The term “retirement planning” can trigger some beautiful thoughts. You can sit back, look out the window, and imagine all the things that you will be able to do during your active retirement years.
This vision may include plenty of time on the golf course, fine dining, and exotic travel to all of the places that you always wanted to experience when you were busy traversing your career path. Without question, if you take the financial end of retirement planning seriously, your golden years can be some of the best years of your life.
Calculating the resources that you will need to put your working years behind you as an active retiree may be relatively straightforward. However, there is a big expense that looms over the horizon after you start to slow down.
Long-Term Care
When you pay FICA or self-employment taxes, part of what you pay goes toward future Medicare eligibility. Anyone who has worked for any significant length of time will qualify for Medicare at the age of 65 under currently existing laws.
If you know that you’re going to qualify for Medicare as a senior citizen, you may not be too concerned about out-of-pocket medical expenses. Most people are aware of the fact that there are some co-payments, deductibles, and premiums that go along with Medicare coverage, but for the most part, they are manageable.
This line of thinking is logical, but many people are surprised when they find out that Medicare does not pay for living assistance. Since the majority of elders will someday need help with their activities of daily living, this is a big deal, because a single year in a nursing home can run you six figures here in northern California.
The average length of stay is over two years according to a government survey, and about 10 percent of nursing home residents remain in the facilities for at least five years. When you combine these figures, you may not be too enthused about the situation that you may face toward the end of your life.
Though this can be a disconcerting paradigm to consider, there is a solution that many people embrace in the form of the Medi-Cal. This government program does pay for long-term care if you can gain eligibility.
Medi-Cal is only available to unmarried people who have less than $2000 in countable assets (married couples have higher limits), but there are things that you can do to divest yourself of resources legally before you apply for Medi-Cal coverage. You would, in some cases, essentially be giving loved ones their inheritances in advance.
It takes careful planning to qualify at the ideal time, because you may have to complete your gift giving at least 30 months before you apply if you want to become eligible right away. An experienced and qualified elder law attorney can guide you through the complex rules.
If you would like to discuss the intricacies of holistic retirement planning with an experienced and qualified elder law attorney, send us a message through this page to set up a consultation: Sacramento CA Elder Law Attorneys.
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