There is a tongue-in-cheek truism that goes like this: “Experience is something you get just after you need it.” Indeed, you are sometimes blind to a reality that becomes very clear after you have had the experience, and it’s hard to imagine how you could have missed it.
This definitely enters the picture when it comes to planning ahead for your elder years.
When you get your first career position, you are introduced to the concept of retirement planning. You are given an opportunity to enroll in the 401(k) plan, and this can be an eye-opener for a young person with regard to the future.
After all, thinking about retirement is a lot of fun. You envision your current self with the freedom to do whatever you want to do with your time. And if you are consistent, smart, and diligent with your saving strategy, you will have the money to do it.
Of course, you may not consider the fact that some of the activities that you enjoy when you are making these plans may not be part of your life when you are a senior citizen. Aging can take its toll, but you really can’t wrap your head around it until you experience it.
Hit the Fast Forward Button
If you could go back in time knowing what you know now, there are some things that you would probably do differently. While this is certainly an imperfect science, you can try to hit the fast-forward button mentally and envision your life as an elder.
This is a key psychological exercise, because you feel pretty much the same on a day-to-day basis in the near term, but you are actually taking steps along the aging process. You can never fully grasp this in the present, but you can make sober projections about the future.
Experience is definitely the best teacher, but you do not have to exclusively rely on your own experiences. You can draw from the experiences of others, and there are statistical realities that can help you understand what you may encounter later on.
The average life expectancy in the United States is 78 years, but this includes people of all ages, so it gets higher as you get older.
Most people expect to live long enough to collect Social Security, and if you do, your life expectancy is into the mid-80s. It is impossible to imagine what if will feel like to be an octogenarian, but this is an age at which you may need help with your activities of daily living.
Clearly, it can take some effort to come to the understanding that you may need living assistance eventually, but it is a fact of life. The United States Department of Health and Human Services tells us that just over 50 percent of American seniors will need paid long-term care.
Medicare does not cover the custodial care that nursing homes and in-home caregivers provide, and long-term care is extremely expensive. If you have to pay out-of-pocket, the expenses can potentially consume all or some of the life savings that you intend to leave to your loved ones.
Fortunately, you can prevent this outcome if you take the appropriate steps in advance, but you have to have a willingness to do so. This is why it is important to cross the psychological barrier and allow yourself to accept what the future may hold.
How can you address these costs if you are willing to take the right steps? Medi-Cal will pay for long-term care, but you cannot qualify if you have significant assets in your direct personal possession.
To gain eligibility, you could convey assets into an income only Medi-Cal trust. As the name would suggest, you can receive distributions of the trust’s income, but you would no longer be able to access the principal.
As long as you fund the trust at least 30 months before you apply for Medi-Cal, the assets would not count, and the lion’s share of your legacy would be protected.
We Are Here to Help!
If you are ready to work with a Los Angeles elder care attorney to develop an intelligent plan for aging, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 310-337-7696.