High nursing home expenses can greatly affect your financial outlook in retirement. Is a nursing home in your future? Do you remember a grandparent or parent that lived out the remainder of their lives in a nursing home? You said, “I don’t want this to happen to me.” Here are some sobering statistics about nursing homes:
- 52.3% of 65 year-olds will enter a nursing home in their lifetime
- Men average 0.88 years in nursing home
- 22% of men will need more than one year;
- Women average 1.44 years in a nursing home
- 36% of women will need more than one year
- 79 is the average age when admitted to a nursing home
- The average length of stay is 2.44 years
- The average annual cost for a private room is $92,000 in 2016
- Nursing home inflation has been averaging 3.5%
Bottom line: Medicare and Social Security will not rescue you. Plan on at least 2 years of private pay. Should you get Long Term Care Insurance? Or can you shelter assets from nursing home care costs? The latter will require assistance from an attorney.
Today’s Nursing Home Costs
Nursing homes expenses are very high and the prices vary widely between states. There are no federal or state regulations regarding pricing and the quality of care should also be considered. Unless you purchased a Long Term Care Insurance Policy, or are able to shelter assets, you should expect to private pay until your assets are depleted.
Future Nursing Home Expenses
Nursing Home increases usually outpace inflation. You can view Click national average pricing for semi-private and private rooms using an inflation rate of 3.5% here. Plan for at least two years when you are close to 80 years old. If you are using the Charting Your Retirement Calculator, use these numbers to enter a series of “Special Expenses” in the “Special Situations” form.