Your aging parents take care of themselves now, but they may need help in the future. You both found a local nursing home you like, but you could do without the expensive costs.
CNBC shares strategies for covering the costs of long-term care. Learn how to help your parents help themselves to financial peace of mind as they enter their golden years.
Those thinking of living in nursing homes should aim to save up at least two years of care. Healthy individuals expected to live longer should shoot for saving up at least five years of care. Calculate other sources of income with this number, such as annuity, pension and Social Security.
While government programs like Medicaid and Medicare help reduce medical costs, the options have their limits. For instance, Medicare only takes care of long-term medical costs if a person needs rehabilitative or skilled services care for 100 days in a nursing care facility. Only those who meet current financial qualifications may receive Medicaid, which means your parents could have too many assets.
Long-term care coverage
Perhaps your parents did not save for retirement and long-term care until later in life. If so, long-term care insurance could help them catch up. A standard long-term care plan only covers long-term care needs. Hybrid coverage plans bundle long-term care coverage and life insurance, but they do not offer as large of a death benefit as standard long-term care policies.
No one should worry about paying for the cost of aging. When you and your parents know your options, you may make better-informed decisions.