The high cost of nursing home care is something to take very seriously when you are budgeting for your senior years. In fact, these expenses are quite relevant when you are planning your estate as well because they can erode your financial legacy considerably.
It can be difficult to envision a time when you may not be able to care for yourself, but the statistics don’t lie.
The MetLife Mature Market Institute puts out an annual survey that sheds light on the state of long-term care costs. In Cleveland in 2012 the average daily charge for a private room in a nursing home was $227. If you get out your calculator and multiply this figure by the 365 days in year you are looking at an annual expense exceeding $82,800.
Clearly length of stay will be a consideration when you are assessing potential future costs. Exactly how old you are when you enter the facility will be a factor, but according to the most recent National Nursing Home Survey the average length of stay is 835 days. Around 10% of nursing home residents that are between the ages of 75 and 84 spend at least five years receiving care.
If you are thinking that you are not overly concerned about long-term care costs because you will be eligible for the Medicare program as a senior citizen you would do well to understand the fact that Medicare won’t pay for an extended stay in a nursing home.
Medicaid will pay for nursing home care, but you have to plan ahead carefully to stay within the upper resource limits. The purchase of long-term care insurance is another option.
It is important to be aware of these significant costs that may be looming in the future so you can take steps to prepare yourself while you have the time and the ability to do so.