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Long-Term Care Considerations for Women

McNair Dallas Law

Beneficiary Designation

Who needs long-term care insurance … and who might be able to do without it?

Women face some unique long-term care challenges as they get older. The Population Reference Bureau, a Washington based think tank, says women live about seven years longer than men. Living longer means planning for a longer retirement. While that may sound nice, a longer retirement increases the chances of needing long-term care.

Kiplinger’s recent article entitled “A Woman’s Guide to Long-Term Care” explains that living longer also increases the chances of going it alone and outliving your spouse. According to the Joint Center for Housing Studies of Harvard University, in 2018 women made up nearly three-quarters (74%) of solo households age 80 and over. Thus, women should consider how to plan for long-term care.

Increasing Costs. Long-term care is costly. For example, the average private room at a long-term care facility averages more than $7,000 per year in the Dallas, Texas area.  Assisted Living, Memory Care and In-Home Care can be just as expensive. Multiply these numbers by 1.44 years, which is the average duration of care for women. These numbers can get big fast.

Medicare and Medicaid. Medicare can cover rehabilitation or recovery care in a skilled nursing community after a hospitalization. Medicare does not pay for long-term care. Medicaid pays for long-term care in a nursing home, but the applicant must demonstrate an ongoing medical need, and meet specific financial requirements. Qualifying for nursing home Medicaid can be very complicated, so its best to work with an experienced Elder Law attorney to avoid penalties and delays.

Make Some Retirement Projections. First, consider an ideal scenario where perhaps both spouses live long happy lives, and no long-term care is needed. Then, ask yourself “what-if” questions, such as What if my spouse passes early and how does that affect retirement? What if I need need long-term dementia care?

Planning for Long-Term Care. If you have a modest degree of retirement savings, you may want to decrease current expenses to save more for the future. You may also want to look into long-term care insurance.  Talk with a Financial Professional with a fiduciary responsibility to advise what is in your best interest.

Waiting to Take Social Security. Women can also consider waiting to claim Social Security until age 70. Since women tend to live longer, the extra benefits accrued by waiting can help with long-term care. Women with a higher-earning spouse may want to encourage the higher-earning spouse to delay until age 70, if that makes sense. When the higher-earning spouse dies, the surviving spouse can step into the higher benefit. The average break-even age is generally around age 77-83 for Social Security. If an individual can live longer than 83, the more dollars and sense it makes to delay claiming benefits until age 70.

Estate Planning. Having the right estate planning documents is a must. All adults should appoint an Agent to act on their behalf if they become incapacitated with a Durable Financial Power of Attorney.  This legal document gives a trusted person the authority to write checks and send money to pay for long-term care.

Reference: Kiplinger (July 11, 2021) “A Woman’s Guide to Long-Term Care”

Photo by BBH Singapore on Unsplash

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