According to the Department of Health and Human Services, approximately 70% of Americans who reach age 65 will need some form of long-term care during their lifetime, with the average use of long-term care services being three years. However, only an estimated 3% of adults over age 50 have any type of long-term care insurance at all.
Without a plan in place, the cost of care can pose a significant risk to your financial security, and the financial security of your family members. For residents of Laguna Springs, California, where long-term care costs can be higher than the national average, planning ahead is especially important. Here’s a guide to six different types of care, along with their respective estimated and projected* costs, to help you make informed decisions and prepare for your financial future.
- Home Care
For many, being able to stay at home for as long as possible is important. Home care can make that possible by providing you with help for everyday activities such as bathing, preparing meals, and getting around, while allowing you to remain in a familiar environment. In-home caregivers provide a more flexible alternative to facility-based care, particularly for individuals who may need assistance but do not require a residential setting.
In California, the average cost of home care is approximately $7,627 per month, or $91,524 per year. That is about 14% higher than the national average.
For those who need home care for several years, here are the estimated cost projections:
- 3 years: $282,892
- 5 years: $485,913
- 10 years: $ 1,049,220
- Adult Day Care
Adult day care can provide another option for older adults who can continue living at home but would benefit from supervision, social activities, meals, or health monitoring during the day. For families looking for a way to support an aging loved one while maintaining a lower level of care costs, adult day services may be worth considering.
In California, the average cost of adult day care is approximately $2,037 per month, or $24,444 per year, adult day care is generally one of the more affordable long-term care options. That is approximately 1% below the national average.
Over time, the estimated cost projections are:
- 3 years: $75,554
- 5 years: $129,777
- 10 years: $280,223
- Assisted Living
Assisted living provides a residential option for older adults who need help with daily activities but do not require the level of medical care provided by a nursing home. Depending on the facility, services may include personal care, meals, medication management, housekeeping, and social or recreational activities.
In California, assisted living costs an average of $7,000 per month, or $84,000 per year. This is approximately 13% higher than the national average.
For those who need assisted living for several years, here are the estimated cost projections:
- 3 years: $259,636
- 5 years: $445,967
- 10 years: $962,966
- Memory Care
Memory care provides specialized support for older adults living with Alzheimer’s disease and other forms of dementia. These communities are designed to provide a secure environment with structured routines, cognitive activities, assistance with daily tasks, and 24-hour supervision.
In California, the average cost of memory care is approximately $8,800 per month, or $105,600 per year. That is about 14% higher than the national average. Memory care can also cost significantly more than traditional assisted living, reflecting the additional supervision and specialized services often required.
Over time, the estimated cost projections are:
- 3 years: $326,399
- 5 years: $560,645
- 10 years: $1,210,586
- Nursing Home Care: Semi-Private Room
Nursing homes provide a higher level of care for older adults who require ongoing medical supervision or assistance with complex health needs. Skilled nursing facilities may provide 24-hour nursing care, rehabilitation therapy, medication management, and specialized medical services and equipment.
In California, the average cost for a semi-private nursing home room is approximately $12,167 per month, or $146,004 per year. This is about 27% higher than the national average.
The cost reflects the comprehensive, around-the-clock care available in a skilled nursing setting. Here are the estimated cost projections:
- 3 years: $451,284
- 5 years: $775,155
- 10 years: $1,673,772
- Nursing Home Care: Private Room
A private nursing home room provides the same level of skilled nursing care as a semi-private room while offering residents greater privacy. Services may include 24-hour nursing supervision, assistance with daily activities, medication management, rehabilitation, and other medical care. It is often the most expensive kind of care you can have.
In California, a private nursing home room costs approximately $15,178 per month, or $182,136 per year. That is about 41% higher than the national average.
Private room rates are typically higher than semi-private accommodations because residents are paying for additional privacy and space. Here are the estimated cost projections:
- 3 years: $562,964
- 5 years: $966,985
- 10 years: $2,087,985
The Bottom Line
It’s important to keep in mind that everyone’s situation is different. Some may need care for only a short period, while others may require several years of assistance. In all cases, it’s better to be prepared than unprepared, and put protections in place against potential adverse future life circumstances. Consider what the costs for long-term care could mean for your savings, retirement income, and the legacy you hope to leave your family.
Ready to start planning? Contact Richard Ngin of Foundation Asset Management today to discuss your long-term care planning needs.
*Cumulative totals assume continuous care starting today with 3% annual inflation compounding each year.
This content is for informational purposes only and should not be considered tax, legal, or investment advice. All investing involves risk, including the possible loss of principal. Tax laws, contribution limits, and plan rules may change. Individuals should consult with qualified financial, tax, or legal professionals regarding their specific situation.
Sources:
https://www.fidelity.com/learning-center/personal-finance/retirement/how-to-pay-for-long-term-care
https://health.usnews.com/best-senior-living/articles/types-and-costs-long-term-care-facilities
https://www.ltcnews.com/resources/faq/how-much-does-long-term-care-cost-in-california
https://ltcarenav.com/resources/care-costs-by-state/california
