When you are looking over the horizon toward the time when you will be able to put your working years behind you, your retirement dream will start to come into focus. As a responsible person, you invariably recognize the need to build a nest egg to draw from during your senior years, and you estimate the overall resources that you will need to support your desired lifestyle.
The majority of people will qualify for Medicare coverage when they reach the age of 65. You earn retirement credits when you pay your taxes, and you can earn up to four credits per year. This is easily done, because the requirements are modest. Once you have at least 40 credits in the bank as it were, you will qualify for Medicare coverage when you reach the age of eligibility.
Most people don’t worry too much about health care costs when they are looking ahead toward their retirement years, because they know that they will qualify for Medicare. There are some out-of-pocket expenses, and they can be noticeable, but most people can manage them without significant hardships.
However, there is a considerable hole in the coverage, and many people do not understand the ramifications. The Medicare program does not pay for nursing home costs. This can seem counterintuitive since Medicare is intended to help seniors with health-related expenses, but it is a fact of life.
Genworth Financial Study
A study is being conducted by Genworth Financial, and they are doing a lot of research into the current state of long-term care costs around the country. They don’t paint with a broad brush; they dig down deep to provide statistics for each metropolitan area.
As we all know, there are many retirees in the state of Florida, so there are a lot of assisted living facilities of various kinds. The study shows that the costs are quite high at the present time, and since Medicare does not pay for long-term care, this is very significant. Nursing home costs can potentially consume all or most of the legacy that you would like to leave behind to your loved ones.
At the present time, the median annual cost for a semi private room in a nursing home in the Naples area is just under $100,000. This is a good bit of money, especially when you consider the fact that the average length of stay is over two years, and 10 percent of nursing home residents remain in the facilities for at least five years.
Unfortunately, according to the study, things will get worse before they get better. Over the next five years, the median cost for a semi private room is expected to rise by three percent per year. If you ultimately require nursing home care in 10, 20, or 25 years, the costs could be considerably higher than they are on this day.
We should also pass along some information about assisted living community costs. The median annual cost for residence in an assisted living community in the greater Naples area is over $51,000.
Nursing Home Asset Protection
What can you do to address these nursing home costs so that you can have something left to leave to your loved ones after you are gone? Many people take steps that lead to Medicaid eligibility. This is another government health insurance program, and it is jointly administered by the federal government along with the state government.
You may be aware of the fact that Medicaid is a program that is intended for people with a significant level of financial need. The limit on countable assets for a single applicant is just $2000.
To qualify for Medicaid, you could endeavor to give gifts to your loved ones to stay within this limit. Plus, if you are married, your spouse is entitled to the retention of a certain amount of property.
All of this takes careful planning, because there are time constraints. There is a five-year look-back. If you divest yourself of assets, the divestitures must be completed at least five years before you apply for Medicaid.
Though it takes careful planning, if you work with an estate planning attorney, you may well be able to get the care that you need without losing everything that you have been able to accumulate throughout your life.
Schedule a Consultation
If you would like to discuss the future with a licensed estate planning attorney, our firm would be glad to help. We provide our clients with personalized attention, and we can answer all of your questions and make recommendations based on your unique set of circumstances.
Give us a call at 239-225-7911 or send us a message through our contact page to set up an appointment.