One of the biggest expenses during retirement may be the cost of entering a nursing home or an assisted living facility. However, many Minnesota residents are not planning for this expense or have an idea of how much it may cost to access these services. It was reported by MoneyRates.com that 57 percent of Americans believe that living in a nursing home would cost less than $75,000 a year.
However, that cost is actually $90,520 for a private room while a semi-private room will cost more than $80,000 per year. These number don’t take into account the fact that the cost of a room may vary by region. In New York City, the cost of a private room in a nursing home could run as high as $141,620 on average.
The numbers further indicate that 67 percent of Americans do not have enough money saved up for a single year in a nursing home. For those who were thinking about paying for their room with Medicaid, it could limit their options as not all facilities take Medicaid and it may only pay for a semi-private room. Long-term insurance policies may also not be good enough as they may only pay a portion of the total cost of living in a nursing home.
Regardless of how healthy a person is today, it is always important to plan for future scenarios where an individual’s health may not be as good. By setting aside money early in life and researching all available care options, it may be possible to receive adequate care later in life. Talking to an estate planning attorney may make it easier to think of ways to save for the cost of care that a person may need after the age of 65 as well as get other financial affairs in order.
Source: Fox Business, “Most of Us Have No Idea How Much a Nursing Home Costs“, Richard Barrington, July 11, 2014