When considering the possibility of long-term care, many people prefer to tell themselves they won’t need it. However, the reality is that two-thirds of adults will require some form of long-term care. Meanwhile, others know they may need it but feel like they’ll be able to sort out the details when and if the issue arises. However, according to Forbes, the average American couple will have to save a whopping $400,000 to cover long-term care costs in old age.

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Of course, this figure may not apply to you. But how do you know how much to set aside or exactly what to plan for? You will need to anticipate your likely long-term care needs and create a budget to cover those potential costs. Doing this is not as complicated as it seems, and simply involves asking yourself the right questions.

How To Anticipate Your Long-Term Care Needs

The truth is you will never know for sure whether you will even need long-term care, but you can assess the likelihood of it happening. In order to do this, you will have to consider the following factors:

• Lifestyle – Are you living a healthy lifestyle or are you making choices that may negatively impact your long-term health? These include lack of exercise, poor diet, smoking, or lack of socialization.
• Environment – Is your current home safe for aging in place, or are there any modifications you need to make to reduce the risk of falls and accidents?
• Genetics – Are there any hereditary illnesses and conditions running in your family that could impact your future health?

There isn’t much you can do about your genetics, but there is always time to improve your lifestyle in order to reduce the chances of needing long-term care in the future. Regular exercise is perhaps the most important habit you can develop for your long-term health, and it is entirely feasible in old age: Check out this detailed guide to exercises for seniors to start putting together a routine. You should also make sure to stay socially and mentally active, which is the best way to stave off dementia in old age.

How To Budget For Your Long-Term Care Needs

Budgeting can be more complicated, since you will have to arrive at some form of target figure. The best place to start is by learning about the different types of long-term care available and how much they cost across the country. A 2017 survey by Genworth gathered this data, which you can browse online. Beyond this, these are the other aspects you will need to consider:

• Timescale – How close are you to retirement?
• Existing Insurance – What does your current health insurance cover? How useful is it likely to be in the context of long-term care?
• Help Available – What savings and insurance plans are available to help you fund your long-term care costs?

Everyone will choose to finance their long-term care differently, with some opting to simply set money aside while others invest in long-term care insurance. You should also consider looking into Medicare Advantage plans, which have a wide range of prices to suit different budgets. These offer the same coverage as Medicare (Parts A and B), with some plans including benefits for prescriptions, dental, vision, fitness services, caregiver support and a 24/7 nursing advice line.

There are plenty of resources that can help you make a decision. For instance, this guide by the National Institute on Aging outlines all the financing options, while this page contains all of the research on the subject by AARP.

And it is best to plan for getting help with managing your finances later in life with the use of a power of attorney and possibly even a living trust.

Planning for long-term care costs while implementing healthy lifestyle habits that decrease your chance of needing them can seem counterintuitive, but in fact it is the smartest thing you can do. By preparing for the worst-case scenario and maintaining a healthy lifestyle, you are ensuring your quality of life in old age no matter what life throws your way.

by Beverly Nelson