People are living much longer in the modern era. Advancements in medical treatments and technologies mean that people nearing retirement age will likely enjoy 20 to 30 more years of life.

However, these Baby Boomers need to plan properly. About 70% of Americans age 65 or older will require long-term medical care. These late-in-life treatments can be expensive, so people hoping to enjoy their hard-earned retirement account need an estate plan to match.

Expenses of long-term medical care

Whether taking up residence in an assisted living facility or hiring an in-home nurse, long-term medical care is expensive. In 2016, a study found the median rate for a room in a nursing home was nearly $8,000 every month. The same study found that in-home aides cost an average of nearly $4,000 each month. Those prices have only increased.

Many Americans hope to pay for these expenses through Medicaid or Medicare. Medicare can help those in an emergency get immediate, skilled care, but those benefits will not last long. Those looking to secure coverage through Medicaid must liquidate their estate to reach the qualifying income threshold. Qualifying can devastate a person’s estate and leave little for a surviving spouse or heirs.

Various funding options

Traditionally, many people purchase long-term care insurance. However, this type of insurance is expensive and only pays out if a person requires care with “activities of daily living.” If a person never meets the criteria that activates their policy, the insurance company keeps everything. Not all states offer this kind of insurance anymore.

In response, the insurance industry created “living benefits” products that combine life and long-term care insurance. Retirees can access their policies if they suffer terminal, chronic or critical illnesses late in life. If the care is not necessary, the money returns to the estate as a life insurance payout.

Seek a professional legal opinion

People approaching retirement age who have questions about long-term care can reach out to a local attorney familiar with estate planning. A lawyer can examine the current estate plan and its care considerations, then make suggestions for securing more funding later in life.