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| | | (LYNNIE GUZMAN/www.northfulton.com)
Hutch and Pam Hodgson run Senior Helpers of North Atlanta, providing in-home care for residents with the help of 100 caregivers. (click for larger version) | |
February 07, 2008
Planning to retire this year? A 65-year-old couple will need $215,000 just to cover health cost expenses, according to Fidelity Investments.
Hutch Hodgson of Senior Helpers of North Atlanta explained that after retiring at age 65, males generally live 17 years and females 20 years. With 78 million baby boomers soon reaching retirement, the savings need is high. The average cost of $215,000 assumes no employee sponsored health care and includes the following: expenses associated with Medicare Part B and D premiums, Medicare cost –sharing provisions co-payments, co-insurance, deductibles and excluded benefits and prescription drug out-of-pocket costs. It does not cover over the counter drugs or dental care. And it does not cover long term care.
Hodgson said the need to start saving early is paramount.
"When you look at some numbers prepared by Tiaa-cref, it shows the benefit of starting to save early and compounding the returns on the revenue created by saving and the returns on that saving," he said.
When coupling the cost with long-term care needs such as home care, assisted living or nursing home care, the expenses are large, he said. In-home care costs on average just above $25 per hour, with a private room in a nursing home costing $194 per day, or $70,912 per year.
"The key point here is that there will not be room for 78 million baby boomers in assisted living facilities or nursing homes. Most care will be in the home and this is where planning on the part of the family is important," Hodgson said.
The cost per hour for Senior Helper caregivers is between $16 and $18 per hour, which is below the national average, he said. Caregivers spend on average eight or nine hours in the home, seven days per week. Senior Helpers of North Atlanta employes approximately 100 caregivers.
Advantages for the family include their parents are much happier and likely feel they've kept more dignity in the comfort of their own home. Care plans can be custom-tailored plans to meet their needs.
Hodgson advises everyone to make long-term care insurance part of planning for retirement years to help cover these costs. Almost 95 percent of in-home care is now provided by family members, which he said puts a tremendous burden on the caregivers. With careful financial planning, long term care insurance, the use of reverse mortgages and other financial tools, a family can arrange for the loving care of their parents in the comfort of their home, Hodgson said, "and alleviate the fear they have of going to an unknown environment away from the joy and comfort of their own home."
Any type of care is expensive and requires this planning, he said.
"We do not know the future of Medicare, Social Security and health care costs. We do know that we are living longer and financial planning needs to be done to meet the costs of $215,000 and any long term care costs that might arise," he said. "Unfortunately, most experts are finding that most of us are ignoring this need."
- www.northfulton.com
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