Two ways to prepare for potential long-term care costs

DEWITT, Mich. - Dec. 12, 2014 - PRLog -- You may be aware that Medicare is the primary source of health care coverage for retirees. But you may not know that there are many health-related costs it doesn't cover.

Of all the expenses Medicare doesn’t cover, long-term care is potentially the biggest. Traditionally, the term "long-term care" has implied nursing home care. But it can also refer to assisted living, home health care and adult day care, with costs varying based on the type and amount of care. Medicare will cover only short-term stays (up to 100 days) and a portion of the costs – and only if the stay is medical, stemming from a recent hospital stay.

Will you need long-term care? That's impossible to predict. While one-third of today's 65-year-olds may never need long-term care support, 20 percent will need it for longer than 5 years.¹ Trends show this already expensive cost is on the rise. Potentially, the cost of nursing home care can exceed $87,500 per year.² And these costs, if left unaddressed, could potentially derail the retirement strategy you've crafted.

You can't control if you'll need long-term care, but you can prepare for these costs by:

Incorporating the cost of long-term care into your budget. An Edward Jones financial advisor can run scenarios to help determine if your strategy could withstand a long-term care expense for a number of years, including the effects of inflation.
Transferring the risk to an insurance company by purchasing insurance. There are many options to consider, including traditional long-term care insurance (LTCi) or life insurance with long-term care benefits. You'll need to weigh a number of factors, including the costs, benefits and trade-offs of each. This should include the flexibility of the policy in terms of where you receive care (in a care facility versus in your home). In addition, some policies may offer the option of using the coverage toward long-term care costs in lieu of a death benefit. Policies and costs can vary dramatically based on factors such as your age, health, gender and the amount of coverage desired. It's crucial to weigh all the benefits and trade-offs of these policies to determine what is most important to you.

While health care costs may be beyond your control, you can control how you prepare. Your Edward Jones financial advisor can work with you to better understand your desired retirement lifestyle, estimated expenses (including health care) and sources of income to develop a retirement strategy to help you achieve these goals.

Edward Jones operates as an insurance producer in California, New Mexico and Massachusetts through the following subsidiaries, respectively: Edward Jones Insurance Agency of California, L.L.C., Edward Jones Insurance Agency of New Mexico, L.L.C. and Edward Jones Insurance Agency of Massachusetts, L.L.C.

We have provided this information for educational purposes, and it isn’t meant to promote the sale of insurance or investments. The examples used in this report are for illustrative purposes only and shouldn’t be relied upon as a quote or description of coverage for a particular insurance product.

Edward Jones doesn’t offer health insurance; however, we believe discussing the impact of health care costs within your retirement strategy is important, especially considering that rising health care costs may affect many investors approaching retirement.

While the Medicare content is believed to be accurate, you should rely on information provided by the organization before making a Medicare decision. For more information on Medicare, visit www.medicare.gov.

¹ U.S. Department of Health and Human Services, November 2014. How Much Care Will You Need? (http://www.longtermcare.gov/the-basics/how-much-care-will...)

² Genworth 2014 Cost of Care Survey, conducted by CareScout^®, April 2014. Based on National median annual cost for a private room in a nursing home. CareScout is a Genworth company