Born between 1946 and 1964, the youngest of the estimated 76.4 million baby boomers are currently 52 and the oldest 70. Today, many soon-to-retire or recently retired baby boomers would likely contend that they are in the prime of their lives. However, in the coming years as members of this generation continue to age, many will experience the varied health and medical events and issues that often come with age.
For baby boomers and their 20, 30 or 40-something-year-old children; it’s important to discuss and plan for long-term care needs today to avoid future stress and financial problems.
Long-term care planning essentials
While many aging baby boomer parents may have an expectation that their children will eventually assume the role of caretaker, this isn’t always possible. Adult children may live a distance from their parent and many are busy parents themselves and have demanding careers.
It’s important, therefore, that baby boomers and their children engage in open, honest and ongoing conversations about the following matters:
- Financial needs – Who will manage a parent’s day-to-day financial affairs and pay a parent’s bills and taxes?
- Transportation needs – What happens if a parent can no longer safely drive? Who will help transport a parent to get groceries or to other important appointments?
- Health care needs – Who will accompany a parent to doctor appointments and help ensure that he or she is taking prescribed medications?
- Personal care needs – Who will help a parent attend to his or her personal care needs or coordinate and hire a professional care provider to fulfill this role?
Where will baby boomers live and how much will it cost?
When it comes to exploring long-term care residential living options, many baby boomers and their family members are shocked to learn of the related costs. Consider these statistics which detail projected long-term care costs for the year 2037, when the youngest baby boomers will be age 73 and the oldest 91:
• In-home health aid – $6,000 per month
• Adult day health care – $2,200 per month
• Assisted living facility – $8,100 per month
• Nursing home– $21,100 per month (semi private room), $30,000 per month (private room)
For even the wealthiest Americans, the costs of long-term residential care are significant and are considered unaffordable for the majority of Maryland residents.
How will baby boomers pay for long-term residential care?
Today, roughly 50 percent of nursing home costs are paid via Medicaid funding with the remaining 50 percent paid by private long-term care insurance and individuals who pay out of pocket. In order to qualify for Medicaid assistance, an individual must meet strict asset eligibility requirements which often exclude individuals who have no other means to pay for long-term residential costs. What’s more, federal regulations place further restrictions on asset and wealth transfers, making it virtually impossible for many to qualify for Medicaid and afford nursing home care.
Questions related to paying for long-term residential care are easy to put off until there is an immediate need. Think about it–if you or your loved needed nursing home care tomorrow, how would you pay the $8,000 monthly bill?
If you are having trouble answering this question, it’s important to consult with an elder law and estate planning attorney. By being proactive and engaging in conversations today to plan for your or a loved one’s future long-term care needs, you can establish a plan that provides for needs and protects your assets.