This retirement living expense has
nowhere to go but up.
The annual cost of a private room in
a nursing home has cracked the six-figure mark, according to Genworth
The national annual median cost of a
private room in a nursing home is $100,375, the insurer found in its 2018
Cost of Care study.
Overall, the rising cost of care has
outpaced inflation. The Consumer
Price Index for all urban consumers was 2.1 percent for the first
half of 2018. The annual median cost of a room at an assisted living facility
grew by 6.67 percent between 2017 and 2018. Meanwhile, the cost of a shared
room in a nursing home jumped by 4.11 percent.
"These costs are outpacing the
U.S. inflation rate, which is becoming greater competition when it comes to our
wallet share," said Gordon Saunders, senior brand marketing manager at
Alaska is home to the most expensive
location for care in a nursing home.
There, the annual median cost of a
nursing home stay in a private room is $330,873, Genworth found.
The District of Columbia has the
highest price tag for a stay in a one-bedroom dwelling at an assisted living
facility: The annual median cost is $111,195.
Assisted living facilities offer
residents more independence and less medical care and assistance than nursing
Finally, for individuals who'd like
to receive care at home and still live largely on their own, there's the option
of having a home health aide come to visit.
This service costs the most in
Hawaii. Patients can expect to pay a median annual cost of $68,640 for 44 hours
a week of home-health service.
With an estimated 10,000
boomers turning 65 every day, experts say the growing demand for
support services is raising the cost of care.
"With people living longer,
we're seeing a greater demand for that care and assistance as we age,"
said Saunders. "This is an issue of supply and demand."
"Some factors we start to see
that are impacting the home care business is competition for caregivers and
minimum wage increases in some states, which affects businesses bottom
line," he said.
aides are expected to be a growing job sector, with a projected
growth rate of 41 percent from 2016 to 2026, but median annual wages of
$23,210, according to the Bureau
of Labor Statistics.
Planning for care
the topline figure for care costs can be daunting, soon-to-be retirees can help
prepare by working with an advisor to draft a plan.
Questions you need to tackle from
the outset include "Where and how would you like to receive care?"
This can help you get an idea of whether you ought to anticipate the high
cost of nursing home care or the more moderate cost of receiving
Bear in mind that while you may want
to spend the entirety of your retirement receiving affordable care at home, a
change in your health could always lead you to an assisted living facility or a
nursing home — where costs are higher.
You should also select trusted
individuals to oversee your medical
care and to make financial
decisions for you, in the event you become incapacitated.
Discuss with your advisor whether a
long-term care insurance policy or life
insurance with a long-term care feature might be right for you.
Long-term care insurance policies
have been sliding since about 2012. Back then, there were about 233,000 buyers,
accounting for $550 million in premiums, according to data from LIMRA, an
insurance industry association.
In comparison, there were 66,000
buyers of long-term care insurance and $176 million in premiums in 2017, LIMRA
Questions to consider on that front
include "What's your cash flow?" according to Thomas J. Henske, a
certified financial planner and partner at Lenox Advisors.
"What's the carrier's ability
to raise premiums on your long-term care coverage in the future?" he
asked. "If it's life insurance, what happens if either the dividend rate
of the policy or the interest rate go down?"
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