Today's seniors are living longer, more active lives, often well into their 80s and even 90s. But the problem is that, for many, their savings haven't kept pace with their longevity. Senior citizens dread becoming a burden to their family members and also being shut away in a nursing home full of strangers.
It doesn't necessarily have to be an either/or situation. Estate planning attorneys are adept at finding the best solutions for each individual's unique circumstances, which can include tapping or liquidating resources like life insurance policies or the former family home.
But how much will I need?
Costs of living in California are higher than in many other areas of the United States, so that must be factored into the equation when trying to calculate how much the average senior will need in order to be able to afford assisted living care in a community setting. One cost of care survey done by Genworth in 2014 found that, on average, in an assisted living community, a single-bedroom apartment goes for $42,000 annually, which is far cheaper than the $87,600 it would cost for a private room for a year's stay in a nursing home.
For some, those figures might still seem high, especially if they are in relatively good health but perhaps lack the mobility to navigate steps or maintain their home like they did, yet don't want to leave it. There are other options.
Aging in place
While it might not be the solution for every senior, many are choosing to age in place. This can be a viable option for those who have family members in or near their area who can check in on them frequently and offer assistance with the household maintenance tasks that the senior citizens are no longer able to manage on their own.
Many long-term care (LTC) insurance policies also cover in-home personal care assistance so seniors remember to take their medications on schedule, have someone to prepare meals, do light housekeeping and even accompany them to and from doctor appointments.
There is a catch with LTC insurance, however. Unless it is purchased when the person is in good health, it becomes prohibitively expensive, which is yet another reason why estate planning should be part of every young adult's portfolio. But some life insurance policies can be converted into LTC plans that will cover costs of senior care.
What about reverse mortgages?
Reverse mortgages are another possible option for paying for senior care. There are pros and cons to this type of solution that are too numerous to delve into in this post. One of the conditions of reverse mortgages is that the homeowner has to continue living in the home, so this obviously will not be the best choice for all seniors.
If you wish to explore the topic further, reach out to a California estate planning attorney for advice and guidance.