Q: I currently do not have long-term care insurance If I need nursing home care in the future, can I count on my Social Security benefits to cover the expense?
A: Congratulations on thinking ahead as to the financial impact that long-term care may have on your retirement. Unfortunately, however, your Social Security benefits will fall far short of covering any potential long-term-care costs.
According to the Centers for Medicare & Medicaid Services, 40 percent of Americans need a period of care in nursing homes. The average stay is 835 days, and a private room costs on average $248 a day. At $222 a day, a semi-private room isn’t much cheaper. These expenses can financially cripple a family, so you are smart to be thinking ahead.
As you plan for the expenses that may erode your retirement savings, please keep in mind that Medicare will provide coverage for rehabilitation — but not long-term care. As long as you were able to receive medical care in your own home, you would be eligible for up to 35 hours per week of home health services through the Medicare program.
If you required long-term care but did not have enough savings to cover the costs, you would become eligible for Medicaid. Likewise, if a protracted stay in a nursing home facility depleted your assets, you would then become eligible for Medicaid.
— Justin Anderson, CFP, CRC, CLU, is a financial planner and Bibi Taylor, MBA, is the Social Security project coordinator at AmeriFlex, 3700 State St., Suite 310, in Santa Barbara. Call 805.898.0893 for more information. They teach a course called "Savvy Social Security Planning: What Baby Boomers Need to Know" through Santa Barbara City College's Center for Lifelong Learning. Financial advisors and registered representatives associated with AmeriFlex Financial Services offer securities and advisory services through SagePoint Financial Inc., member FINRA/SIPC. Insurance services offered through AmeriFlex Financial Services, which is not affiliated with SagePoint Financial Inc. or registered as a broker-dealer or investment advisor. Registered representatives may only discuss and/or transact securities business with residents of the following states: AR, AZ, CA, CO, FL, GA, IL, IN, MI, MO, NC, ND, NJ, NM, NV, NY, OH, OR, PA, PR, SC, TX, VA, WA, WI.