Considering the rising costs of nursing homes and assisted living communities, prudent long term planning is necessary to make sure that you are prepared financially for all of the eventualities that you will face as you enter your twilight years. It is likely that you or your aging parents will need long term care at some point in time, and this is something to address both as an individual and as a family.
The current national average cost for a year in a nursing home is over $83,000, and assisted living facility charges are near $40,000; in New Jersey these numbers are considerably higher. Depending on your means, you may be able to use existing resources to comfortably cover these expenses. Others may have to consider using their savings, and this can impact your legacy planning significantly.
Long term care insurance is certainly an option, and if you choose to go this route the sooner you take out the policy the less expensive the premiums will be. Due to the high cost of this insurance some people choose to take out a reverse mortgage to pay the premiums. This is a type of loan that allows you to use your home as a source of income, essentially selling equity that you have back to a mortgage lender.
Medicaid also pays for nursing home care for eligible recipients. If you meet the qualifications you may be able to get the financial assistance that you need in this manner. However, Medicaid laws could be described as somewhat complex and it is difficult for the layman to negotiate those waters without professional assistance.
Because long term care is such an uncomfortable topic to discuss, the temptation exists to sweep the matter under the rug and never prepare to address the costs intelligently. But the fact is that most people need to make advance plans to have the resources that they need to pay for long term care, and this is best accomplished with the assistance of an experienced elder law attorney.