When people think about retirement planning, they typically focus on the golden years that can be full of travel, leisure activities, and quality time with family members and friends. This is as it should be, and if all goes well, you can enjoy the fruits of your labor during this stage of your life.
At the same time, it is important to address the twilight years that will inevitably follow. Most people will need help with their activities of daily living eventually, and 35 percent of seniors will require nursing home care.
This may not be a very pleasant subject, but you should take it seriously so you can brace yourself in advance.
Medicare Misconception
Since more than one third of elders will ultimately reside in nursing homes, and Medicare is a health insurance program for seniors, you may assume that Medicare would pick up the tab.
This makes sense on the surface, but in fact, it does not cover the custodial care that nursing homes and in-home caregivers provide.
2020 Burlington, VT Long-Term Care Costs
The go-to resource for information about the state of long-term care costs in the United States is Genworth Financial. Their demographic is the senior population, so they make an effort to keep a finger on the pulse of this subject because it is relevant to their business.
They drill down to metropolitan areas within states, and the numbers for 2020 have been released.
In the Burlington, Vermont area, the median charge for a home health aide in 2020 was $68,640, which is a 9.09 percent increase. The median cost for a one-bedroom unit in an assistant living facility was actually less expensive at $65,100. This is a 6.11 percent increase over the 2019 figure.
The median charge for a private room in a nursing home in our area actually went down by 9.8 percent, but the number is still a rather attention-getting $134,320.
When you let these figures sink in, you can see that nursing home costs can consume a considerable portion of your legacy if you have to pay them out of pocket. And of course, the potential costs are doubled for married couples.
Nursing Home Asset Protection
What can you do in light of these rather disturbing statistics? Fortunately, there is a viable solution in the form of Medicaid eligibility.
Medicaid will pay for long-term care, but there is a $2000 asset limit. There are some things that don’t count, including your home, and we will explain these details at another time.
You can get assets out of your own name to qualify for Medicaid if you convey them into an irrevocable trust. Though you would not be able to access the principal, you could receive distributions of the trust’s earnings while you are still living independently.
If you need nursing home care, the assets in the trust would not count as long as you fund the trust at least five years before you apply for Medicaid coverage.
Attend a Free Webinar
We conduct webinars on an ongoing basis to provide direct learning opportunities. There is no admission charge, and they couldn’t be any more convenient, so this is a great way to invest a little bit of spare time.
You can check out the dates of you visit our webinar page, and when you identify the session you would like to attend, follow the simple instructions to register.
Need Help Now?
If you are past the learning stage and fully prepared to take action, we are here to help. You can schedule a consultation appointment if you give us a call at 802-879-7133, and you can fill out our contact form if you would prefer to send us a message.
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