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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