Intelligent retirement planning involves getting a firm grasp on the expenses that you may be facing when your working years are through. Looking forward to taking vacations and enjoying leisure time and estimating costs associated with this part of the equation can be fun, but you must also consider your twilight years that lie beyond your active retirement years. There are potential expenses that you may face when you reach an advanced age, and some of them are considerable.
People are living longer these days, with the oldest old being the fastest growing age group in the United States. As you get older the possibility that you will spend some time in a nursing home increases. These costs can add up to consume a large portion of your legacy if you have not made the appropriate plans in advance. If you combine the average length of stay with the average costs, your nursing home expenses may be in excess of $200,000 using today’s figures. Of course, the costs associated with long-term care are expected to trend upward into the foreseeable future, so if you’re planning for a possible nursing home stay in ten or twenty years the number may be much higher.
One possible option for those who are concerned about the costs associated with long-term care would be to take out a home equity conversion mortgage. These federally insured reverse mortgages provide you with payments in return for equity in your home. The loan becomes due after you pass away or move from the home. So, you could choose to use these funds to pay for in-home care. Another approach would be to pay for long-term care insurance with the loan proceeds. If you were to subsequently move into a nursing home or assisted living facility the insurance would pick up the costs. You could then sell the home, pay off the loan with part of the proceeds, and keep the remainder.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
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