Question #3: When I need Long Term Care, HOW MUCH will it cost?

The easy, opt-out answer is, “well, it depends.”

It depends on how much care we are receiving. 

It depends on where we are receiving the care. 

And, it depends on where you live, meaning, costs vary dramatically based on which state and even city you live.

Where determines How Much

The cost of care in the home today in the Intermountain West (where I live) averages $5,720 per month. Those costs, like many, have been rising quickly and are forecasted to be $8,155 per month in 2033.

The cost for Assisted Living is actually a little bit less at $3,765 per month today, projected to be $4,990 per month in 2033. 

If we require care in a nursing facility or memory care facility, the costs go up significantly, with a shared room costing $7,178 per month today, projected to be $10,234 per month in 2033. 

If we would prefer a private room, the costs are $9,125 per month today and $13,010 per month 10 years from now.

Great, we know an estimate of the monthly cost, but… how long can you expect to pay these costs?

The answer, of course, is: it depends.

How long does someone need long term care?

While every situation is unique, this industry has the ability to track the numbers to a reasonable degree of certainty.

There’s a common perception that care requirements usually last around three years.
This is more or less true, but context needs to be understood.

Here’s how it really works:
When someone requires care, they either pass away inside the first 12 months of starting care or, if they live beyond the first 12 months of care, they receive care for an average of 58 months.

However, these numbers only reflect the type of care that is administered relative to the activities of daily living that we discussed earlier; continence, toileting, bathing, dressing, transferring, and feeding.

When someone is receiving long-term care due to dementia issues such as Alzheimer’s, or other forms of dementia, care lasts for an average of 98 months. 

This makes some sense when you think about it, because someone who has moved into a memory care facility is now receiving compulsory nutrition, exercise, socialization, and good healthcare oversight. The mind continues to deteriorate, but the body is being well taken care of. 

It doesn’t take long to look at these numbers and see that the total out-of-pocket costs can be incredible.

The last point of this article that is financially important to understand is that long-term care is most often paid for with after tax dollars. 

This means that paying for long-term care is actually an income issue rather than an assets issue. 

We talk about how to position yourself around this issue in the next step.