Money Management & the Cost of Getting Old

Do you know how much money your parents will need to cover health care costs over the rest of their lives?

The New York Times recently reported research by the Center for Retirement Research at Boston College (www.crr.bc.edu) on health care costs.  The typical married couple at age 65 will spend $197,000 on insurance premiums, out-of-pocket costs, and home care, assuming neither spends time in a nursing home; if they do, lifetime health care costs may exceed $260,000.  And these are just average estimates; true out-of-pocket costs could reach or exceed $311,000 without nursing home care, and up to $570,000 with nursing home costs.  What’s the likelihood of one of your parents needing nursing home care?  The researchers estimate that about one-third of people turning 65 in 2010 will need at least three months of nursing home care, one-quarter will need more than a year, and about 9% will need more than five years of care. Unsurprisingly, 85% of Americans do not have the financial resources to cover these expenses.

So, how should your parents plan for old age? Among the recommendations is the purchase of long-term care insurance, to be discussed in a follow-up post.  Do your parents have long-term care insurance?

photo credit: http://crr.bc.edu/

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One thought on “Money Management & the Cost of Getting Old

  1. I remember listening to NPR just a few months ago during the painful health care debates and hearing a commentator say that Medicaid was for the poor. You can become poor very quickly with such high costs. My mother is currently on Medicaid because of $10,000/month nursing home costs. It is an enormous problem – not just for elders and their families but for all taxpayers.

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