When you think about retirement, the leisurely days engaging in your favorite activities will naturally come to mind. You can keep yourself in shape, enjoy time with your family members and friends, cross things off your bucket list, and simply enjoy your free time to the fullest.
Without question, these golden years can be a fantastic reward for a life of hard work and sound money management. This being stated, you should also consider the twilight years that will inevitably follow. Unfortunately, the harsh realities in this regard are a bit disconcerting, but it is best to meet them head on.
It is impossible to truly understand a very profound life experience that you have not had, and this enters the picture when it comes to planning ahead for the latter stages of your life. This being stated, the statistics paints a very compelling picture, and we are all subject to the eventualities of aging.
The United States Social Security Administration has a great tool on its website that you can use to determine your life expectancy based on your age at any given time. We used of this tool to find out the anticipated lifespan for someone that is turning 67 on this day. For a woman, it is 87, and for a man, it is 85 years.
Once you reach this age, it is likely that you will require help with your day-to-day needs, and many octogenarians reside in nursing homes. Nursing home costs can potentially consume everything that you intended to leave to your loved ones, so this is a very serious matter.
If you are thinking that you are not concerned because you will qualify for Medicare as a senior, we hate to be the bearers of bad news, but this program does not pay for nursing home care. It will assist with convalescent care costs after surgery or an illness, but it does not cover custodial care.
Costs are rising on an ongoing basis, but at the time of this writing, you are looking at somewhere in the vicinity of $140,000 for a year room in a nursing home in our area. The average length of stay is around 12 months, and you and your spouse have to brace yourselves for two rounds of these expenses if you are married.
Now that we have set the stage appropriately, we can provide an explanation of Medicaid planning.
Medicaid is a jointly administered federal/state government health insurance program that will pay for a stay in a nursing home. You are probably aware of the fact that it is intended for people with limited resources, so there is a low asset limit of just $2000.
How can you qualify for Medicaid if you have resources when you are an elder? The answer is that you could engage in a process called a Medicaid spend down. In spite of the name, people do not typically spend the money themselves; they give gifts to their loved ones before they apply for Medicaid coverage.
This can be done, but it takes careful planning because of the existence of the five-year Medicaid look back period. You are penalized, and your eligibility is pushed back if you divest yourself of assets within 60 months of the date of your application submission.
For this reason, you must plan ahead carefully in advance with the assistance of an elder law attorney if you want to be optimally prepared.
We Are Here to Help!
As you can see, this is a very serious matter, but you can safeguard your legacy if you take the right steps at the right times. Our doors are open if you would like to discuss a nursing home asset protection strategy with a licensed attorney. You can send us a message to request a consultation appointment, and we can be reached by phone at 631-265-0599.
- Are You Entitled to Veterans Aid & Attendance? - May 24, 2023
- Top 10 Retirement Planning Tips - May 17, 2023
- What Can I Do to Prevent Sibling Disputes? - May 3, 2023
See Larger Map