Many seniors will need long-term care services but cannot rely on Medicare or Medicaid to cover the high costs, which average $50,000-$95,000 annually for nursing home care. An annuity can help cover these costs by allowing seniors to set aside a portion of their retirement savings, such as $200,000-$380,000 from $950,000 total savings, that will pay out if long-term care is needed. If long-term care is not required, the annuity provides extra income, while the remaining savings continue growing. Seniors should consult a financial professional when considering an annuity to plan for potential long-term care costs.

1. Can An Annuity Help You Pay for
Long-Term Care?

2. People approaching retirement are usually very
conscientious about planning ahead for the next
stage of their lives; however, few remember to
factor in the cost of long-term care, if they
should need it.

3. Many will. Statistics indicate that two in three
senior citizens will become physically or
cognitively impaired in their lifetime and will be
unable to look after themselves. They will need
the variety of medical and nonmedical services
that constitute long-term care.

4. Currently, they can’t count on Medicare. Many
believe that it includes coverage for long-term
care, but it actually only
covers about three months
of nursing home care
immediately following
a hospitalization, and
co-pays may apply.

5. Medicaid, on the other hand,
will cover some long-term
care costs, but to be eligible,
you have to exhaust virtually all of your personal
resources. Although the amount of assets you’re
allowed to keep differs from state to state, in
general, you may have no more than $2,000 in
countable assets.

6. So if you can’t count on Medicare or Medicaid
and don’t have long-term care insurance, you
may want to consider an annuity.

7. The United Seniors Health Cooperative
recommends that you plan for four years in a
nursing home. The cost of this care ranges from
$50,000 to $95,000 a year, including room,
board and medication. Therefore, you would
want to set aside $200,000 to $380,000, plus
allowances for inflation.

8. How do you do that? If, for example, you have
$950,000 saved for retirement,
you could use some of
this to purchase an
annuity that would
begin paying out
at a predetermined time.
The good news is: If you don’t require long-term
care, it’s extra money in your pocket.

9. Meanwhile, the remainder of your $950,000 is
still invested and continues to grow. Annuities
can be complicated investment vehicles, so
ensure you consult a financial professional
before buying.

10. Randy Bett
www.BetterGroupRealEstate.ca