And what a depressing process it is.
I know that there's a ton of talk right now about health care and what is the best options for the least amount of money. This is important. I believe that everyone should have access to good health care. It shouldn't be reserved for those who are wealthy or happen to have big employers with decent health plans. Actually, many of these decent health plans have been becoming less and less decent over the last few years.
This experience has taught me that long-term care, such as assisted living or even licensed nursing homes are extremely expensive. This is something that I haven't given any thought to until recently.
In my dad's case, Medicare and his supplemental do a pretty decent job of covering his medical expenses--which is a huge relief. The shocking part is how much care costs after the hospital stay is finished.
My dad lived independently before the accident, but those days are now over. The spectrum of living options after that range from independent living all the way to licensed nursing homes. The type of placement depends on the health needs. Somebody who can pretty much take care of themselves, but do not want a house to take care of and want social activity would do quite well in an independent living facility. Somebody else who has dementia, isn't ambulatory, needs help with meds, etc. needs a facility with a higher level of service.
The costs for these places can be shocking and can range from $3,000/month to $10,000/month. Yes, you read that right.
After a quick Google search, I found that the average American is saving far less that that. These numbers are old, but in 2001, the average American had about $55,000 in retirement savings. Only 11 percent of the population had more than $250,000 in savings. While these numbers are old, I doubt the overall trends in savings have changed much. Even if you double these savings amounts, it won't cover long-term care for very long.
How do people do it?
Are you prepared or are you counting on your Social Security savings to pay for your retirement? Bear in mind that the costs I've quoted will mostly likely increase exponentially be the time you retire.
I'm by no means a finance expert. I will say this. Save! Save! Save! If you're very young and reading this and feel it doesn't apply to you: SAVE! The earlier you start saving, the larger your retirement nest egg will grow. You don't even have to put a lot away in the beginning. Just starting a retirement plan and socking away a few dollars each year (more if you can afford it) will make a HUGE difference.
I really hope that if I'm lucky enough to reach old age like my dad did, there will be a doable method to handle care.
But I can't count on it and neither should you.