Retirement is expensive, especially in a state with a high cost of living like California. While you may have started saving for your retirement as soon as you took your first full-time job in your 20s, your savings may not last as long as you’d like when you retire, especially if you need medical support.
You may have a seven-figure retirement account that you hope will fund not just the basic necessities of life, but also things you enjoy, like travel. Although you feel confident about your retirement savings, it’s still possible that you may not have enough set aside for your needs as you age.
Planning for your potential future medical needs often requires a critical review of how long your retirement savings will last.
A decade in a nursing home could use up everything you saved
While you are healthy now, there is no way to know whether you might develop early-onset Alzheimer’s disease or another debilitating medical condition as you age. You might need to enter a nursing home in your late 70s if you suffer a fall or get diagnosed with a serious age-related condition.
You could potentially live for several decades after that. However, even if you have a generous retirement savings account, the extreme expenses associated with nursing homes could use every last cent you have saved and then leave you with ever-growing debt.
California has average costs that exceed the national average for monthly nursing home expenses. A semi-private room will cost an average of $9,247 per month, while a private room will cost $11,437. Even a semi-private room will cost more than $1,100,000 for someone who stays in a nursing home for a decade.
You can plan now for possible medical issues in the future
You can’t know what the future will hold, but you can protect yourself by planning for any eventuality. Recognizing that you could need more nursing home support than you can afford with your retirement savings could help you plan for that particular worst-case scenario.
Adequate long-term care planning will ensure you have access to government aid and personal resources as you age. Recognizing the value of life-care planning helps ensure that you have the right protection in place for yourself as you age.