Boomers Are You Ready For The Next Big Financial Squeeze?
By Jan Morgavan
The last several months I have been looking for an assisted living facility for my father. This is not new territory for me. In fact, I see it as an Instant Replay. I find myself in the same situation I was in 14 years ago - looking for similar care for my mother. Not much has changed over the years except the monthly rates are higher and these facilities now have much fancier names.
When looking at long term care there are so many aspects to consider. If you do the thorough research to find the best facility for your loved one, you may find yourself feeling like you have fallen into a black hole and can’t get out. Been there, done that times two!
For the purposes of this article, I want to focus on the financial aspect of long term care. To get right to the point… money can’t buy you love but it sure CAN BUY you one heck of a comfortable place to live during your senior years.
After going through this process for my father, it became very apparent to me that as us Boomers age many of us are not going to be able to finance our own long term care needs. I suspect that most Boomers probably do not know what it takes to finance long term care. This is especially true if they have never dealt with a parent or family member needing long term care.
What we are talking about is some serious money. Just call any long term care facility in your own city and ask what their monthly rate is. Of course, the rates are different for different parts of the country but I would be willing to bet that $3000 a month is not far fetched as a ball park amount for many parts of the country. And this rate will probably get you a semi-private room in an assisted living facility with few amenities.
Add a couple of thousand more dollars if a nursing home level of care is needed. With inflation and the cost of living increasing each year, who knows what the rates will be in 10 years. What we do know for sure is the rates are headed up and not down.
Let’s continue with the $3000 figure for the purpose of my example, knowing this is closer to today’s rates than those in the future. My question to all Boomers is this… When you turn 70 years old, will you have $3000 dollars of disposable income each month to pay for long term care if you need it? This is really where the rubber meets the road.
If you are independently wealthy, you are set. If you have very little or no monthly income and if the US government continues with the current entitlement programs, the government will probably be picking up the tab for you. But the big financial squeeze will be felt by the Boomers that have enough monthly income that disqualifies them for any government entitlement programs but not enough income for independently wealthy status.
Certainly this subject is just not pleasant and for most folks just best left alone. It is so easy to bury our heads in the sand. My recent search for assisted living for my father has be one huge wake up call for me. Thank goodness there are many services available today to help in making plans and decisions for ones future years. There are financial planners and long term care insurance carriers to name a few.
Well, it can be said that there is power in numbers. And if that is the case, hopefully the Boomer population will have an affect on the state of long term care in a positive way. Well, I can only hope.
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