Avoid Mistakes When Preparing for Post-Retirement Life

Getting older is complicated. You must plan for retirement, get legal paperwork in place, and prepare for long-term health care. Ignoring these items can complicate an already difficult time for your family.
Updated: April 11th, 2022
Jane Stinson

Contributor

Jane Stinson

The need for long-term health care may come unexpectedly or gradually. Just look at a photograph of yourself from ten years ago - do you dare to look at a picture of yourself from 20 years ago? Aging happens, and we undergo changes in our health, bodies, and mind as we get older. The consequences of getting older can affect our families and finances. 

Regardless of your current health, preparing ahead of time can give you peace of mind when it comes to the need for long-term health care. Some people think if they are in good health now, they don't need to think about long-term care planning. Your current good health today allows you the opportunity to prepare your family and finances for the consequences of longevity. 

Whether you need help with daily living activities or supervision due to dementia, the impact can be life-changing, not just for yourself but for your family. Unfortunately, many people make the error of not preparing at all or preparing incompletely. And yes, long-term health care planning can be complex and overwhelming, especially if you are not getting professional help along the way. 

Getting older is complicated. You must plan for retirement, get legal paperwork in place, and prepare for long-term health care. Ignoring these items can complicate an already difficult time for your family.

Avoid Common Mistakes

There are several common mistakes people make with long-term health care planning. However, it doesn't have to be that hard. You just know how to do it properly. You'll learn how to easily ensure the safety of your assets, your loved ones, and yourself.

Don’t Assume You Won't Need Care in the Future

If you are in good health, it might be tough to accept that you may need long-term health care in the future. However, about half of us who reach the age of 65 will require some type of long-term care at some point in our lifetime. This implies that you are likely to need care, regardless of your health at the moment. Sadly, failing to prepare ahead may be financially catastrophic for you and difficult for your family.

One of the problems you should consider is that long-term health care expenditures may exceed $8,000 per month. The average stay in an assisted living facility is three years, plus some people need care at home, in adult day care, or even in a nursing home. If you go straight to a nursing home, you might be there for an average of two and half years. These averages can be misleading and depend on many factors. One factor to not ignore is many people are at risk of squandering their life savings in just a few years. Therefore, numbers are speaking for themselves - long-term care planning is crucial.

Even if you have substantial savings, going through that money and needlessly placing stress and burden on your family is unnecessary. Since planning can be easy and Long-Term Care Insurance premiums are affordable, why would you risk that kind of money?

Don’t Expect Your Spouse or Children to Become Your Caregiver

As you get older, you may think that your partner or children will take care of you at home if you require it. However, no matter how much you love someone, caring for them around the clock is a demanding responsibility. 

Caregiving can be a 24-hour-a-day profession that may be physically and emotionally draining. Long-term care sometimes necessitates purchasing specialized equipment and costly house renovations, which can be a financial burden for many families.

One of the examples is downsizing. Many seniors decide to move to the smaller home once they retire - a logical step if you think about it. They don't need as much space anymore, plus it's cheaper, so downsizing for senior couples makes complete sense. It's a transition they need, and they need to do anything to make the move easier. However, downsizing and living in a smaller home isn't a great option if you need some bulky medical equipment. 

Caregivers may also find it challenging to provide the proper care when there is limited room available. Would you expect your daughter to love in with you as your caregiver? Family caregivers find their lives get changed as they attempt to balance their career and family responsibilities with their duties of being a caregiver.

You must also take into account your family member's physical abilities. What if you need help getting into and out of bed or a wheelchair? What if you have an emergency and your partner or children are unavailable to care for you? On the other hand, a long-term care facility's personnel are specifically trained to deal with circumstances like these. Furthermore, providing this level of care leaves little time for other activities such as food shopping, errands, cleaning, and their own personal needs. 

Therefore, no matter how much you love someone and how close you are, sometimes life circumstances don't allow in-home care. This is one of the most common mistakes people make with long-term health care planning. Caregiving is hard and family caregivers face many demands.

Don’t Take Advice from Unqualified People 

Unfortunately, many people don't plan for long-term care when they are still young and healthy. As you get older, the need for care increases. Planning requires professional help and advice, which could include close family and friends. However, you should seek professional assistance with the right professional to develop a will, power of attorney, living trust, retirement income, and Long-Term Care Insurance. This group of professionals may include an attorney, physician, CPA, financial advisor, and Long-Term Care Insurance specialist. 

Planning when you are younger requires the right professional help. Problems arise when you seek advice on long-term care planning from someone with inadequate expertise in the subject or who is not licensed to provide legal, financial, or insurance advice.

Be sure to seek an attorney to specializes in retirement and elder law. Be sure to have the proper paperwork in place to make it easier on your family if you can no longer communicate your wishes or after you have passed away. 

Medical HIPAA laws address the use and disclosure of your protected health information. The proper paperwork will allow the person you choose to obtain information and carry out your wishes. 

Avoiding probate is desirable at the time of death. Wills and living trusts can make the process of distributing your assets much easier and faster. Unless you have a complicated estate, the cost of these legal documents is minimal but vital. 

Remember, health insurance, including Medicare and supplements, will not pay for most long-term health care costs. Medicaid will only pay if you have little or no income and assets. Understanding Medicaid and the lookback period is vital to understanding how the system works and how everything else can revolve around those rules. 

To properly prepare using resources like trusts and Long-Term Care Insurance, you should understand the Medicaid lookback period. To avoid the Medicaid lookback period, you must utilize these tools at least five years before needing long-term health care. Otherwise, you risk accruing a term of ineligibility during which you will not be able to receive Medicaid benefits. An experienced attorney can use a Partnership Long-Term Care policy and a living trust to help secure your estate if you have a very extended long-term care event.

Insurance can be complicated, and Long-Term Care Insurance can be even more so if the insurance agent or financial advisor has little experience in this area. While there is both federal and state regulation of these products, policy designs, underwriting, and features like the partnership program can vary between insurance companies. 

Experts suggest seeking advice from a quality Long-Term Care Insurance specialist who works with multiple top companies to help you find the right LTC Insurance plan. This specialist should have extensive experience with policy design, underwriting, tax benefits, partnership programs, and claims. 

Getting the wrong advice can cost you money or even get you declined for coverage since every insurance company has its own underwriting criteria. Therefore, make sure you seek the right person for advice and professional help with long-term health care planning. 

Long-Term Health Care Costs are Soaring

Furthermore, price should not be a deciding factor in safeguarding yourself, your belongings, and your loved ones. Because long-term health care facilities can cost over $8,000 per month (depending on where you live), you face the danger of emptying your life savings on care bills in years or less.

Overall, in-home care and assisted living facilities are less expensive than nursing homes. However, long-term health care costs are rising rapidly due to increased demand for care and higher labor costs. 

You can find the current and future cost of long-term health care services where you live, along with other state-specific information. The LTC NEWS Cost of Care Calculator is a great resource - Cost of Care Calculator - Choose Your State | LTC News.

Asset protection is always a concern, and Partnership Long-Term Care Insurance policies, available in most states, offer additional dollar-for-dollar asset protection.

Don’t Wait Too Long to Plan for Long-Term Care

Waiting too late to address your future long-term health care needs may mean paying for care out of pocket. Planning ahead of time is always the wisest course of action, even if it's unpleasant to consider the possibility of needing long-term care in the future. 

You must have reasonably good health now to obtain coverage today. Once you develop health problems, you might have limited options or no options available - or the cost of the premium could be much higher.

Most consumers obtain coverage in their 50s when they still have reasonably good health, and premiums are much lower.

Be Informed About Your Options

When it comes to long-term health care planning, you most certainly have more than one option for safeguarding yourself and your assets. As a result, it's critical to educate yourself on the many alternatives accessible to you and consult with specialists to learn more about putting those plans into action. 

There are several ways to prepare for the costs and burdens of declining health in the future and aging. What works for a friend or family member may not work for you. Therefore, it's crucial to learn what options are on the table for you and then make big decisions. The key is to consult with a specialist to determine which solutions are appropriate for your particular scenario. 

The truth is that long-term health care planning can be exhausting and scary. However, once you do it, you will have peace of mind knowing you will not be dependent on your family, have access to your choice of quality care, protect assets, and ease the stress and anxiety otherwise placed on those you love.

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