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Kfs retirement healthcare

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Kfs retirement healthcare

  1. 1. © 2013 VSA, LP Valid only if used prior to January 1, 2014. The information,general principles and conclusions presented in this report are subject to local,state and federal laws and regulations, court cases and any revisions of same.While every care has been taken in the preparation of this report, neither VSA,L.P. nor The National Underwriter is engaged in providing legal, accounting,financial or other professional services. This report should not be used as asubstitute for the professional advice of an attorney, accountant, or otherqualified professional.Preparing for YourRetirementPlanning for Health CareNeeds in Retirement1a1-13
  2. 2. Did You Know ...2Preparing for Your Retirement: Planning for Health Care Needs in RetirementIn 2011, men reaching age 65 had an average additional life expectancyof 17.3 years, while woman reaching age 65 could expect to live anadditional 20.0 years on average. 11 Source: A Profile of Older Americans: 2011, U.S. Department of Health and Human Services, February 20122 Source: 2012 Retiree Health Care Costs Estimate, Fidelity InvestmentsWhile estimates vary, a couple retiring at age 65 without private health insurance from aformer employer can expect to pay significant out-of-pocket health care costs during theirretirement years.continued on next slide?Fidelity Investments, for example, estimates that a 65-year-old couple who retired in2012 needs about $240,000 to cover medical expenses throughout retirement, a 50%increase from the $160,000 first estimated for those retiring at age 65 in 2002.This estimate applies to retirees with traditional Medicare coverage and does not includecosts of dental care, long-term care or over-the-counter medicines. 2
  3. 3. Did You Know ...3Preparing for Your Retirement: Planning for Health Care Needs in RetirementAbout one-third of individuals turning 65 in 2010 will need at least three months ofnursing home care, 24% more than a year, and 9% more than five years. 11 Source: What Is the Distribution of Lifetime Health Care Costs from Age 65?, Center for Retirement Researchat Boston College, March 20102 Source: 2012 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home CareCosts, November 20123 Source: CDC Vital and Health Statistics, Series 13, No. 167, June 2009The national average daily rate in 2012 for a private room in a nursing home was $248, anincrease of 3.8% from 2011. 2The average length of a nursing home stay is 835 days. 3At an average daily rate of $248, an average nursing home stay of 835 days currently costsover $207,000.1/3> 3 months nursing home care
  4. 4. The Need4Preparing for Your Retirement: Planning for Health Care Needs in RetirementAccording to the Fidelity Investments 2012 RetireeHealth Care Costs Estimate,The rising cost of health care in the United States has becomeone of the primary risks to a financially secure retirement.continued on next slide“Todays workers must understand that the cost of health care is expected tocontinue rising significantly in future years. Medical inflation is outpacing salaryincreases and cost of living adjustments for many people. Until that situationchanges, it is critical that individuals include health care costs in their retirementsavings strategies today so they can be prepared to pay their medical billsthroughout retirement.”With health care costs expected to continue increasing faster thaninflation, the time to plan for your future health care needs is now…before you retire.healthcarecosts
  5. 5. The Need5Preparing for Your Retirement: Planning for Health Care Needs in RetirementAdvance Directives Paying for Health Care in RetirementHave you communicated yourmedical care wishes in the event yousuffer a catastrophic medical event?Have you named someone else, aspouse or other family member, tomake medical decisions for you in theevent you are incapacitated?Do you know what your out-of-pocket health carecosts might be after you retire?Are you aware that Medicare, while it coversmany health care costs, has significant limitations?Are you familiar with the various types ofinsurance that can help pay health and long-termcare costs not covered by Medicare?Long-TermCare ServicesAre you familiar with the variety of long-term care services available?If it becomes necessary, what type of long-term care services would youprefer?How will you pay for any needed long-term care services?Your ability to enjoy a financially-secure retirement can be enhanced by planning for futureneeds such as:
  6. 6. Long-Term Care Services6Preparing for Your Retirement: Planning for Health Care Needs in RetirementThe U.S. Department of Health and Human Services estimates that the older population in theUnited States (age 65+) will more than double by the year 2030, to over 71 million Americans.When coupled with increasing life expectancies, this "aging of America" has led to a rapidlygrowing variety of options available to senior citizens who require medical and personal careservices.continued on next slideNursing Homes Residents in nursing homes are in need of more intensive medical andphysical services. The goal of a nursing home (also known as a skillednursing facility, extended care service, or health care center) is to helpresidents meet their daily needs and to return them home wheneverpossible.Assisted LivingFacilitiesThe goal of an assisted living facility is to provide assistance and personalcare services as needed, while maintaining maximum residentindependence in a more home-like setting than that provided by a nursinghome.
  7. 7. Long-Term Care Services7Preparing for Your Retirement: Planning for Health Care Needs in RetirementContinuing CareRetirementCommunitiesHome HealthCare ServicesBy providing a variety of medical and personal services through nurses,therapists and home care aides, the goal of home health care is to make itpossible for senior citizens to retain a measure of independence whilereceiving care in the environment they most prefer…their own homes.The goal of a continuing care or life care retirement community is toprovide a range of services, from independent living through full-timeskilled nursing care, that can be modified to respond to a residentschanging needs.By planning ahead, you can help assure that you receive the quality ofcare and the quality of life you desire should you need long-term careservices in the future.
  8. 8. Nursing Homes8Preparing for Your Retirement: Planning for Health Care Needs in RetirementServicesMedical CareNursing home residents are underthe care of physicians, who visitregularly and are responsible forresidents overall plan of care. Inaddition, every nursing home has aphysician on staff or on call tohandle emergencies.Nursing/Rehabilitative CareAll nursing homes have a staff ofregistered and/or practical nurseswho provide daily medical care. Inaddition, therapy services areprovided according to a residentsneeds and plan of care.Personal CareNursing aides or assistants providehelp with activities such as bathing,dressing, eating, walking, etc.Residential CareNursing homes generally provide avariety of programs to address aresidents social and spiritual needs.continued on next slide
  9. 9. Nursing Homes9Preparing for Your Retirement: Planning for Health Care Needs in RetirementSelecting a Nursing HomeIn addition to doctors and hospital staff, you can ask friends or neighbors who have hadexperience with nursing homes for their recommendations.Other resources include: 1) Nursing Home Compare, an online resource that provides informationabout the past performance of every Medicare and Medicaid certified nursing home in the U.S.,located at:, 2) State nursing home inspectionreports (usually available online).Once youve narrowed down your list, visit each facility (several times if possible) and visit withboth staff and residents. Be sure to ask questions about staffing, services, activities, meals, etc.Cost The cost of a nursing home varies, based on geographic location, the facilitiesthemselves and the level of care needed.According to the 2012 MetLife Market Survey of Nursing Home, Assisted Living, Adult DayServices, and Home Care Costs, the national average daily rate in 2012 for a private room in anursing home was $248 ($90,520 annually) and $222 for a semi-private room ($81,030 annually).
  10. 10. Assisted Living Facilities10Preparing for Your Retirement: Planning for Health Care Needs in RetirementServicesThree meals a day in a group dining areaMedication management or assistancePersonal care servicesLaundry and housekeeping servicesAssisted living is designed to providea range of long-term care servicesbased on the residents uniquephysical and social needs.continued on next slide24-hour supervisionRecreational, exercise and spiritualactivitiesTransportation arrangementsServices available may include:Assisted living accommodations andservices can vary greatly from onefacility to another.It is important, however, to rememberthat assisted living facilities function asa bridge between living at home andliving in a nursing home…They do not typically provide the levelof medical services found in a nursinghome or hospital.
  11. 11. Assisted Living Facilities11Preparing for Your Retirement: Planning for Health Care Needs in RetirementSelecting An Assisted Living FacilityOnce youve narrowed down your list, visit each facility (several times if possible) and visit withboth staff and residents. Be sure to ask questions about staffing, services, activities, meals, etc.Your doctor, family and friends may be familiar with local assisted living facilities. Another sourceof information is the National Center for Assisted Living ( The cost of an assisted living facility varies, based on geographic location, theaccommodations and the types of services provided.According to the 2012 MetLife Market Survey of Nursing Home, Assisted Living, Adult DayServices, and Home Care Costs, the national average rate was $3,550 per month ($42,600annually) in 2012.There may also be an entrance fee, as well other costs for services not provided in the basicmonthly fee. For example, some assisted living communities provide dementia care services, butthe average additional cost is $1,257 monthly, according to the MetLife survey.
  12. 12. Continuing Care Retirement Communities12Preparing for Your Retirement: Planning for Health Care Needs in RetirementCCRC housing choices range fromindependent living in apartments,townhouses or homes to assistedliving units and nursing homeaccommodations, with servicesappropriate for each type ofhousing also provided.A continuing care retirement community (CCRC) is aresidential community that you select for theremainder of your life.By providing a range of services and living situationsbased on a residents changing needs over time, a CCRCis best suited for someone who wants the security ofbeing cared for in the same community throughout theaging process.continued on next slideSelecting a Continuing Care Retirement CommunityEntering a CCRC may require that you sign a life-carecontract, making this a lifetime commitment. CCRCshave different policies about refunding entrance fees toresidents or their estates if they leave or die.In addition, depending on the nature of the contract,substantial tax deductions may be available.You should seek legal and taxadvice before signing a CCRCcontract.
  13. 13. Continuing Care Retirement Communities13Preparing for Your Retirement: Planning for Health Care Needs in RetirementCost A CCRC is quite expensive but, in return, you know that you will have theappropriate kind of housing and care for the rest of your life.Some non-profit agencies, such as religious organizations, fraternal orders andethnic groups, operate continuing care retirement communities.To a certain degree, the cost of a CCRC depends on whether the contract yousign provides unlimited health and long-term nursing care services, a specifiedamount of these services, or whether you pay for health and long-term nursingcare services only as you need them.CCRC entrance fees can range from $20,000 to $500,000 or more, depending on whether you ownor rent your housing unit, the size and location of the residence and the type of service planselected. There are also monthly maintenance fees that can range from $500 to $4,000 or moreeach month.
  14. 14. Home Health Care Services14Preparing for Your Retirement: Planning for Health Care Needs in RetirementServicesHomemaking, includinghousekeeping and shopping.Personal care, includingassistance with bathing,dressing, exercise, etc.Transportation and safetyneeds (such as a dailytelephone check).Health care, includingnursing, physical andrehabilitative therapy,medication assistance andmedical equipment.Home health care services aredesigned to help you retain ameasure of independence, whilereceiving the care you need inyour own home.Available services include:continued on next slideMeal planning, preparationand delivery.
  15. 15. Home Health Care Services15Preparing for Your Retirement: Planning for Health Care Needs in RetirementSelecting HomeHealth Care ServicesHome health care can generally be arranged throughhospitals, home health care agencies and public health departmentsand, depending on your needs, includes services provided bynurses, therapists and/or home health aides.Ask friends, family members and neighbors if they have experiencewith any home health care providers. Your doctors office may alsobe able to assist you in locating home health care services.Cost The cost for home health care services will vary depending on where you liveand the type of home health services you need.According to the 2012 MetLife Market Survey of Nursing Home, Assisted Living, Adult DayServices, and Home Care Costs, the national average hourly rate in 2012 for a home health aidewas $21.Services provided by nurses and therapists will, of course, be more expensive. The nationalaverage daily rate for adult day services was $70.
  16. 16. Advance Directives16Preparing for Your Retirement: Planning for Health Care Needs in RetirementAdvance Directives are a way to "have your say"about the type of care you receive (or dont receive)in the event you suffer a catastrophic medicalevent, such as a stroke or an accident, that leaves youunable to communicate your wishes.Every adult should plan ahead bycompleting an Advance Directive thatspecifies his or her personalpreferences in regard to acceptableand unacceptable medical treatments.Living WillMedicalPower ofAttorneyThere are two types of Advance Directives:A Living Will states your preferences regarding the type of medical care you want toreceive (or dont want to receive) if you are incapacitated and cannot communicate.You specify the treatment you want to receive or not receive in different scenarios.Also known as a durable power of attorney for health care or a health care proxy, aMedical Power of Attorney names another person, such as your spouse, daughter orson, to make medical decisions for you if you are no longer able to make medicaldecisions for yourself, or you are unable to communicate your preferences. Note thata Medical Power of Attorney is not the same as a Power of Attorney, which givesanother person the authority to act on your behalf on matters you specify, such ashandling your financial affairs.continued on next slide
  17. 17. Advance Directives17Preparing for Your Retirement: Planning for Health Care Needs in RetirementImportant Points to RememberEach state regulates Advance Directives differently. As a result, you may wishto involve an attorney in the preparation of your Advance Directive.You can modify, update or cancel an Advance Directive at any time, inaccordance with state law.If you spend a good deal of time in several states, you may want to have anAdvance Directive for each state.Make sure that the person you name to act for you - your health care proxy -has current copies of your Advance Directive.Give a copy of your Advance Directive to your physician and, if appropriate,your long-term care facility.
  18. 18. Paying for Health Care in Retirement18Preparing for Your Retirement: Planning for Health Care Needs in RetirementIt would be nice to believe that health care costincreases were a temporary phenomenon.Unfortunately, thats not the case…the cost of medicalcare has outpaced inflation for the past 20 years andpredictions are that medical and long-term care costsmay continue to escalate as much as 10% to 15% peryear into the future.The decisions we make as to how and where we live inretirement are unique to each individual or couple. Theoptions open to us, however, are frequently determinedby our financial resources…our ability to pay.This review of the various ways to pay for health andlong-term care costs during retirement is offered in thehope that it will be of assistance to you as you makedecisions regarding your retirement plans.Plan ahead! It wasnt raining when Noah built the ark.The options available to pay formedical and long-term care costs inretirement include the following:Retiree Health Insurance PlansMedicare and "Medigap"InsuranceMedicaidLong-Term Care InsurancePersonal SavingsHome EquityGoing Back to Work
  19. 19. Retiree Health Insurance Plans19Preparing for Your Retirement: Planning for Health Care Needs in RetirementReview your employers health insurance program to understand what health carebenefits may be available to you after retirement.If your company provides retiree health care benefits, make sure you know how muchof the premium you will be required to pay, as well as deductible and co-paymentrequirements.continued on next slidecompanies have the right each year toincrease the health care premiums and/orco-payments and deductibles paid byretirees, or even to discontinue retireehealth care coverage altogether.It’s also important to understand thatRetiree health insurance plans are generally designed to coordinate with Medicarebenefits.
  20. 20. Retiree Health Insurance Plans20Preparing for Your Retirement: Planning for Health Care Needs in RetirementAccording to AARP,“This means that retirees may lose their retiree health benefits and be left with no means tochallenge that action.It would also mean that employers could eliminate health coverage for retirees over age 65while maintaining generous benefits to retirees under 65.Employer-provided retiree health benefits are critical for millions of older Americans becausethey usually are more extensive than the benefits provided by Medicare.The Court’s action clears the way for employers to discriminate by reducing or terminatingbenefits for older retirees simply because they’ve turned 65 years old.”In 2004, the Equal Employment Opportunity Commission (EEOC) issued a regulation permittingemployers to target Medicare-eligible retirees for health insurance reductions or eliminations.While AARP filed a lawsuit, a federal appeals court ultimately upheld the EEOC rule and the U.S.Supreme Court declined to take up the case, allowing the EEOC regulation to stand.continued on next slide
  21. 21. Retiree Health Insurance Plans21Preparing for Your Retirement: Planning for Health Care Needs in RetirementEven if your employer currently provides retiree health care benefits, thereis no guarantee those benefits will be available when you retire or willcontinue for the duration of your retirement.Some companies are requiring that retirees pay a higher share of the premiums to coverthemselves, their spouses and any dependents.Other companies are implementing higher co-payments and/or deductibles.Still other companies are discontinuing retiree health insurance plans altogether.CAUTION:Escalating costs of medical care“Baby Boom effect” (a large "bubble" of people whoare beginning to make a substantial contribution tothe size of the aging populationEmployers are rethinkingtheir retireehealth care plans
  22. 22. Medicare and “Medigap” Insurance22Preparing for Your Retirement: Planning for Health Care Needs in RetirementMedicares hospital insurance is free if you or a spouse paid Medicare taxes duringyour working years.Part A covers some of the costs of inpatient hospital care and, on a very limitedbasis, pays for care in a skilled nursing facility or through home health care.continued on next slideMedicares medical insurance helps cover the costs of doctors‘ services andoutpatient hospital care. You must sign up for Part B and pay the monthly premium(which is usually deducted from your Social Security check).In 2013, the standard Part B Medicare premium is $104.90 per month. Individualswith incomes over $85,000 and married couples filing jointly with incomes over$170,000, however, pay a higher Part B monthly premium ranging from $146.90 to$335.70.Most people qualify for Medicare insurance when they reach age 65. There are four parts to theMedicare insurance program:PartAPartB
  23. 23. Medicare and “Medigap” Insurance23Preparing for Your Retirement: Planning for Health Care Needs in RetirementThe Medicare Advantage Plan provides benefits through a private insurer and isdesigned to replace Medicare Parts A and B.There are various types of Medicare Advantage Plans, which, in addition to providingthe hospital and doctor benefits of Parts A and B, may offer additional benefits.The premium for these plans is generally less expensive than the Medicare Part Bpremium plus the cost of "Medigap" insurance (reviewed below), but there are alsoplan network, co-payment and deductible requirements to take into account.continued on next slideMedicares Prescription Drug Plan is available for an additional monthly premiumthrough companies that contract with Medicare. If you have Medicare Parts A and B,you can purchase Part D.Alternatively, you can purchase a Medicare Advantage Plan with a prescription drugbenefit under Part C of Medicare. Part D is designed to pay some, but not all, of yourprescription drug costs.PartCPartD
  24. 24. Medicare and “Medigap” Insurance24Preparing for Your Retirement: Planning for Health Care Needs in RetirementPeople enrolled in Medicare Parts A and B find that, even though a lot of their medical care iscovered, they can still face considerable out-of-pocket costs.In order to pay the costs not covered by Medicare, many people elect to purchase a Medicaresupplement plan from a private insurer to fill in many of the gaps in Medicare Part A and Bcoverage.These "Medigap" plans can be fairly expensive. They do, however, limit out-of-pocket costs forhealth care.As this brief review illustrates, there are a variety of ways you can protect yourself from the costsof medical care during retirement.One fact, however, is evident… there is no "free lunch." You will have costsrelated to medical care and the likelihood is that those costs will continue toincrease each year.
  25. 25. Medicaid25Preparing for Your Retirement: Planning for Health Care Needs in Retirementcontinued on next slideMedicaid is a joint Federal and state program that helps with medical costs for somepeople with low incomes and limited assets. Medicaid programs vary from state tostate, but most health care costs are covered for those who qualify for both Medicareand Medicaid.Certain services must be included by the states in order to receivefederal Medicaid funds.For example, people who qualify for Medicaid may get coverage for costs, such as nursing homecare and outpatient prescription drugs, that are not covered by Medicare.Nursing home care must take place in a Medicaid-approved facility in order to qualify forMedicaid reimbursement. Other services are optional and may or may not be included on astate-by-state basis.
  26. 26. Medicaid26Preparing for Your Retirement: Planning for Health Care Needs in RetirementTo qualify for Medicaid, federal poverty guidelines for income and assets must be met. Inaddition, there are state requirements for Medicaid eligibility. More information about Medicaidis available from a local Medicaid office or Department of Social Services.Medicaid is essentially a safety net for those who didnt adequately plan for theirfinancial needs in retirement, or who encountered unexpectedly large expenses thatdepleted their financial resources.While Medicaid recipients must have low incomes and few financial assets in order toqualify, their homes and cars are not included in determining Medicaid eligibility.There is, however, a federal estate-recovery law that requires each state to recoup assets fromthe estates of Medicaid recipients. As a result, children set to inherit the family home may findthat, instead, the home must be sold and the proceeds used to pay for the care their parentsreceived.
  27. 27. Long-Term Care Insurance27Preparing for Your Retirement: Planning for Health Care Needs in RetirementHealth insurance does not pay for long-term care services in a nursing home orassisted living facility, nor does Medicare, as explained by the Social SecurityAdministration:“About Social Security and Medicare... Social Security pays retirement, disability, familyand survivors benefits. Medicare, a separate program run by the Centers for Medicare &Medicaid Services, helps pay for inpatient hospital care, nursing care, doctors’fees, drugs, and other medical services and supplies to people age 65 and older, as well asto people who have been receiving Social Security disability benefits for two years ormore. Medicare does not pay for long-term care, so you may want to consider optionsfor private insurance (emphasis added).”continued on next slide
  28. 28. Long-Term Care Insurance28Preparing for Your Retirement: Planning for Health Care Needs in Retirementbut only if stringent conditions are met:Medicare will pay for up to 100 days in a skillednursing facility, but only after a 3-day minimuminpatient hospital stay for a related illness orinjury.Medicare will pay all of the costs for the first 20days, but you must pay a co-payment amountfor days 21 – 100 during each benefit period.Medicare doesn’t cover long-term care orcustodial care in a skilled nursing facility.The end result is that many people who neednursing home care are forced to spend downtheir assets in order to meet Federal povertyguidelines and qualify for Medicaid.Under very limited circumstances, Medicarewill pay for a nursing home stay,Long-term care insurance also helps protectyour personal assets, preserving them foryour use or as an inheritance for yourfamily.Long-term care insurance is purchased fromprivate insurance companies and typicallyhelps pay the costs of a nursing home stay.Many policies also cover assisted living andhome health care costs.Long-term care insurance can put you incontrol, preserving your dignity andallowing you to select the type of facilityand setting in which you want to receivelong-term care services, if needed.continued on next slide
  29. 29. Long-Term Care Insurance29Preparing for Your Retirement: Planning for Health Care Needs in RetirementThe cost of a long-term care insurance policy depends on factors such as your age,health, the waiting period until benefits begin, the level of benefits you purchase andfor how long benefits are payable.Check with your employer… your company may offer long-term care insurance as a voluntary orsupplemental employee benefit!Generally speaking, the older you are when you buy a long-term care policy, the higher thepremiums will be since the chances of needing long-term care increase with age.In addition, premiums generally remain the same each year, unless they are increased for an entireclass of policyholders at once.This means that the younger you are when purchasing long-term care insurance, the lower yourannual premium cost will be.Suggestion:
  30. 30. Personal Savings30Preparing for Your Retirement: Planning for Health Care Needs in RetirementReview your retirement plan tomake sure that it adequately takesinto account the potential costs ofmedical care and long-term care inretirement.As part of this assessment, you should realistically evaluate your health, as well as your familyshealth history.If you currently have a health problem, be sure to factor those costs into your retirement savingsplan. If certain health problems, such as heart disease or Alzheimers disease, run in your family,plan accordingly in regard to your possible health care needs in retirement.continued on next slideIf you find a shortfall, you maywant to increase your personalsavings now in order to havesufficient funds available after youretire.
  31. 31. Personal Savings31Preparing for Your Retirement: Planning for Health Care Needs in RetirementSome experts suggest setting up a separate fund or account specifically to pay for health careneeds in retirement. This approach adds focus to your plan and better enables you to assess yourprogress.If you qualify, consider starting a Health Savings Account (HSA). The amount you contribute to anHSA, up to specified limits, is tax-deductible.A portion of your contribution is used to purchase a high-deductible health insurance plan. Thebalance of your contribution grows tax-free in your HSA account, where it is available to pay forhealth care costs not covered by insurance.One advantage of an HSA is that the money in the plan remains available for your use duringretirement… whether or not it is needed to pay for health care costs.The sooner you commit to a disciplined savings plan, the more likely it is that you will havesufficient financial resources to enjoy the lifestyle you want in retirement.Suggestion:
  32. 32. Home Equity32Preparing for Your Retirement: Planning for Health Care Needs in RetirementSell the HomeIf the time comes when the decision to move into a nursing home, assisted living facility orcontinuing care retirement community is made, selling your home may make sense. The equity inyour home can then be used to help finance your long-term care living accommodations. This, ofcourse, assumes that if married, both of you will be moving…not always the case when nursinghome care is needed.Many retired people have built up substantial equity intheir homes. There are a variety of ways to tap that equityif needed to pay for health care costs in retirement:continued on next slideHome Equity Loan/ Line of CreditIf your retirement income isnt sufficient to cover your expenses, you can tap into your homeequity through a home equity loan or line of credit. A home equity loan is generally used to payfor a large, one-time expense. A home equity line of credit, on the other hand, is available for useon an as-needed basis. Keep in mind, however, that when you borrow against your home equitythrough a loan or line of credit, that loan plus interest must be repaid.
  33. 33. Home Equity33Preparing for Your Retirement: Planning for Health Care Needs in RetirementReverse MortgageIf you wish to stay in your home during retirement, but need to supplement your retirementincome to pay for health care needs (or any other needs you have), a reverse mortgage may be theanswer.A reverse mortgage is a loan against the value of your home that does not have to be paid back foras long as you live in the home. A reverse mortgage can be paid to you in a single lump sum, as aregular monthly income, or at times and in amounts of your choosing.While reverse mortgages typically require no repayment while you are living in your home, theymust be repaid in full, including interest and any other charges, at the earliest of the death of thelast living borrower (meaning that a surviving spouse may continue to live in the home withoutrepaying the reverse mortgage), the sale of the home, or when the last living borrower movespermanently away from the home, such as to an assisted living facility or nursing home.
  34. 34. Going Back to Work34Preparing for Your Retirement: Planning for Health Care Needs in RetirementDuring their working years, some people say they dont plan to retire…ever. Instead, they plan tocontinue indefinitely in their current careers or, alternatively, get a part-time job. Other peopleplan to retire, but if financial needs arise, return to work on a full-time or part-time basis.These intentions are well and good. When it comes to planning for health care needs as we age,however, its time for a reality check.Its fine to state these intentions today, when our health is good, but how many 70+-year-oldpeople with health problems really want to be out looking for a job?In reality, planning to return to work in order to pay for health care needs during retirement isnt somuch a plan as it is a hope…a hope that we wont face substantial health care costs as we age.
  35. 35. Paying for Health Care in Retirement35Preparing for Your Retirement: Planning for Health Care Needs in RetirementDont wait until it rains to start building your ark…Plan ahead while the choices are still yours to make!