Reply to Only 100k in 401k at 50

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[quote=Anonymous][quote=Anonymous]Do any of the people freaking out about elder care costs have long term care insurance? Because my DM has it and pays $6,000 a year so that she’ll have $250 a day in care for 5 years straight when she needs to use it. These nightmare elder care cost scenarios would be solved with this type of insurance right?[/quote]

Well first, the LTC company has to still be fiscally viable when you need them.  Many are having issues, as people live longer with more health issues.

In the above example, let's say you purchased it at age 50, and live until 85, with the last 7 years requiring "advanced care".  You paid in $210K, but they paid out $465K for those 5 years.  Basically for anyone hitting the 2.5year+ mark, the company is loosing money.  And you are not even accounting for the costs associated with running the insurance company, that's just the intake from you versus payout to you.

Now $250/day is only $7550/month, but skilled nursing in my parent's place (not DCUM, but not a "cheap area either" is $412/day or $12360/month. So you have to pay the difference along with any medical care/doctor visits/hospital stays/etc.  So you are paying another ~$5K/month or $60K/year.

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