The elderly population of the U.S. is growing every day, and we are all living longer. In an interview today on CNBC with American Realty, a developer of Real Estate Investment trusts in the Healthcare space, the following statistics were cited.
American's ages 65 and older are growing by over 11,000 a day
American's ages 85 and older are a growing demographic
The growth in these segments is expected to continue for "decades to come"
Couple this with the average assets needed in retirement of $220,000 and you can get an idea of the funds needed and the potential length of time you need to manage those assets.
Assess where your parents or own situation is in relation to where you are today based on these numbers.
In my opinion, $220,000 is not nearly enough when you consider the costs of healthcare and the basic needs of life.
Consider that the current 2014 average Social Security benefits are as follows:
For all workers $1294
For married couples $2111
For Widowed/Widowers $1243
Maximum Earnings to still receive full Social Security Benefit $15,480
As some tough question of your parents and your self.
1. Do I have the income and savings needed to support my self in retirement?
2. Are my Social Security and Retirement Savings or Pensions enough to support our needs now and into the future?
3. What happens if I run out of money and need to go into a Assisted Living Facility or Nursing Home.
4. What assets do my parents have that would need to be liquidated to pay for their care? A home or other real estate can take time to be sold.
The reality is that many will outlive their savings and place the burden of their care on their own children or the government thru Medicaid assistance.
Assisted Living is not covered by Medicaire or Medicaid. Medicaid only covers those who have exhausted all their savings and assets and is generally considered a last resource for the poorest Americans.
The costs of various types of Senior Care can vary greatly.
In Cincinnati, you can find various levels of care and services.
Assisted Living generally starts at $3500 a month and can go as high as $9000 for private rooms in the nicest facilities
Memory Care to include Dementia and Alzheimer's care starts around $6000 and can go well over $11,000.
Nursing Homes and Skilled Care have an average cost around $7000 and with many in excess of $11,000 for the best facilities with Private Rooms
Home Care rates are generally around $20.00 an hour. 24 Hour care in your own home will run over $170,000 a year
Medicare only pays the full cost of skilled nursing home care for 20 days. After that, a co-pay is required and Medicare will only cover up to 100 days of care. Co-pays can start at $105.00 a day and go up to over $170.00 depending on the Medicare plan you have.
When Medicare benefits run out, the Resident would be on the hook for whatever the Private Pay rate charged by the facility is. For a private room, many facilities charge in excess of $100,000 a year.
Medicaid is only available for those who have drained their assets to $1500 or less. To complicate matters, not every facility accepts unlimited Medicaid residents so finding a facility can be troublesome and difficult.
If you have assets, you will need to utilize those to pay for your loved one's care before you are eligible for Medicaid assistance. The State will look back up to 5 years to determine if assets were transferred improperly. If you have transferred assets during this "look-back" period, you can be deemed ineligible for Medicaid benefits for a period of time. That time will depend on the amount transferred and the average cost of care in the state you live.
For example, if you transferred assets 2 years ago of $100,000 and the average cost of care in your state is $5000, you would be deemed ineligible for benefits for 20 months.
So what does all this mean? In the Boy Scouts motto, BE PREPARED
What it costs today is only going to rise over time....that, you can be sure of.
To learn more about the innovative care model being developed by ACFH Development, visit out web site at:
www.angelscarefh.com