How to Financially Survive Your Golden Years

Less than a third of the Medicaid population is consuming 87% of Medicaid dollars on long-term care services, which isn't sustainable. An insurance expert details ways seniors might handle long-term care and other budget issues.

Americans are living longer these days. In 1900 the average lifespan was 47 years and as of 2010 that had increased to more than 78 years. We are also experiencing a deluge of adults reaching retirement age now — 10,000 Baby Boomers turn 65 every day.

By 2030, when the last of the baby boomers have turned 65, nearly one in five Americans will be retirement age, according to the Pew Research Center’s population projections. Money will be a big problem for many of them, especially if boomers develop health problems that affect their ability to live independently, says insurance expert and the chief executive officer of Life Care Funding, Chris Orestis.

“With 30% of the Medicaid population consuming 87% of Medicaid dollars on long-term care services, we can see that’s not going to be sustainable,” Orestis says. “More individuals will be forced to find their own resources to pay for those needs. That’s why states such as California, Florida, New York and Texas are embracing legislation requiring seniors to be notified that they can convert their life insurance policy for 30% to 60% of its death benefit value. The money can be put into an irrevocable fund designated specifically for any form of care they choose.”

Orestis details more ways in which seniors might handle long-term care and other budgetary issues.

Senior discounts really add up

Restaurants, supermarkets, department stores, travel deals and other merchants give various senior discounts with minimum age requirements ranging from 55 to 62.

Some of these places are worth making habits, with 15% off the bill at Applebee’s, 30% off at Banana Republic and 60% off at Food Lion on Mondays! Don’t forget your free cup of coffee at Dunkin’ Donuts if you’re 55 or older, and don’t be shy — at many of these places you’ll have to ask for the discount.

Long-term care is a matter of survival, so use your best options

The practice of converting a life insurance policy into a Life Care Benefit has been an accepted method of payment for private duty in-home care, assisted living, skilled nursing, memory care and hospice care for years.

Instead of abandoning a policy when they can no longer afford the premiums, policy owners have the option to take the present-day value of the policy while they are still alive and convert it into a Long Term Care Benefit Plan. By converting the policy, seniors will remain in private pay longer and be able to choose the form of care that they want but will be Medicaid-eligible when the benefit is spent down.

Your “last act” may be decades away, so plan accordingly

It makes sense to finally enjoy your money after a lifetime of savings, but be smart about it. Take time to organize your paperwork and create a master file that holds documents such as insurance policies, investments, property, wills and trusts, etc., so you have your financial picture in one place.

Also, live smart today and hold off on that new car if you don’t need it. If your current car is paid off and you sit tight for an additional two years, you’ll save $7,200 on a new car with $300 monthly payments. Refinancing your home may also be a very good idea, since rates are still hovering around all-time lows. Get at least three quotes, compare rates, terms and potential penalties to make sure you’re getting the best deal.

Also, live healthy and buy more fruits and vegetables and less junk food to lessen the chance you’ll need long-term care in the future.