A recent article in Forbes highlights a study that half of all people lose all their wealth after just 6 months in a nursing home.
I’m going to repeat that: Half of all residents in a nursing home lose ALL their wealth, including their home equity, after just 6 months in a nursing home.
As a middle class Long Island resident, that is one of the most frightening statistics I have heard in a long time. The people I know– my friends, clients and elderly neighbors, worked hard and saved hard all their lives to accumulate what they have. They gave up vacations, manicures and Starbucks in order to save money they thought they might need when they retired. To think it could all be wiped out in six months is a devastating thought.
We know that the cost of a nursing home is approximately $12,000- $15,000 each month on Long Island. Many of the people surveyed had less wealth than average people their age before they entered the nursing home. That can easily be explained in two ways. Before people enter nursing homes, they will often spend much of their money on care–medication, doctors, home health care aides. Even a few hours per day of hiring an aide can quickly wipe out savings.
Or it can be explained by good planning. Perhaps the people in the study had ensured that much of their hard earned assets were safe from the bite of those huge monthly nursing home bills. Planning for long term care is essential and must be done prior to you or your spouse becoming ill.