May 2015 Bar Bulletin
Financial Planning for a Better Retirement
By Rajiv Nagaich
Fourth in a Series
(Second of Three Parts)
(Last month's article discussed Medicare as an option for paying for long-term health care costs and, in conjunction with the use of private assets, avoiding the necessity for institutional care.)
For those with the financial depth to afford it, it's possible to pay privately for long-term care and in fact much of the financial burden already falls to individuals and their families.1 However, few retirees can afford the cost of paying out of pocket for long-term care without blowing through their life savings.2 That leaves finding other options as the only recourse.
So, how does a person with a small to medium-size estate afford home care without running the risk of going broke? Those estates that can't rely upon private assets to cover their long-term costs will need to look at other options if they want to protect their assets.
Long-Term Care Insurance
Despite the significant financial threat to the elderly posed by long-term care needs,3 an amazingly low percentage of the population carries a long-term care policy.4 More concerning is that those people with the foresight to purchase a long-term care policy operate under the mistaken belief that the policy will cover all of their long-term care costs.
Many retirees find that:
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