I was talking to a client a couple of weeks ago about long term care insurance. One of her most important goals is to be able to remain in her home if she needs care later in life. We were talking about the cost of 24/7 home care. She has an aunt in the Boston area that’s paying $30/hour for 24/7 care. Thirty dollars per hour doesn’t sound like too big of a deal until you do the math and realize how many hours there are in a year. In case you’re wondering, there are 8760 of them.
8760 X $30 = $262,800
$262,800 is a really big number. Having some personal experience with this, my guess is the real number is actually higher. For example, if the caregiver isn’t a “live in” caregiver, you need to pay overtime for anything over 40 hours per week. Well, there’s 168 hours in a week. That means 128 hours at a much higher rate than $30 if there’s only 1 caregiver.
There can be additional expenses as well. An agency that I know charges more if the client doesn’t sleep through the night, if they require transportation to doctor appointments, or if they’re working on or near holidays.
Most people think this will never happen to them, but it does happen, and it happens often. Here’s a stat from longtermcare.gov: “Someone turning 65 today has almost a 70% chance of needing long term care services and supports in their remaining years.” Seventy percent is another big number.
Further, most Americans don’t have nearly enough assets to pay for this type of care. A recent report from the Federal Reserve showed an average net worth of $187,300 in the 55-64 age group. Do the math. That’s not going to last long.
I really think this is one of the biggest financial risks that most of us are facing today. There are lots of ways to plan for it, but some form of long term care insurance is worth considering. In addition, if you’re an employer, adding a discounted, employee paid long term care insurance program could be one of the most impactful benefits you can offer your employees.
If you’d like to learn about adding long term care insurance to your benefits plan or explore the option for yourself, call us at 866-724-0008 or click the link below.