When you are making plans for your twilight years 10, 20 or 30 years in advance you are certainly doing the right thing by exhibiting foresight. However, when you’re looking this far into the future it can be challenging to make accurate projections with regard to your potential expenses. One of these possible expenses is the costs associated with long-term care, and they are a source of serious concern within the elder law community.
How likely is it that you will one day incur long-term care expenses? The fact is that people are living longer than they ever have before, with the segment of the population that has reached 85 years of age and older making up the most rapidly growing age demographic in the United States. Once you reach this age there is approximately a 50-50 chance that you will be suffering from dementia. About 25% of the oldest old are living in nursing homes at any given time, and in total four out of every 10 senior citizens will spend some time in a long-term care facility.
These numbers would suggest that the possibility that you may one day require long-term care is quite real. As for the costs, a 2010 MetLife Mature Market Institute study indicates that the costs of long-term care are extremely high and expected to continue along an upward trajectory.
The average annual cost for a year in a private room in a nursing home in 2010 reached $83,585, which is a 4.6% increase over the 2009 figure of $79,935. That’s almost $7,000 per month. Assisted living facility costs rose at an even faster rate of 5.2%. In 2009 it cost an average of $37,572 per year to reside in an assisted-living community, but in 2010 a year long residence in such a facility would run you $39,516.
Those who do ultimately live in a nursing home spend an average of about 2 1/2 years there. So if you do the math and consider the fact that these already steep costs are rising at about 5% per year you may be looking at a very significant expense during the latter portion of your life. Is important to be cognizant of these possible expenses and keep them in mind when you’re making long-term plans.
Larry Parman
Founding Attorney
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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