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Retirement planning should include long-term care costs – The Denver Post

By Alexandra Olson,The Associated Press

Many Americans have a blind spot when it comes to retirement planning: long-term care costs. Even though the majority of Americans will at some point need long-term care, few are planning for it. Many underestimate the costs and mistakenly believe health insurance can help cover it.

“This is not like being struck by lightning. It is something we will all face in our lives,” said Bruce Chernof, president and CEO of the SCAN Foundation, which researches care for older adults. “If we don’t need it ourselves, it is likely that our spouses, our significant other or our parents will. One way or another, it will touch the lives of every single American.”

The U.S. government estimates that 70 percent of people aged 65 today will require some form of long-term care during their lives. Most of the time, that type of assistance is non-medical, including help with daily tasks such as bathing. The need can arise unexpectedly after a major illness or even suffering an injury from a fall.

The costs of such care can easily outstrip retirement savings: A 65-year-old today can expect to incur $138,000 in long-term care costs over their lifetime, according to a 2017 Bipartisan Policy Center report. Two-thirds of Americans age 40 and up say they’ve done little or no planning for their long-term care needs, according to a poll conducted this year by the Associated Press-NORC Center for Public Affairs Research, with funding from the SCAN Foundation.

Here is some guidance on how you can get a jump-start on planning.


This is something people can do easily and early. AARP has a long-term care calculator that lets people find the average costs for different types of services by state and metropolitan region, based on research by Genworth Financial. The most expensive option — a nursing home— now costs an average $97,000 a year, according to Genworth’s 2017 survey of long-term care costs. Assisted living facilities — for those who can’t live independently but don’t require skilled nursing care — cost about $45,000. For those seeking to remain at home, hiring a home health aide or homemaker services will cost more than $20 an hour. Other options include an adult day health center, which charge an average of $70 a day.

Younger adults should remember that costs are rising. Genworth has a cost calculator that gives estimates on what prices will be in 30 years.


Many mistakenly believe Medicare or private health insurance will help pay for long-term care. Fifty-seven percent of Americans say they plan to rely on Medicare should they ever need ongoing living assistance, according to the AP-NORC poll. But Medicare does not cover extended nursing home stays or non-skilled living assistance, which make up the majority of ongoing care needs for the elderly.

More than 50 percent of Americans end up paying for long-term care out-of-pocket, according to the Bipartisan Policy Center report. That figure rises to nearly 70 percent for those receiving long-term care at home. Many Americans with severe long-term care needs quickly burn through their savings and end up turning to Medicaid, which is projected to account for 40 percent of national spending on long-term care services by 2030.

So it’s a good idea to take the time to research Medicaid rules, particularly what sorts of assets you might have to spend down to qualify. Research how other long-term care financing plans can affect your Medicaid eligibility. For instance, annuity payments may count as income but reverse mortgage payments do not. The government website provides a good overview of Medicaid long-term care coverage and eligibility.

Keep in mind that Medicaid regulations vary widely by state — and could change over time.


Only 11 percent of older Americans have private long-term care insurance, according to the Bipartisan Policy Council, and with good reason.

Simply put, premiums are too expensive for most people. Some estimates put average rates at up to $2,400 annually. Rates have increased significantly since long-term care insurance plans first came on the market about 30 years ago, largely because insurance companies saw fewer voluntary lapses than expected and made other mistaken price assumptions. For the same reasons, the number of insurance companies offering the policies has fallen dramatically.

The good news is that if you start early enough, there is plenty of time to research and make an informed decision about long-term care insurance. Consider your age and income level when considering whether to buy a plan. The younger you are, the lower your premiums will be. But you need to evaluate whether you can keep up with payments into retirement when your income is likely to be lower.

Consider hiring a financial expert to help you pick the right policy.

Growing in popularity are “hybrid” insurance products that combine death benefits or annuities with long-term care benefits. People like them because if the long-term care benefits are never used, heirs still receive the death or annuity payouts. But some financial advisers are wary of the plans because they are difficult to analyze.


Chances are high that relatives will be involved with long-term care, at least to some degree. Experts recommend having family discussions about long-term care preferences before a crisis occurs. For instance, you might be determined to care for a parent or spouse at home as long as possible before putting them in a nursing home. But would that person feel comfortable with a home health aide or an adult day care center while you are at work?

Where you live matters when planning for long-term care, especially if relatives live far away. Check out the condition of your home and if it can be modified to accommodate disabilities.


Retirement planning should include long-term care costs

Dale Earnhardt Jr.’s top-10 retirement gifts include puppies, pickles and a musket

HOMESTEAD, Fla. – As soon as Dale Earnhardt Jr. announced in April that he will retire from full-time racing at the end of the Cup Series season – the last race is Sunday at Homestead-Miami Speedway – it was a given that the NASCAR world was going to come up with as many ways as possible to honor him.

Tradition for the most successful or popular drivers – and Dale Jr. is king in that category – the race tracks give the driver a retirement gift, often paying tribute to his accomplishments there.

Earnhardt knew this would happen, so he made one thing clear as the gifts started to roll in with his final races at each track. He encouraged them to make charitable contributions to their communities rather than give him a traditional gift, saying:

“I’ve got a great life, I don’t need anything. But to have something that’s going to impact someone else or a group of folks long term is the best thing.”

Many of them listened and donated thousands of dollars to different causes, ranging from concussion research to food banks to children’s hospitals. Just last week, Phoenix Raceway gave $100,000 to Childhelp– a nonprofit that helps victims of child abuse.

Financial donations in Junior’s name are obviously wonderful. But the No. 88 Chevrolet driver still got a lot of fun, wacky and sentimental gifts too – some of which were still charitable. So monetary contributions aside, here are Earnhardt’s 10 best retirement gifts, ranked.

10. Daytona International Speedway: A Painting

(Matt Sullivan/Getty Images)

The sport’s most famous track gave Earnhardt a painting that honors his many accomplishments there. The center car is the No. 8 Chevrolet Earnhardt drove to victory in the 2001 Pepsi 400, while depicted in the foreground is the No. 88 Chevrolet from his second 500 win in 2014. The No. 3 car in the background is from his win in the 2010 Subway Jalapeño 250 in the XFINITY Series.

9. Darlington Raceway: A Career collage

8. Kentucky Speedway: A Jukebox

The race winners at this track are also give jukeboxes.

7. Kansas Speedway: Royals’ manager Ned Yost tribute

The Kansas City manager was good friends with Dale Earnhardt Sr., and he shared some fond memories he has of the Earnhardt family. Wishing Junior the best of luck in retirement, he said:

“It’s been a wonderful experience sitting back and watching you accomplish what you’ve accomplished, but what you’ve accomplished is kind of hindsight to what you’ve become to me. You’ve become an outstanding person, you’ve become an outstanding man. It’s just been a fantastic career.”

Earnhardt also received a jersey with his name on it.

6. Michigan International Speedway: A Family photo

(AP Photo/Paul Sancya)

They dug up a photo of Dale Sr., Dale Jr., and older brother Kerry Earnhardt from the only race all three competed in together, the 2000 Pepsi 400, which happened to be at the track.

5. Phoenix Raceway: So many pickles

Who doesn’t love pickles, right? Turns out, Dale Jr. loves this specific brand of pickles from Phoenix, so the track gave him an entire barrel.

4. New Hampshire Motor Speedway: Revolutionary War musket

(Jonathan Ferrey/Getty Images)

The track gave Earnhardt a patriots (lowercase P) hat and a Revolutionary War musket that he was so geeked about. It transformed him into Musket Dale Jr., which is an excellent Dale Jr. He said:

“I tried to tell (his wife) Amy, I said, ‘You’ve gotta see this freaking musket! I can’t wait to bring it home, and we’re gonna hang it on the wall somewhere.’ And she said no. I was like, ‘Well you gotta see it first.’ So I brought it home. She had no idea what to expect. This thing’s like 7-foot tall. So I showed it to her, and she was really impressed. But I still don’t think she wants to put it up anywhere.”

3. Texas Motor Speedway: A horse

(Jonathan Ferrey/Getty Images)

Well, the Texas track didn’t give him a horse, but it donated a horse in his name to Victory Therapy Center, a therapeutic horse ranch that helps people with disabilities, veterans and first responders. It also gave him and Amy a customized stroller since the couple is expecting their first child in the spring.

(Jonathan Ferrey/Getty Images)

2. Talladega Superspeedway: His dad’s car

The Alabama track is also known as Earnhardt Country because Junior and his dad combine for 16 wins there. So it gave Dale Jr. a car– the No. 2 Chevrolet Monte Carlo Senior drove in his 1979 rookie season and in 1980 during his first Cup Series title season. It technically belongs to Motorsports Hall, which is on track property, but it’s on permanent loan to Junior.

1. Sonoma Raceway: Service puppies

Puppies obviously win. The California track donated three puppies – named Dale, Amy and Junior – to Paws As Loving Support Assistance Dogs on Junior’s behalf.

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Dale Earnhardt Jr.'s top-10 retirement gifts include puppies, pickles and a musket