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Things you should look For When Determining Cost? Budgeting!!!

Generally, families overlook quality of life and focus more on bells and whistles of a community.

First, assisted living is not supposed to be a hotel. Assisted living ambiance is an important factor but not a sole factor in making your decision. The critical component

 when searching for a right assisted living is a good fit.

Many communities provide an elaborate activity program and spend extravagantly on their activity budget. Assisted living is not a retirement community: it is a community with a purpose to improve quality of life by assisting seniors in chores of daily living, managing health, providing comfort, and engaging them mentally and physically. Thus, a personalized care is required that is specific to each individuals unique needs. Therefore, it is important to find a right fit that will make your love one feel at home and not at an institution.

Second, a budget must be predictable and all cost associated with the care should be included in one lump sum payment. Because it is harder for the resident to become accustomed to a place, the transition is extremely difficult on them.   In our experience, even a change of room within a same community takes a toll on their physical and mental health.   Therefore, it is important to find a community where the resident can stay long-term and does not have to move due to budgetary constraints.

Third, make a budget that will last at least 5 to 8 years. The Centers for Disease Control and Prevention reported that U.S. life expectancy is the highest it’s ever been : 78 years old.   Our suggestion generally is not to move into a community where they would be forced to move out.  The reality is that millions of seniors living in different categorical retirement communities, including assisted living communities, will suffer from lesser Social Security payments due to no cost of living (COLA) and Medicare Premium increases in 2010.   The USA Today reports that it will be “the first time in a generation that payments would not rise.” The article also reported that although “[b]y law, Social Security benefits cannot go down. Nevertheless, monthly payment would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.”   The Social Security benefits anticipate no COLA adjustments for the next two years. Thus, affecting 50 million retired and disabled Americans receiving social Security benefits, and the average monthly benefit for retirees is $1,153 this year.    

Because the Social Security program is projected to pay out more money than it receives in 2016, without any overhaul the retirement fund will be depleted by 2037. This will impact any or all of the assisted living providers and all of its residents.   Therefore, it is critically important that not only residents, but also their adult children need to start thinking of their own future and retirement. The data suggests that adult children are mostly responsible to pay for their parent’s care. It will abhorrent if adult children spend plenty on their parent’s care but are unable to save for their own needs. 

You can use Northwestern Mutual Life Insurance Company useful calculator to help budget for long-term care.   This calculator uses the latest data from Northwestern Mutual’s Cost of Care research and includes a series of adjustable “sliders” that allow allows the individual to change long-term care scenarios.   See the Long-Term Care Cost Calculator at www.metlife.com.