Working out how much you need to set aside for retirement is not a precise science. While there are models to help you predict how much you will need to live in 10, 20 or 30 years, things can change.
One mistake people often make when estate planning is to plan only for a rosy future. You may imagine one where you live out your final years in the home you have paid off. Or maybe you envision one where you remain active until the point you die peacefully in your sleep.
Yet, this is not the reality for many older adults. Ill health can mean you can no longer remain in your home and need to enter a long-term care facility. Or that you need someone to come to your home and cook, bathe you and more. When this happens, it can soon render your careful calculations inadequate.
Long term care is expensive and can soon empty your savings
These are the average costs of long term health care in Georgia in 2020, according to one insurer:
- Day health care: $16,260
- Assisted living facility: $42,000
- Home health aide: $49,1952
- Nursing home private room: $86,082
As you can see, any of those will soon add up and run down the money you put aside. Remember these are the average costs: If you need to enter a nursing home, you might need to spend considerably more. In addition, medical treatment and medications can add significantly to the basic costs of health care.
An effective estate plan will involve using a mix of strategies to ensure you can enjoy your old age, cover the medical costs you need and still have assets left to pass to your family when you die. An experienced legal advocate can help you understand more.