Baby boomers are more prepared for death than they are for their own lives

Sometimes it’s easier to face death than the grim realities of life.

More than eight in 10 middle-income boomers have made at least one formal preparation for when they pass away, like having a will or outlining their funeral preferences, according to a study released this week by the Bankers Life Center for a Secure Retirement.

But only about 32% have a plan for how they will receive care should their health fail in retirement, just 20% have long-term care savings, and fully 30% have less than $1,000 saved for emergencies like a healthcare issue. And most aren’t all that concerned about it either: 40% of middle-income boomers say that retirement care planning is a low priority or not a priority at all.

But the reality is that failing health is likely to impact most of us — often to a degree that will require us to get a caregiver or even go in a nursing home. Indeed, according to the Family Caregiver Alliance, 69% of people aged 65 and older will develop disabilities before they die, and 35% will enter a nursing home.

So why are boomers so resistant to planning for the care they might need in life? “It’s a topic that makes people uncomfortable to think about because they don’t know where to start,” says Scott Goldberg, president of Bankers Life.

Of those who don’t have a retirement care plan, one-third (32%) said that they needed advice but didn’t know who to trust, and one in five said that planning was too complicated (21%). Others said it was too difficult to talk about (20%), while 16% reported that they believe a plan is not necessary.

Many are also “unaware of the fundamental facts about Medicare and paying for retirement care,” explains Goldberg — with 56% mistakenly expecting to use Medicare to pay for care (though it typically does not pay for long-term care like a nursing home). “Adding to their lack of preparation, 81% of boomers underestimate the cost of nursing home care,” he adds.

Whatever the reasons, experts say it’s essential that we plan for caregiving so that our wishes can be honored, and we can afford to pay for the care we’d like. Here’s how to do that.

Get an advance directive. This legal document outlines your medical wishes should you become unable to voice those wishes for yourself; you can also appoint someone else to make the decisions on your behalf if you are unable to do so. The American Bar Association has links to the relevant forms for your state; it also has a good toolkit to help you make the decisions you’ll need to fill out these forms.

Consider how you’d afford it if you need long-term care. Long-term care insurance may cover the nursing home, assisted living or in-home-care costs that Medicare won’t, but it can be costly with AARP reporting that it will set you back an average of $140,000. And it has limitations, like possible specifications that may “require you to be in a very high-level assisted living or nursing home,” before the policy kicks in, says Patrick Simasko, an elder law attorney and wealth preservation specialist at Simasko Law in Mount Clemens, MI. AARP has a solid guide to walk you through the different plans and costs.

It’s certainly not for everyone: “If you have a small nest egg for retirement, long-term care insurance may not offer enough protection to offset the high cost,” says Robert Baltzell the president of RLB Financial in Los Angeles. That’s because: “If you’ve spent all your assets, you may qualify for Medicaid to help pay for your nursing home.”

And if you do have money, you still may not need it: “Consumers must weigh the cost of self-insuring versus a traditional or hybrid LTC plan,” says independent insurance agent Adam Hyers of Hyers and Associates. A nursing home can easily cost upwards of $80,000 a year, but this varies by state.

Sock away even more for medical costs — not including long-term care — in retirement. Fidelity estimates that the average couple will need $280,000 in today’s dollars for medical expenses in retirement — and that doesn’t even include the costs of long-term care.

One good option to put the money in if you can: an HSA. “If you’re still working and your employer offers an HSA-eligible health plan, you are eligible to contribute to a health savings account (HSA). An HSA offers a triple advantage,” Fidelity writes on its site. “You can save pretax dollars (and possibly collect employer contributions), which have the potential to grow and be withdrawn tax free for federal tax purposes if used for qualified medical expenses—currently or in retirement.”

Keep as healthy as you can. We know you know this, but it bears repeating — and here are some free ways of doing this you should certainly take advantage of. If you still have your employer health plan and “the plan covers a gym membership, find a gym or fitness regimen that works for you,” says Baltzell. “Most plans, if not all, cover a yearly exam. Take advantage of what you can do for free or at a discount. Going to the doctor or dentist each year is a way to keep track of your health for free.”

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