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The No. 1 Retirement Cost Seniors Aren’t Prepared For

Post date: 11/23/2016

retirement costs seniors aren't prepared for

Life is full of plans. Beginning at a young age, we’re taught to always be prepared for the next step—from college and choosing a career to marriage, starting a family and, eventually, helping our own children pave the way for their lives. Throughout adulthood, we’re reminded to save for retirement. If you began saving early enough and were diligent in your savings, you likely believe you’re prepared to enjoy the exact sort of retirement lifestyle you have in mind.

However, research by Genworth reveals some startling information: Americans underestimate the costs associated with aging in place by nearly 50 percent. Even more alarming, healthcare costs only continue to rise. So even if you have enough to cover these costs today, you may not have enough in 10 or 15 years.

If you’re feeling concerned, you’re not alone. But the good news is you can take measures today to ensure you’re able to age in place comfortably. Here’s how:

Understand the Real Costs

The first step in making sure you’re able to enjoy the retirement of your dreams is by learning the costs. According to Genworth, these are the monthly costs for two of the primary services necessary for seniors who want to age in place (based on the national median for 2016):

  • Full-time homemaker services (help with household tasks): $3,813
  • Full-time personal health aide: $3,861

While you may feel healthy, active and able to cover your own household and healthcare needs today, 70 percent of adults 65 and older can expect to need some form of long-term care during their lives.

And if you think you’ll be saving money living away from home, keep in mind the average monthly cost for assisted living is $3,600 – $7,000, and the average cost for a private room in a nursing home is a $7,700 to $12,000 per month depending on the region of the country in which you reside.

Keep in mind Medicare does not cover these costs, and most older adults and their families pay for this care out-of-pocket.

Plan Early

While seeing these numbers can be stressful, it’s not all bad news—especially for those who make the effort to finalize their retirement care plan ahead of time. It can be difficult to stomach the monthly costs associated with aging in place if you don’t take the time to determine how you’re going to cover these items. But if you make sure your care is covered well before you even need it, you can relieve yourself of the burden and enjoy your retirement with peace of mind.

One such way to ensure you have the care coverage you need is through a CCaH (continuing care at home) plan.

In this arrangement, you pay a one-time membership fee and a set monthly rate—which is guaranteed, despite changes in healthcare costs or inflation. Depending on the plan you choose, all of your care needs will be covered—from household services to assistance with the needs of daily living. This way, you can enjoy your independence without worrying about running out of coverage.

Interested in learning more about CCaH and the costs associated with aging in place? Check out our free resource, Calculating the Real Cost of Aging in Place.