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The Genworth 2015 Cost of Care Survey: What You Need to Know

Posted by Katie Krause on Mar 11, 2016 7:19:00 AM

The-Genworth-2015-Cost-of-Care-Survey-What-You-Need-to-Know.jpgThe Genworth Cost of Care Survey has been the national standard for projecting elderly long-term care costs since its first release in 2004. It’s a vital tool for projecting future care expenses, and this is the biggest surprise it holds this year: eight out of 10 people underestimate the costs of senior care, and almost one-third will be stunned to find that home health care costs 10 times what they expected!

View the Updated Genworth 2018 Cost of Care Survey

Genworth projects the median costs of elder care depending on the type of care required. Here are the projections on an annual basis:

Home Health Aide Services ($20 per hour, 40 hours per week)

$41,600

Adult Day Health Care (ADC) ($69 per day)

$25,185

Assisted Living Facility (ALF) ($3,600 per month)

$43,200

Nursing Home Care ($220 per day, semi-private room)

$80,300

Why is this important to you?

First of all, the study states that over two-thirds of those over the age of 65 will need some type of long-term care. Secondly, most people tend to underestimate what that care will cost.

Knowing these costs will most likely be in your future gives you time to make an advance plan for long-term care. There are basically four ways to pay for care: out of pocket, by relying on family and friends, through Medicare or by using long-term care insurance. You can also use a combination of sources, such as retirement accounts and reverse mortgages added to income from family.

It’s also important to realize these statistics are median, meaning they may be higher or lower for you depending on the state you live in when you’re ready for long-term care. They’re also projections, meaning the costs may go up as the national economy fluctuates.

You’ll also notice that the Genworth survey only addresses the cost of care, and there are other expenses that arise as one ages. Prescription drugs, special equipment and inflation will all add to the cost of living and will make a dent on your disposable income.

In the long run, it pays to be diligent. Investigate the costs in your own area, and make an appointment with your financial advisor so you have all the details on how much money may be available to you both now and in the future. Find out where you stand now and whether you have any options that will make it easier to pay for long-term care if and when you need it.

If your ultimate dream is to live in a retirement community or on an assisted living campus, visit the place you have in mind and talk to their finance office. Find out what levels of care the facility offers and the costs involved at each level, and formulate a long-term plan so you can face retirement and the possibility of long-term care on your own terms.

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Tags: Financial Planning