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Include long-term care in retirement plans

Thanks to improved medical care, people are living longer than ever before. However, the chance of developing a chronic illness or disability also increases with age. At least 80 percent of people older than 65 are living with one chronic illness, according to the National Council on Aging.

According to AARP Hawaii, our state is one of the most expensive for nursing-home costs. Exorbitant costs are one reason kupuna move in with family once it becomes difficult to live alone. In Hawaii, more than 247,000 family caregivers provide 162 million hours of care to our kupuna every year.

As with many things in life, the best time to plan for long-term care is before you need it. November is Long-Term Care Awareness Month, so take this opportunity to start planning for your future care.

What is long-term care?

Long-term care is a term for the many levels of service people with chronic health conditions need.

Skilled care is round-the-clock care needed to treat an ongoing medical condition, provided by a medical professional such as a nurse or therapist.

Intermediate care is intermittent nursing and rehabilitative services from a health provider.

Custodial care is assistance with activities of daily living, such as bathing, eating and dressing, provided at home by a family caregiver or home health aide.

Who needs it?

The U.S. Department of Health and Human Services reports that approximately 70 percent of people over 65 will need some level of long-term care, usually for three years.

Women especially must consider long-term care costs, since they tend to have a higher life expectancy than men. In Hawaii, women live an average of five years longer, which can add up to hundreds of thousands of dollars in care expenses.

The cost of long-term care depends on the level of service needed — it can range from $25 per hour for a home health aide to a whopping $135,000 per year for a private room in a nursing home.

Who pays for it?

Medicare covers some long-term care costs, such as skilled care or rehabilitative services. However, Medicare does not cover custodial care that helps kupuna with activities of daily living, which is the type of care most often needed.

Medicaid pays for the largest share of long-term-care services, but only for seniors with limited income and assets.

Private insurance plans often cover limited services or short-term, medically necessary care. You are responsible for paying for care that isn’t covered by public or private options.

How will I pay for my care?

When planning for retirement, you must factor in long-term-care costs.

Your certified financial advisor can help determine how much you should save.

Consider long-term-care insurance, which covers personal and custodial care at home or other facilities.

Long-term-care insurance enables you to preserve your assets and guarantees you’ll have options available when you need care.

When considering insurance policies, ask your advisor about maximum amounts paid per day, limits on how long or how much the policy pays in a lifetime and whether premiums will increase over time.

No one likes to think their health will decline as they grow older. However, with some planning, you can reduce the stress of paying for long-term care.

David Kimura is the CUSO Financial Services LP investment program manager for Hawaii State Investment Services at Hawaii State Federal Credit Union providing investment, retirement and financial planning services to members. He can be reached at or 447-8083.

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