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BUSINESS Saturday 15 June 2019
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Liz Weston: What will long-term care cost you?

By LIZ WESTON tirement age should con- $100,000 upfront, for exam-
NerdWallet sider their potential risks and ple, or paid in installments
Associated Press have a plan to deal with over 5 to 10 years, although
Many people are fright- long-term care expenses, some now have “lifetime
ened of long-term care financial planners say. pay” options that average
costs — for good reason. “The earlier they start plan- about $7,000 a year.
Most people over 65 even- ning, the more choice and — Home equity. People
tually will need help with control they have,” Cheng who move permanently
daily living tasks, such as says. into a nursing home may
bathing, eating or dressing. The options include: be able to sell their houses
Men will need assistance — Long-term care insur- to help fund the care. Re-
for an average of 2.2 years, ance . The average annual verse mortgages may be
while women will need it for premium for a 55-year-old an option if one member
3.7 years, according to the couple was $3,050 in 2019, of a couple remains in the
U.S. Department of Health according to the American home. These loans allow
and Human Services’ Ad- Association for Long-Term people to tap home eq-
ministration on Aging. Care Insurance. Premiums uity but must be repaid if
Many will rely on unpaid are higher for older peo- the owners die, sell or move
care from spouses or chil- ple, and those with chronic out.
dren. However: This April 2017, file photo provided by NerdWallet shows Liz conditions might not quali- — Contingency reserve.
Weston, a columnist for personal finance website NerdWallet.
— More than one-third will com. fy. Policies typically cover People with substantial in-
spend time in a nursing a portion of long-term care vestments could earmark
home, where the median can quickly wipe out the could face years or even costs for a defined period some of those assets for
annual cost of a private $126,000 median retire- decades living on nothing such as three years. In the long-term care. The invest-
room is now over $100,000, ment savings for people but Social Security. past, big premium hikes ments can produce in-
according to insurer Gen- age 65 to 74. People who Certified financial plan- forced many people to come until there’s a need
worth’s 2018 Cost of Care exhaust their savings could ner Margarita Cheng per- drop their policies after they for long-term care, and
Survey. wind up on Medicaid, the suaded her parents to buy became unaffordable. Fi- then be sold to pay for
— Four out of 10 will opt for government health pro- long-term care insurance nancial advisors say the a nursing home or home
paid care at home, and gram for the indigent that when her dad was 68 and insurance is now more ac- health aide.
the median annual cost of pays for about half of all her mom was 54. Five years curately priced, although — Spending down to Med-
a home health aide is over nursing home and custo- later, he was diagnosed people should still plan on icaid. People who don’t
$50,000. dial care. with Parkinson’s disease. premiums that could rise have much saved, or who
— Overall, half of people People who live alone, are The policy paid for $225 of 50% to 100%. face a catastrophic long-
over 65 will incur long-term in poor health or who have the $260 daily cost of his — Hybrid long-term care term care cost that wipes
care costs, and 15% will in- a family history of chronic 24-hour care in the final insurance. Life insurance out their savings, could end
cur more than $250,000 in conditions have a greater- months of his life, she said. or annuities with long-term up depending on Medic-
costs, according to a study than-average likelihood of “My dad’s disease could care benefits now outsell aid.
by Vanguard Research needing long-term care. have been devastating traditional long-term care There are ways to protect
and Mercer Health and Women face special risks, financially for my mom,” insurance by a rate of at least some assets for
Benefits. since we tend to outlive our Cheng says. “Her mom about 4-to-1. With these spouses, but those typically
MEDICARE WON’T HELP husbands and thus may not lived to be 94, so my mom products, money that isn’t require planning with an
Medicare and private have anyone to provide could easily have 30 more used for long-term care elder law attorney’s help.
health insurance typically unpaid care. If our hus- years in retirement.” can be left to heirs. These You can get a referral from
don’t cover these “cus- bands need paid care that EVERYONE NEEDS A PLAN products typically require the National Academy of
todial” expenses, which wipes out our savings, we Everyone approaching re- you to commit large sums: Elder Law Attorneys.q

US retail sales rose 0.5% in May, led by online shopping

By CHRISTOPHER RUGABER to cut short-term interest now increased for three
Associated Press rates. Other recent data, straight months. And with
WASHINGTON (AP) — such as weak job growth the unemployment rate at
Americans stepped up their in May and choppy con- a five-decade low of 3.6%
retail spending last month, sumer spending earlier this and wage gains easily out-
a sign that recent worries year, has led most econo- pacing inflation, consumer
about cautious consumers mists to expect at least one spending will likely keep
dragging on growth may or two cuts this year. growing this year.
have been overdone. “The consumer didn’t fall Sales at electronics stores
The Commerce Depart- by the wayside,” David jumped 1.1% and rose 0.7%
ment said Friday that retail Berson, chief economist at at auto dealers. Sales in a
sales rose 0.5% in May, after Nationwide Financial, said. category that mostly in-
a smaller gain of 0.3% in the “The concerns that the cludes online retailers rose
previous month. April’s fig- In this June 3, 2019, file photo a shopping cart sits in the parking economy is really slipping 1.4%.
ure was revised up from an lot of a Target store in Marlborough, Mass. Associated Press dangerously are overstat- Still, the economy is fore-
earlier estimate that had ed at this point.” cast to slow in the April-
showed a decline. the economy reached its amid the ongoing U.S.- Retail sales had been un- June quarter, expanding
The report suggests that 10th year of expansion, China trade war, have re- even earlier this year, mak- at roughly a 2% annual
American consumers are tying the 1990s as the lon- turned to nearly 19-year ing it harder for economists pace or less, analysts ex-
still spending at a healthy gest on record. Measures highs. to get a handle on con- pect. That would be down
pace, even as the stimulus of consumer confidence, The figures also lessen pres- sumer spending. But with from 3.2% in the first three
from tax cuts fades. In June, after stumbling this spring sure on the Federal Reserve April’s revision, sales have months of this year.q