Andrei Murphy talks about different insurance coverage options that senior couples can utilize to minimize the financial impact of latter years and retirement.

1. How to Plan for Long-term
Healthcare Costs

2. With increasing healthcare costs, it
can be difficult to plan for the
future. Senior couples are more and
more often finding themselves unable
to financially cope with retirement
despite extensive planning. The rising
costs are impossible to predict. Illness
itself can range nearly anywhere in
cost, lasting for an undisclosed amount
of time that is bound to make a dent
in the bank account. With these
unknown variables, it only makes
sense that elderly couples are finding
themselves underprepared,
overwhelmed, and intimidated by an
unknown future.

3. That’s why it’s so important, even if difficult, to try and plan for such health-care
uncertainties. Although absolutely easier said than done, there are a few different forms
of insurance coverage that middle-age couples can begin to implement in order to
diminish the rising healthcare costs of contemporary society. With the average cost of
healthcare for a 65-year old healthy couple retiring this year hovering at an astounding
$394,954, it is time to take action:

4. Long-term Care
Intended to cover an
established period of
time, long-term care
insurance
encompasses health-
care-related expenses
like at-home care or
assisted living, two
aspects of healthcare
that are all-too-often
either very limited in
coverage or
completely absent
from plans to begin
with.
Michael Resnick, a Chief
Financial Planner at GCG
Financial, speaks up, “I have a
client whose husband did
almost everything right in
planning for retirement.
The one thing he missed in
his retirement planning was
long-term care insurance,
and now he has dementia
and his wife was forced to
put him into a facility. Now
the wife is concerned that
she may not be able to
afford to stay in her home.”
This anecdote is a common
tragedy; and sadly enough,
there really is no simple answer.
While, yes, long-term care
insurance could have worked
here, that does not
acknowledge the fact that the
costs are high, and the
different plans are difficult to
implement and use to your
advantage. Not to mention,
there is no guarantee that
premiums won’t rise, and that
would only further strain the
fiscal situation. So, while yes,
LTCI is worth keeping in mind, it
is not necessarily always the
right choice.

5. Medicaid Planning
While many have the ‘luxury’ to rely on Medicaid to cover LTCI
expenses, there is a central issue. You can only qualify for
Medicaid if all of your other assets have been depleted, used up,
are gone. This means that you have literally nothing to leave for
beneficiaries, and are entirely unable to supplement your care.
However, there is a way around this. Set up a “Medicaid-
proof Trust,” which is essentially an irrevocable trust that
passes along its contents to your heirs when you pass
away. A trustee needs to be established, and then they can
supplement care with those assets in the trust. That said,
there is no guarantee that the trustee will do so, since they
don’t have to do so. In light of such, make sure you know
the trustee will be more than willing to supplement your
care when the time comes.

6. Self-insured
Paying expenses out of pocket is an option,
albeit an expensive one. Generally reserved
for high-net-worth individuals, it tends to
mean that people will spend the money they
saved earlier in life when they were younger
in order to enjoy retirement to a greater
degree. However, again, this option can be
very pricey and will often mean that there
will be less left behind for heirs.
Just as well, should you opt to self-insure, you need to be aware that there
could possibly be extreme tax implications (and penalties) if you decide to
liquidate stocks, bonds, or anything of the sort.
When considering your fiscal future, it pays to think now rather than later. Assess your
options. Speak to a professional—and make the decision that makes the most sense for you.