The cost of assisted living can eat through your nest egg

Here’s the scenario: You’ve worked all your life and saved money to enjoy your golden years. Then, after about fifteen years of blissful retirement, your pension fund is exhausted and you need help with living. Something you haven’t saved or prepared for. Nationally, the average cost for a retirement home is $3,500 per month. A ten-year stay would cost you over $400,000! The nest egg that you have so diligently preserved all your life has cracked and deformed in an instant.

It could get worse. If you are married and you or your spouse need care, the other spouse probably has nothing to live on. A terrifying scenario played out all too often. Of course you want to be able to enjoy your retirement, but if the circumstances call for extensive care, you at least want your investments to survive and provide for your family.

So what should you do?

The best way to protect you, your spouse, and your assets against incredibly high costs is to have the right insurance plan. From the age of 60 you should consider taking out assistance insurance. Before the age of 60, the chance of needing assistance with living is extremely small, but every year after the age of 60 the chance increases. And every year the price of the insurance also increases. So plan ahead and add long-term care to your insurance plan. Then, whatever costs your health insurance or state aid doesn’t cover, your long-term care will, and your retirement investments won’t have to take the hit.

Look around for the best insurance premiums. Compare prices and coverage plans. Think of it as the same as buying a car insurance policy. Which company offers the best coverage for the lowest price? You want to strongly consider them. And even though it is less likely that you will move to an assisted-living home at the age of 60, you can set a lower premium by taking out the insurance earlier.

The most important thing to remember is that your golden years should be focused on quality of life. Prepare for the worst so you can enjoy every scenario without worry. To be financially prepared to cover these costs, rather than letting that burden fall on loved ones, is a wise decision. Love your family and yourself by planning for the possibility of needing assisted living.