Will You Ruin Your Retirement Paradise?

Doc's note: This week, I'm sharing some of your favorite issues from 2018. Today, we're revisiting one of the most important decisions you'll make... choosing where to spend your retirement.

It can mean the difference between merely living out your retirement and truly enjoying it.

You've worked hard your whole life. You've saved and invested and now you're ready to retire on a nice nest egg. You've always wanted to live by the beach, so you pack up and move to a great seaside town a few states away.

But imagine that you trip on the stairs down to the beach and break your hip. Suddenly, instead of sipping mai tais and relaxing in the sand, you're facing months in a nursing home recovery unit... And Medicare stops paying while you're still there. The high-price home siphons off most of your hard-earned retirement savings.

One small accident ruins your retirement paradise.

Unfortunately, this reality hits more retirees than you might think.

A report from the Office of the Assistant Secretary for Planning and Evaluation under the U.S. Department of Health and Human Services explores this. The report shows that for folks turning 65 between 2015 and 2019, about 52% will need long-term care services at some point in the future.

Keep in mind, Medicare will cover some expenses... but not all of them. Medicare Part A, for example, covers nursing care, like what you'd get at a nursing facility or long-term care hospital, as well as hospice care. Part B also covers physical therapy. Medicare rules are complex, so double-check your coverage first.

Medicare won't cover most long-term care if it isn't specifically medical. That means if you simply need help with activities of daily living (like dressing, bathing, eating, etc.), you'll be on the hook for those charges.

And according to this report from Health and Human Services, those who will have out-of-pocket payments will face an average of about $140,000 in costs. What's more, Medicare stops paying for rehab services (which you would need after an event like a fractured hip or a stroke) after 100 days... But the clock starts from your first day at the hospital. And after the initial 20 days of that 100-day period, you're responsible for a daily co-payment.

With more folks turning 65 every day, we're facing a boom in long-term care needs.

Now, when you're planning on where to live in retirement, the last thing you want to think about is spending it cooped up in a nursing home or rehab center. But this reality is one we must all face.

That's why you want to consider such costs when you plan your retirement move. And we've made it easy for you to do...

In October, my team and I released a new 52-page special report – “Doc Eifrig's Best States for Your Retirement.” We looked at nine separate factors you should consider when choosing the best place to spend your retirement.

One of those factors: Health Care Costs.

As we wrote in the report, about 69% of folks 65 and older will develop a disability before they die, according to the Urban Institute policy research group. And 35% of folks will need to enter a nursing home.

So pay attention to things like the average cost of nursing-home rooms, in-home nursing services, and assisted-living care. Knowing roughly what you'd pay in your city and state will help you better form your financial plan.

We looked at the average monthly cost per state for five data points:

1. Home health aide
2. Adult day-care services
3. Assisted living
4. Nursing-home room (semi-private)
5. Nursing-home room (private)

The data came from the Genworth 2017 Cost of Care Survey, a leading insurance firm.

Here are the top 10 most affordable states, along with the average monthly cost of a private nursing-home room, as well as the monthly cost of an assisted-living facility.

Now, our ranking system included all five data points. You can see the full list with all 50 states in our report. You'll also see our data for housing costs, livability, crime, taxes, and more. It's the most comprehensive state-by-state retirement report out there. We want to empower you with this information to make the best decision to secure your dream home in retirement.

If you're already a Retirement Millionaire subscriber, you can access the new report right here. And if not, you can purchase the report for just $19, plus a special bonus – one full year of Retirement Millionaire. Click here to get your copy today.

What We're Reading...

• Genworth's cost-comparison tool.

• More on the ins and outs of Medicare.

• Something different: Will Google replace pathologists?

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
December 26, 2018

rom the Office of the Assistant Secretary for Planning and Evaluation under the U.S. Department of Health and Human Services explores this. The report shows that for folks turning 65 between 2015 and 2019, about 52% will need long-term care services at some point in the future.