Women face unique challenges as they plan for long-term care, given their longer life expectancy and higher likelihood of living alone in their later years. A longer life expectancy increases the odds of needing long-term care. An AARP study found more than 70% of nursing home residents were women, says Kiplinger’s article “A Woman’s Guide to Long-Term Care.”
Living longer also increases the chances of living it alone because women often outlive a spouse. According to the Joint Center for Housing Studies of Harvard University, “In 2018, women comprised 74% of solo households age 80 and over.”
Understanding these challenges and implementing proactive strategies is essential for securing a comfortable and financially stable retirement. Drawing insights from recent articles by Kiplinger and the Population Reference Bureau, let’s explore key considerations for women in planning for long-term care.
- Longer Life Expectancy and Retirement Planning: Women typically live about six years longer than men, according to the Population Reference Bureau. While a longer life may seem desirable, it also increases the likelihood of needing long-term care. Therefore, women must factor in the potential costs and duration of care when planning for retirement.
- Living Alone and Outliving Spouses: As women age, there’s a significant chance of living alone and outliving spouses. Kiplinger’s article highlights that women comprise nearly three-quarters of solo households aged 80 and over. Planning for long-term care becomes crucial in ensuring financial security and independence during these later stages of life.
- Financial Implications of Long-Term Care: Long-term care can be financially burdensome, with costs averaging over $8,500 per month for a private nursing home room in the Dallas, Texas area. Whether it’s assisted living, memory care, or in-home care, expenses can escalate quickly, especially considering the average duration of care for women, which is almost 1.5 years. If a woman has a healthy retirement income and savings, she may want to self-insure her future long-term care expenses. This can mean setting up a designated long-term care investment account solely to be used for future long-term care expenses. If a woman has a modest degree of retirement savings, she may want to lower her current expenses to save more for the future. She may also want to look at long-term care insurance.
- Medicare. Many people mistakenly think that Medicare will cover long-term nursing home care. Medicare has only limited benefits for short term recovery after a hospitalization. It does not pay for long-term care. Another mistake is not re-evaluating your Medicare plan(s) each year during open enrollment. Providers move in and out of networks and drug plans change the prescription medications they cover. Choosing the right plan can save hundreds of dollars a month.
- Medicaid. In Texas, Medicaid pays for long-term care in a Nursing Home, when strict medical and financial qualifications are met. Married couples have an advantage in meeting the financial qualifications for Nursing Home Medicaid since much of the couple’s assets can be protected for the “healthy” spouse. This planning requires the assistance of an experienced Elder Law Attorney. Medicaid coverage in Texas for Assisted Living or in-home care is very limited, often with waiting lists of over a year.
- Retirement Projections and Long-Term Care Planning: Women should conduct thorough retirement projections, considering various scenarios, including the potential need for long-term care. Planning ahead, reducing current expenses to save more, and exploring long-term care insurance options are essential steps in preparing for future care needs.
- Social Security Optimization: Delaying Social Security benefits until age 70 can increase monthly benefits, which can be beneficial for covering long-term care costs. Coordinating claiming strategies with a higher-earning spouse can maximize benefits and provide financial security in later years.
- Estate Planning: Establishing comprehensive estate planning documents, such as a Durable Financial Power of Attorney, is essential for ensuring that trusted individuals can manage financial affairs, including long-term care expenses, in the event of incapacity.
Contact our office to set your estate in order so you are prepared to handle rising long-term care costs. By planning ahead, you can be prepared to face the challenges of aging.
Reference: Kiplinger (July 11, 2021) “A Woman’s Guide to Long-Term Care”
