Include Long Term Care When Planning for Retirement

Developing a sound plan for retirement can be challenging since you need to consider myriad of factors first. Considering your income is just one facet and your future expenses are another factor to consider. Planning for retirement includes critical aspects like longevity and health since it is unknowable and yet has a big impact in your future. 

Long term care is dubbed as a considerable expense so it’s ideal to prepare for this as early as possible. As a matter of fact, U.S Bureau of Labor Statistics revealed that the cost of health care has risen to nearly 6% annually, while the core inflation has risen to 2.5%. 

It is important to know the cost of care and find the most efficient payment option for this. But keep in mind that Medicare does not cover the core of long term care. You can opt for other options such as your retirement income, long-term care insurance or combination of the two.

For your guidance, here are some questions you can consider when planning for retirement that covers long term care cost:

• Will you have all the savings and assets on hand at retirement to cover all or most of your projected health care costs?

• Are you and/or your spouse in reasonably good health now and does your family have a track record of living into their 80s or 90s?

• Will you work during any stage of retirement and earn money?

• Do you know when you want to start taking Social Security, and why?

• What do you project will be your annual income and expenses during retirement, and have you factored in the need to increase your annual income beyond inflation to address potentially higher health care costs?

• If you need long-term care, have you factored in what those needs and costs might be?

• Do you have an understanding of various types of long-term care insurance policies, how they can be funded, what they provide and for how long?

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