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We are 73 and 68 and still working. No insurance except Medicare. We have very little family, though I would not want to depend on them for care. My husband has one child and she has 3 children living at home. He would be too proud to live with her. I have 3 children and only one who could be in a position to care for me should I need care. What do most people do to afford care when the time comes?

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My parents sold their home for only $100K, cashed out their 2 stocks, and applied for Aid & Attendance benefits thru the VA; my father was active duty military in WWII. When I combine their SSI, VA Aid & Attendance benefits, and life savings, that is how their stay in Assisted Living is financed. My dad died in 2015, but my mother is still alive at 94 and in Memory Care at $6500 a month without lots of extras including doctor bills, incontinence briefs, meds................to the tune of another $600-800 a month. She will 'afford' it until her life savings runs out, at which time I will apply for Medicaid to finance her stay in Skilled Nursing.

When my DH and get old, if we DO get old, we will not be moving in with any of our 7 children; we would never burden them with our care. We will sell our home and live off our life savings, too.
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Reply to lealonnie1
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Sadly, many can't afford the high cost of LTC. Those middle class Americans who can afford it soon run out of money and must apply for Medicaid. If you don't plan for your LTC years far far ahead, the average American will never save enough to afford the high cost of LTC plus all the other medical necessities he/she will most likely need plus the normal living expenses of the community spouse. LTC insurance is out of the question at your age. Many companies have abandoned the LTC market because they underestimated the cost of care. For the few that still do offer it, you'll pay an exorbitant premium. My wife and I were fortunate. We each purchased an LTC policy in 2006. For the 15 months she was in MC, I “only” paid $27k for the $90k we were billed. I still pay less than $150 a month in premium for the same benefits.

I don't think a reverse mortgage is the answer either. The initial application is very expensive and once it's approved becomes an enormous debt that has to be repaid when the house is sold. If you happen to sell when the housing market tanks, you may wind up paying the balance out of your own pocket. It might be better to sell the house now, and use the proceeds to move into a continuing care community together. CCCs offer independent living, assisted living and memory care in the same complex. If either of you are veterans, the VA can help offset the cost of care also.

So there aren't a lot of options to fund LTC but there are some.

If you only have Medicare with no medicare supplement insurance, I would look into changing to a Medicare Advantage plan which is offered by independent healthcare companies. You do not have to qualify for the plan. An MA plan provides more benefits than Medicare and often at a $0 premium cost, but certainly less than a Medicare supplement plan. These plans are either HMOs or PPOs. Neither Medicare nor an MA plan pay for LTC.
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Reply to sjplegacy
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Traditional Medicare is often not enough if an illness strikes. I am 76 still working but when I was 68 I got a supplemental policy. In 2013 I was hospitalized with pneumonia and it was a relief to know that the bill was going to be covered by Medicare and my supplement! Yes, the supplement is expensive (and gets more expensive with each year - I pay about 2500 per year but the policy needs to meet your perceived and anticipated needs so everyone has to research for themselves - but it can be worth it if you can afford it. A lot of the Advantage programs are much cheaper and offer additional benefits. They work really well while you are healthy but in my experience can sometimes be a little weak when you are super sick ---- like when you are getting rehab after a hospital stay; they have been known to sometimes authorize significantly shorter stays.

But I sense what you are talking about is living situations rather than health. If you have a home you can always sell it and use the proceeds to move into an independent senior residence as someone suggested earlier. Now lot's of us want to leave the house for the kids as an inheritance but in today's world, unless you are in that 1% of die relatively young, that's not going to happen; kids need to erase the world inheritance from their vocabulary. And you need to remember not to be too generous with the house sold proceeds in terms of giving it to kids and grand kids for college educations because you could be penalized for gifts if you ever need Medicaid.
And now we come to it. None of us in spite of good genes and good healthcare knows what lies on the road ahead. You can move into independent living or even assisted living and in the flash your health takes a downturn and you need skilled nursing or long term care. Medicare does not pay for long term custodial care. Medicaid (financed by the federal government but administered by the state) is the largest payer of long term care. Since the states are responsible for administration it is a little different in each location. In NJ the state takes a 5 year look back - so if you have given away any large sums within that period you can be penalized and denied medicaid for a period of time. This can be devastating when the hospital needs to discharge you or your family can't maintain your health in your own home. And an assisted living not not be able to handle your health needs - they are only an "assist". And assisted livings have very few Medicaid approved beds.

If you don't have a house to sell, downsize if possible and be prepared to apply for Medicaid if you don't have veterans benefits when you need long term care.
Good luck..... when they say getting old is hard.... they aren't lying.
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Reply to geddyupgo
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$5000 is at the lower end.
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Reply to Bridger46164
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A PS from me as well: IF you choose expensive LTC do know that often it is very limited. The fact you HAVE the coverage precludes your getting any governmental aid, but that coverage is often no where near enough to cover a facility. Moreover some policies limit things in odd ways, so this is where ALL the fine print MUST be read. Some won't cover if your facility doesn't have a full time RN coverage. Guess what, NO facility does unless it is SNF.
If you plan on reverse mortgage that is another place to take care. Some offer no coverage if you are out of your home, and forced sale or loan repaid. It worked well for my MIL and allowed her to stay in her Carefree, AZ home until she died, with what care she required. But it often doesn't work for someone with dementia who must go into care.
Just some things to think about.
Love TekkieChikk's ideas.
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Reply to AlvaDeer
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Also--cost of LTC is so different state by state. Dh and I have saved over the 45 years we've been married and thought our 'goal' was more than sufficient.

It's 'sufficient' but by no means 'high level living'.

Our financial planner said that in Utah we can plan on the cost of a ALF is slightly less than $5k a month. I would have guessed more like $10K. He'd know as his own mom is in a lovely place with her own apt, help with dressing and such, and she pays about $5K.

HOWEVER--I know other states can cost MUCH more.
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Reply to Midkid58
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My husband and I have worked our entire lives and saved for our old age... we don't have children but even if we did I like to think I wouldn't want to rely on them for taking care of me. And even the amount we've saved, which seems like a fortune, it will easily be eaten up if we do need to go into a facility and have someone care for us.

LTC insurance can be very expensive and the premiums can increase dramatically during the course of the policy so don't think you are necessarily 'locked in' to the initial premium... read the fine print, that's what a financial adviser told me 3 years ago when I checked into it. And once you open a policy you have to pay it in full... so if the company decides to double your premium and you can't pay it, you may not get anything of what you've already paid back.

If I were in your situation I would sell the house and consider moving into a 55+ apartment. Look for one where rent is income-based. My in-laws lived in a great apartment building like this... it was not a care facility, just a regular apartment building for seniors, so they were still independent, which was important to my MIL especially. The apartment was small but well maintained and they had bingo and other activities, birthday parties, etc. which was great because my FIL surrendered his license eventually and didn't drive anymore. It took a bit of adjustment since they moved from their own home to an apartment, but they did adjust and really liked it and had companionship with other people their own age. The building was secured at all times, too, so they felt safe.

Are either of you veterans? If you are the VA can help. When my FIL eventually went to an independent living facility after his wife died the VA paid $1,991/month toward his rent and he paid $1,319 out of pocket. The LTC facility was local and while it was more than 100 years old and a bit run down, he had his own very large private room with a bathroom and was very well cared for by the staff... he was independent but they helped him bathe and managed his medications and oxygen, and he loved all the activities. A doctor came to the facility for regular wellness checks and they provided transport to other appointments. Medicare and his supplement paid for all of those health costs, just as they did when he was living on his own. If he would have needed skilled nursing (he passed away before that point) then he would have gone on Medicaid because he had no savings, just a small pension and social security totaling about $1800/month.

I hope you find some help and hope, these forums are so wonderful for providing both.
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Reply to TekkieChikk
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To be able to afford long term care of the type you would like is a lifelong battle to carefully save for age. It requires enormous deferred gratification abilities.
Money put away when you are quite young accumulates more interest than one believes, but when you we young you often need that money for family, for homes and vehicles.
Long term care insurance is to my mind no substitute for savings. It is very costly and its cost goes up sharply with age.
For some a reverse mortgage helps them if they have a paid for home and they can make it with combining that with savings.
Most end up needing care. To my mind it is very bad to take care or money from our kids who are facing this same need to save for their own current lives and old age.
Given most of us don't fall into the 1%, this means many end on medicaid, financial help from the federal and state government programs.
My brother as an example was a lucky and smart man. Given we were taught saving at our parent's knees he always saved hard, even down to coupon clipping. No new cars, only used cars. When in the Army he sent most money home for our Mom to put away, and still had enough money left to be known in his platoon as "the banker" who could give them interest free loans to payday; they were in town having fun a lot of nights. He loved old homes that needed help, brought them back to their original beauty, resold at a profit. Lived in lucky times. My bro was a waiter but lived in a time he always had a good job and always could get work. He loved pottery. Would buy for 85 cents at a flea market and sell for a few hundred a year later. Would kid and say, when someone asked what he did for a living "I sell stuff off the back of my truck". No children, so that cost didn't exist for him. When he moved to ALF at age 83 he still had the same pots/ iron pan he had as a young man when he started out. The things he loved to do in life, working on a building, swimming, gardens, walks, reading, cost nothing, so he saved. That was how he lived, (I used to tease him "you live like a Monk") but he had saved nearly a million dollars, so he could never have outlived his money.
How one gets to old age with money? Unless they are part of the lucky 1% who get money passed down to them, it is a long and a slow journey. It starts with no college debt, but with working your way through as I did for my nursing degree. It starts so early. And given that most lives aren't as lucky as my brother was, as I was, most of us end up needing the help of our government in our old age. I lived as a child in a generation where people were typically so careful of money. Had gardens. Canned. Never wasted. One man could support his entire family on his salary; that just doesn't happen any more.
This is such a good question. But sadly when we think to ask it we are already old and terrified of the "too late " thing. I sure do wish you good luck. You are not alone in being terrified of what the future holds. In fact you are in very good company.
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Reply to AlvaDeer
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I think its too late for LTC insurance. At your age it would be very expensive. My question though, is why don't u have a supplimental? Medicare only pays 80% of health costs. If you end up in the hospital that 20% can mount up to a lot of money.

I understand where Burnt is coming from but this is how it is. You save only to have something happen where u need care and the NH takes it all. Doesn't take long either at 10k a month. Would be nicevto leave something to our children but children should not expect it. I have told my daughters we have made investments but they are for our care. Neither one will be able to care for us. Both need to work. I would not live with either of them either.

So, what do you do. Downsize if house is too big. Bank the proceeds and use them only to compensate for shortages in ur incomes. Stay within your income as much as possible. Maybe go to one car if possible. In the end though, if children can't care for you, then u will be looking at Medicaid paying for your care in a LTC facility. My parents worked all their lives. The only reason Mom could afford an AL was the insurance money from Dads death. When that ran out, it was LTC with Medicaid.
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Reply to JoAnn29
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Midkid58 Jan 7, 2021
Yup. Check out the price of LTC in your 60's. Better to simply save that amount than try to get it to pay out.

Mother's LTC insurance, purchased in 1966 and faithfully paid premiums--would net her a whopping $75 a day for LTC after 90 days. Completely useless, really. When OS took her from a ratty rehab facility to a nicer one, OS simply pulled out the AMEX card and said "put the balance on this".
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Take out a long-term care insurance policy. Sure, the premiums are not cheap to pay but it can be worth it. If you and your husband have to go into a nursing home or assisted living, everything you have goes straight to them and you don't get Medicaid paying for it until you have absolutely nothing. $1,600 is what a person can have in assets and be on Medicaid. I think it's great that you and your husband don't just expect your kids to work it out and become your long-term care plan.
My father had to be in a nursing home for seven months before he passed away. This was a man whose work life started when he was a teenager and didn't end in full retirement until he was past 70 years old. He saved all his life. He was careful with his money too. A whole lifetime of work and good financial decisions went up in smoke to a nursing home in a matter of a few months. Then when he had nothing and was a pauper, he was able to go on the state (Medicaid). At the age of 90 he was still in remarkable health, lived independently, was still driving and enjoying his life. He never thought in a million years that he'd ever end up debilitated in a nursing home. But he did. Because of a brief illness he left absolutely nothing to his family but his debts. Take out long-term care insurance and you will spare your kids the burden of having to liquidate everything you've worked for in your life only to have to throw it down the bottomless money hole that is the nursing home racket in America.
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Reply to BurntCaregiver
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Medicaid. It is a mistake to expect or even think your children will provide you a place to live and especially care for you if you should need it. I wouldn't dream of placing my children in that position and would never ask.

They deserve their own lives and that is what I brought them up to do. Care for their own families and enjoy it while they are able.
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