When you are planning for your retirement years while you are still working pleasant thoughts of free time, travel, and leisure invariably dance around in your head. Making sure you have the financial resources to take full advantage of this free time is a long-term goal that is a large part of what retirement planning is all about. But to prepare comprehensively and intelligently you have to understand all the possible expenses that you may be facing. There is a period of time that follows your active retirement that can include a stay in a long-term care facility, and the costs involved are considerable and something to pay close attention to if you are trying to make accurate expense projections.
Each year the MetLife Mature Market Institute puts out a study that provides a great deal of insight into the cost of long-term care in the United States, and their findings are actually rather stunning if you haven’t been paying attention to the subject. In 2010 the average annual cost for a yearlong stay in a private room in a nursing home in the United States was $83,500, a 4.6% increase over 2009 figures. The same length of time residing in an assisted living community would run you just under $40,000 on average, and this was a 5.2% increase over 2009. If you are planning for retirement 5, 10 or 20 years from now and you project these costs outward based on a 4% to 5% annual increase you are looking at some enormous numbers.
The United States Department of Health and Human Services estimates that seven out of every 10 senior citizens will someday need some form of long-term care. The average stay for someone who does reside in a nursing home is 2 1/2 years. So if you do the math, you may be looking at some very significant expenses toward the end of your life, and this is something to keep in mind as you are planning for the future. If you feel as though you need some assistance in devising a plan, the wise course of action would be to arrange for a consultation with an experienced estate planning attorney.