligent savers and have set aside a comfortable nest egg for retirement can quickly drain their assets with an unexpected nursing home stay. The annual cost of quality nursing home care can well exceed $60,000 and there is an 80% chance that you or someone in your family will require long-term care. Standard health care insurance typically does not cover the costs of long-term care and Medicare may not either. Determining your future health care needs is not as easy to define as creating a proper savings and investment plan. The future is uncertain and we simply don't know what lies ahead for our health. Most people would say that they have a common goal of maintaining their health and enjoying an active, fulfilling lifestyle in their retirement years. Just as important is knowing that if we need assistance or nursing care it will be available and affordable to us. Continuing Care Retirement Communities and long-term care insurance are two options which reassure us that if nursing care is needed in our later years, we can access the services we need without worrying about the costs. Both options require research and planning before there is a health crisis. Many CCRCs have long waiting lists which can range anywhere from two to five years and require that an incoming resident be fairly healthy and able to live independently. Likewise, a long-term care insurance policy is issued to a healthy person. Premiums are typically based on the age at which you buy the policy and become more expensive the longer you wait. By taking a proactive approach to future health care planning, we can make an informed decision about how and where we would like to be cared for. Many active and healthy seniors choose to move to a continuing care retirement community for financial and physical security in their retirement years. In essence, they are planning ahead for their future health care needs and ensuring that they will be taken care of no matter what happens to their health. A CCRC provides independent living, assisted living, and nursing care all on one campus. This choice allows seniors to live in a socially stimulating and homelike environment and have peace of mind knowing that care will be available if needed. Traditionally CCRCs have charged substantial entrance fees which are a form of insurance toward future health care needs. These contracts are known as life care contracts, meaning that you will be taken care of for life. Many CCRCs in the Philadelphia region require an entrance fee, some are non-refundable while others can be partially or fully refundable. A monthly fee is also paid and normally includes services such as utilities, maintenance, housekeeping, meals, transportation, activities and medical needs. The CCRC concept allows someone to move to the community while they are active and healthy and progress through the continuum as needed without paying more money than they are accustomed to. There are also fee-for-service CCRCs which offer the same services and amenities except the resident pays for only the services they need. In this type of community, a resident may initially pay less in the form of an entrance fee and monthly fee. If they need more assistance in the future, however, costs can become substantially more. A few of these fee-for-service communities are beginning to work with long term care insurance companies to offer coverage to residents who feel more secure knowing that if they need nursing care, their insurance policy will pay for the services they require. Long-term care insurance is one way to guard against the unknown health care needs you may face in the future. It is an increasingly popular choice for those who want to protect their financial assets, whether they live at home or in a retirement community. Lifecare communities in essence are already providing insurance to their residents so it is not necessary to maintain a policy. However, as Elaine Kaiser, Director of Admissions of Dunwoody Village explains, "CCRC's often have long waiting lists and long term care insurance can be useful to protect a future resident's assets and ease their mind until they actually move into the community.Ó Long-term care insurance covers the high cost of nursing home stays, home health care and in some cases assisted living and adult day care programs. It also offers peace of mind to you and your family knowing that lifelong savings will not be drained. Annual premiums can be quite significant and therefore are recommended for those wishing to protect at least $75,000 in assets in addition to their home. The choice between CCRCs and long term care insurance is a personal one. While the options differ in many ways, some of the motivating factors for planning ahead are the same: protecting assets, not wanting to be a burden on family members, and guaranteeing that when someone is most in need they will be cared for without worrying about the costs involved. Whichever your choice, plan ahead and carefully research the various options. Be sure to understand exactly what is included and at what cost before making your decision. Return to the Brecht Associates Site