If I end up needing long-term care, how much would it cost?
It depends on what type of care you need and where you live. On average, the daily cost of a private room in a nursing home is now $219, which adds up to nearly $80,000 per year, according to a new study by the MetLife Mature Market Institute. A private room in an assisted-living facility now averages $3,131 per month. And home health aides charge $21 per hour, on average.
The prices vary a lot by location. For example, the average cost of a private nursing-home room is $171 per day in Alabama, but it’s $286 in California. Average monthly assisted-living costs are $4,365 in Maine but $2,568 in Louisiana. And home health aides charges an average of $28 per hour in Phoenix but just $14 in Birmingham, Ala. See the full list of costs by location in the MetLife Mature Market Institute study.
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No matter where you live, such expenses could quickly eat away at your retirement savings because Medicare doesn’t cover long-term care. And keep in mind that the costs are likely to be much higher by the time you need care -- especially if you’re in your fifties or sixties now. The average cost of a nursing-home room increased by more than 3% last year. If prices continue to rise at that rate, one year of nursing-home care could cost nearly $170,000 in 25 years, when a 55-year-old is likely to need care. Care in your home may cost even more -- and those rates rose 5% last year.
Long-term-care insurance can protect your savings from burdensome bills. Policies are now less expensive than previous versions, yet they still provide enough coverage for most people’s long-term-care needs. See How to Minimize Long-Term-Care Premiums for details. However, be sure to include some form of inflation protection with your long-term-care policy because the cost of receiving care continues to rise.
Got a Question? E-mail Kim at askkim@kiplinger.com
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