Retirement Planning – An Essential Part of Your Finances

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Retirement planning is a vague and difficult idea for many Americans. Long-term care is inevitable for everyone embracing old age. Underestimation of the care needed leads to the belief that health care insurance will suffice.

The retirement phase is going to come in the life of everyone. Its necessary not only for you but also your spouse or  parents. It comes to every American’s life.

Assistance after the age of 65 is needed for everyone in one form or another. Sometimes a sudden injury or suffering imposes upon a person to need some help in maintaining their quality of life.

The costs of such care can surpass your retirement savings. And if the care is needed for long-term, the cost can increase up to $138,000 or even more. Most  Americans say that they have not done any financial planning for their long-term care.

Real Picture of the cost

The cost of different types of services increases with time. But a rough estimate helps a person prepare. A nursing home, for example, costs almost $97,000 a year. Hiring a personal healthcare individual can be up to $20 an hour. Adult day health center charges $70 a day.

Truth of Financing

Health care insurance or Medicare do not suffice the needs of long-term care. But these facilities do not cover nursing home stay or other individual care needed at home.  More than 50 percent of Americans have to pay for long-term care from their pockets. Some with severe needs of care end up reaching into their savings or rely on Medicaid.

Research Terms and Conditions of Medicaid

It is also essential that you search for the rules or terms and conditions of Medicaid. This can give you awareness and you can find other plans if this is not feasible. Annuity payments, for example, can be counted as income.

Long-Term Care Insurance

Long-term care insurance is not a part of a plan for many Americans. Only 11 percent of the citizens have private long-term care insurance. The reason is premiums are expensive for most of the population.