Long Term Care (“LTC”) is any service to meet medical and/or non-medical needs of those with a disability who cannot care for themselves for long periods of time. Examples include home health care, assisted living, residential care or adult day service center.
Probability of those over age 65 becoming disabled in at least 2 daily activities is 68%. 63% of those over age 65 will need long term care as such care is not or cannot be provided by a spouse or family.
The cost of long term care is generally an unplanned retirement expense.
One option is long-term care insurance. Such a policy pays all or a portion of these expenses for you. Depending on the age when purchased, these policies can be expensive. Proceeds from a reverse mortgage can be used to fund a long-term care policy when other funds are not available.
Another option is to self-pay long-term care expenses. A reverse mortgage established before care is needed will grow every year at a guaranteed rate when unused to be available for these expenses when needed.
Home Value: $250,000
Initial Line of Credit at Age 65: $129,644
Line of Credit at Age 75: $224,892
* Initial principal limit $137,250; 2.75 margin; 1 yr. LIBOR; expected rate 4.866; growth rate 5.018