Saving for retirement is incredibly important, but recent reports show that saving for the senior citizen years is even more important, simply because the cost of aging is steadily on the rise. According to a recent industry survey, the median annual bill for a private nursing room is over $91,000, with some states costing over $150,000 a year and even more. Marked price increases are occurring at assisted living facilities as well, and costs for home health care and adult day health care are increasing, too.
Medicare can help with some of these costs, but this is only a short term solution that covers approximately 80% of the costs for the first 100 days in a nursing home. For patients that require long term care/treatment, the out of pocket costs have the potential to cause significant financial hardship if they aren’t prepared. According to a recent survey by Genworth Financial, projections for private nursing home rooms in 2025 could be upwards of $144,000 a year in West Virginia alone, and even higher in other states with Alaska being the highest at over $281,000. Alex Guerrero, director of operations for Paying For Senior Care, believes that the costs will not get any cheaper either, because not only medical care within nursing homes is rising (often because labor costs are high due to staffing 24/7), but also the other non-medical care services that they’re providing as well such as recreational activities and in-house dining options.
Is there a solution?
With nursing home costs continuing to escalate, for many seniors aging in place in their own homes, often with help, is the best solution until declining health or mental capacity necessitate a move. Often a senior will remain in their own home with daily help for many years, then move on to living in assisted living centers. Non-medical senior caregivers cost on average $15 - 18 per hour when privately employed (including payroll taxes and workers' compensation insurance) and $23 - 30 per hour when hiring agency employed caregivers.
An assisted living situation is a great secondary option, because they are less expensive than nursing homes, but still provide an atmosphere that allows them the care and often the medical attention they may need as they continue to age. In addition, if aging in place is the option that a senior citizen chooses, in-home care technologies are becoming better and more accessible. This means that it’s possible for senior citizens to get the same quality of care at home that they’d receive at a nursing home, without the burdensome costs.
The next solution is to start saving for retirement earlier and work closely with financial professionals to plan not just for leisure during retirement, but for medical care in the future. With medical costs continuing to rise, it’s important to be prepared as much as possible so you’re not shocked with expensive bills at a time when your income is fixed.