The future of our health, and our parents’ health, is often unpredictable. Of course, family history might indicate what we’ll be facing as we reach our seventies and eighties, but there really is no way to know for sure. It’s likely, though, that long-term care – in a private nursing home or assisted living facility, or even at home with a private caregiver – is on the horizon.
According to AARP, 52% of people over the age of 65 will need some type of long-term care services in their lifetime. While the days of nursing homes and assisted living facilities might seem far in the distance, it’s important that a plan for long-term care is established years ahead of time.
There are many reasons to consider buying long-term care insurance. According to a 2016 study by the Urban Institute and the US Department of Health and Human Services, 14% of people in need of long-term care will require that care for five years or more.
Long-term care can drain a retirement nest egg pretty fast. AARP states that “the national median daily cost for a private bed in a nursing home in 2019 was $280 a day, or $102,200 a year…A yearlong stay in your own room at an assisted living facility runs $48,612.” Fidelity Investments reports that the average 401(K) balance was $105,200 in September 2019. In short, most people will need long-term care insurance in order to pay for their care.