Without question, if you take the right financial steps along the way, you can enjoy your active retirement years to the fullest. These years can actually be some of the best years of your life.
All of this is well and good, but the period of time that will follow the active years is something that you should also plan for in advance. People call this stage of life the twilight years. Unfortunately, there are some unpleasant realities that could present themselves during this phase.
Long-term care can enter the picture when you reach an advanced age. Though it can be hard to envision a time when you will not be able to take care of all of your day-to-day needs on your own, most seniors eventually need help with their activities of daily living.
There are those who can receive the assistance that they need in their own homes. Friends and family members will often be willing to step up, but even when you have a solid support system, there are limits to the capabilities of the caregivers. The reality is that a significant percentage of senior citizens ultimately reside in nursing homes.
The “oldest old” is a descriptive term that is used throughout the geriatric community. This term is used to describe people who are at least 85 years of age. According to a study that was conducted by the United States Census Bureau, 24.5 percent of the oldest old are residing in nursing homes. Nearly half of people who are at least 95 years of age are nursing home residents.
These are some compelling statistics, and you should be aware of the fact that the segment of the population that was between 85 and 94 years of age grew faster than any other between the years 2000 and 2010. Once you reach the age of 67, it is likely that you will live into your mid eighties.
When you digest the implications, you can see that there is a distinct possibility that you will ultimately reside in a nursing home toward the end of your life. These facilities are extremely expensive around the country, but the prices here in our area are higher than the national averages. A couple of years in a nursing home here on Long Island could cost upward of $250,000.
You cannot look toward Medicare for help with long-term care costs. The Medicare program will pay for convalescent care, but it does not pay for long-term living assistance. However, there is a solution that many people embrace in the form of Medicaid.
Medicaid is a jointly run federal/state government health insurance program, and it does pay for long-term care. It is intended for people who have a significant level of financial need. Since it is a need-based program, there is a low limit on countable assets. This limit stands at just $2000 at the present time.
If you are in possession of resources, and you want to be able to qualify for Medicaid to pay for long-term care if you ever need it, you could give gifts to your loved ones. Direct gift giving is certainly an option, but it would also be possible to fund a Medicaid trust. You would not be able to access the principal, but you could receive income from the earnings of the trust before you apply for Medicaid.
This sounds like a rather simple and straightforward proposition, but it is more complicated than it appears to be on the surface. This is because of the five-year look-back. The gift giving has to be done at least five years before you apply for Medicaid. If you violate this rule, your eligibility for coverage is delayed.
Learn All the Facts
Now that you understand a few things about long-term care and the importance of Medicaid planning, you may want to take the next step. Our firm would be glad to discuss your situation with you in person. We can get to know you, become apprised of your financial situation and your family dynamic, and we can ultimately help you put a plan in place.
If you would like to schedule a no obligation Medicaid planning consultation, give us a call at (631) 265-0599. You can also feel free to drop us a message through our contact page if you prefer to get in touch electronically.