Planning for Your Financial Future with Life Care

While the adage may be that nothing in life is certain “except for death and taxes,” one thing that’s certain is that costs for life’s necessities will continue to rise, and one of the most concerning is the cost of health care.

Most older adults realize that as they age, maintaining their health becomes increasingly more important. But they may not realize that planning for future health care needs could be more predictable.

According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2019 needs approximately $285,000 saved (after tax) to cover health care expenses in retirement. While it’s relatively well-known that 70 percent of Americans over the age of 65 will likely need long-term care at some point, it’s not clear how many Americans are prepared for the costs associated with that care. And that cost is steep. According to a 2018 Cost of Care study by Genworth, the median annual rate for residential assisted living care is $48,000, with the costs for a private room in a skilled nursing care community averaging $100,375. These costs are hardly insignificant, and researching options now will help prepare for a more financially secure future.

For those under the pressure of finding and securing long-term care for a loved one, the options may look slim. However, there is more available than just paying out-of-pocket or turning to Medicaid. Life Care communities like the ones offered by Lifespace are an option many may overlook, and it’s a much more viable reality than they realize.

When choosing a Life Care contract at a Lifespace community, the financial agreement includes a one-time upfront entrance fee and a monthly fee. Many Lifespace residents choose Life Care when they’re healthy, with the ability to live independently for the foreseeable future. However, given the unpredictability of our lives, the benefit of Life Care is that independent living residents have access to on-site assisted living, skilled nursing and memory care — and the costs for these are already included in the upfront entrance fee. Thus, residents who choose this plan may save significantly on health care costs in the long run.

Take Jane Baxter, a resident of Friendship Village of Bloomington, a Lifespace community in Minnesota. Jane saw firsthand what can happen when there’s no plan in place for unexpected health problems. When her stepfather had a stroke, the family had to scramble to find quality skilled nursing care that was nearby for daily visits. While Jane was lucky because she and her family could afford good care for their stepfather, many of her friends have been less fortunate.

“Some have been in and out of work and on unemployment,” Jane said. “They can’t work and can’t afford to get care unless they have to in a crisis.”

Watching her close friends during this time made her realize that struggle and uncertainty weren’t things she wanted to endure. As a single woman in her 70s, Jane decided to take control of both her financial and physical future.

“I wanted to be able to take care of myself,” she said. “I wanted to know what my [health care] costs would be — and to be prepared for those costs.”

Jane found that Life Care communities like Friendship Village of Bloomington ensure monthly fees won’t increase significantly year over year. And that if you ever do need care, you know where you’ll get it, who will provide it, and how much it will cost.

Plus, in addition to solving care concerns, you’ll also be making a financially prudent decision. Lifespace residents who opt for Life Care typically have a care rate that is predetermined and substantially discounted below market rates. The monthly fee won’t increase significantly if they need assisted living or skilled nursing. In a community without a Life Care option, you’ll likely pay a higher rate for long-term care, or see your monthly fees rise dramatically — neither of which you’ll want to contend with while struggling to address health care concerns.

For Jane, Life Care at Friendship Village means less time worrying, and more time enjoying her life. “I have some friends who know they need to plan, but they don’t do anything about it,” she said. “If you wait until you need it, it’s too late, and you’ve missed the best part of moving to a Life Care community. The community of friends and neighbors, the feeling of having everything provided under one roof — I’m so glad I moved when I did. I love it here!”

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