When you picture yourself in your 70s or 80s, you might imagine yourself attending birthday parties or graduations for your grandchildren while otherwise aging in place at your home. People want to enjoy good health throughout their golden years, but many people will experience a decline in their overall health as they age.
Although you may hope to live independently for the rest of your life, you might actually end up requiring the type of support provided in a nursing home. If you don’t take the time to plan for nursing home care costs now, your future financial stability and the legacy you leave for loved ones could be at risk.
Nursing home care is incredibly expensive
No matter how much you have set aside for retirement, you could burn through it in just a few years of nursing home living. It costs thousands of dollars every month to have a room in a nursing home, and you pay extra for facilities with better amenities or a private room.
Many older adults will eventually require Medicaid to help pay for their nursing home support. Unfortunately, it can be hard to qualify for Medicaid quickly when the need arises. The state will look back at 60 months or five years of financial records and can impose a penalty.
You may have to pay for your care with your own resources or go into debt. That might put your assets at risk of a creditor lawsuit. Medicaid will potentially pay for your nursing home care, but the state will then try to make a claim against your estate after you die. Your home is one of the few assets that won’t prevent you from qualifying for Medicaid benefits, but it will be at risk of estate recovery efforts after your death.
Those who plan ahead have more security
When you recognize that you could potentially need Medicaid later in life, you can plan now to qualify more quickly if that time ever comes. You can avoid a penalty that could lead to substantial debt and creditor claims, and you can protect your home and other valuable resources from estate recovery efforts.
Proper Medicaid planning involves taking stock of your assets and income to make it easier for you to quickly qualify for benefits when the need arises later in life. For many people, a combination of moving assets into a trust and strategic gifts can help them achieve their Medicaid planning goals. The timeline for your retirement and the assets in your name will have a major influence on the steps that you need to take.
Engaging in proper estate planning, including Medicaid planning, will protect you as you grow older and help maximize the inheritance you pass to your loved ones when you die.