Many Georgia residents have spent a lot of time planning and saving for retirement. However, they may not necessarily think about how health care costs could impact their ability to live comfortably after they leave the workforce. The average American will need to spend $260,000 on out-of-pocket care costs during their retirement years, according to Fidelity Investments. Long-term care costs may cause that number to increase.
Anywhere from one-third to half of retirees will have long-term care needs. Those who receive care in their homes may pay $4,500 a month while a semi-private room can cost $7,500 or more per month depending on where a person is located. To pay these costs, it’s beneficial to purchase a long-term care policy. It may also be possible to buy a life insurance policy that comes with either a long-term care or death benefit.
This means that the person who buys the policy will either use it or pass its value to a beneficiary. Medicaid planning may make it possible to retain assets without impacting a person’s ability to obtain services under that program. One option is to setup an IRA payment schedule that converts an asset into an income stream for Medicaid purposes. It’s also possible to convert an asset into an annuity payout.
Accounting for medical costs in retirement at an early age is a good idea. An attorney could help by creating estate planning documents that keep assets out of an estate. This may help individuals qualify for Medicaid or other government benefits without losing assets. An attorney can also help communicate a client’s wishes to family members to make it easier to carry them out.