Nursing Homes Are Closing – How Could This Affect Your Retirement?

More Americans are worried about health care costs in retirement than about running out of money. How does that make any sense?

Nassim Nicholas Taleb in one of his books talks about more people thinks it’s more likely that an earthquake in California will kill 3000 people than a natural disaster anywhere in the US will kill 3000.

The first is a subset of the second. The first can’t exist without the second existing too! So, if you’re worried about the first, you should be inherently more worried about the second.

Same thing here.

How can you be more worried about health care costs, which is a subset of retirement planning, than you are about running out of money?

Yet here we are. Why? Because we keep hearing how expensive health care is in retirement. We’re all going to die!!!

We need health insurance and we need it now!!!

We’ve been told for years taht we’re only one paycheck away from being homeless. That we could all go bankrupt in retirement. That we’ll all eat catfood alone in our last few years.

Look I’m no fool. I know what’s going on here. The media is leading the charge for a single payer system. They’ve been doing that since the late 80s when a Democrat Senator from CT won a surprising seat supposedly running on a health care platform.

And ever since, the media has taken it to heart that health care is THE way to advance socialism, if we just scare enough people..

But the problem is, it’s all a lie. Can you run out of money from health costs? Absolutely.

Can you run out of money from being sued? Yep.
Can you run out of money from a divorce? Yes sir.

Can you run out of money from a bad market? Uh huh. High cost of groceries? Indeed.

Property tax? You betcha!

The list goes on and on…and on.

But the next question would naturally be, “what’s the likelihood of this happening?

And the answer will surprise you. Not much.

So turn off the media. Enjoy the life you’ve been blessed with.

In part two of our review of the Vanguard Health Care Costs in Retirement report, we discuss Long Term Care.

Long Term Care is WAY overblown in terms of the worry it causes so many people.

Vanguard says only 15% of retirees will spend over $250k, which is actually quite a bit higher than a REAL WORLD study from the EBRI.

However, Vanguard also says around 50% of retirees will not spend ANY money on long term care services. Nothing.

In fact, Vanguard even shows than 75% of retirees will spend less than $50k TOTAL.

So, given the likelihood that you aren’t going to spend much, but could spend a LOT Long Term Care is the perfect risk to offset with insurance.

DO NOT wait until you’re over 50 to get an insurance policy, as Dave Ramsey suggests.

GET IT NOW! Offset that risk.

And if you don’t have Long Term Insurance. Don’t sweat it. You’re not likely to need to spend a huge amount of $ anyway.

Nursing homes should be growing an an incredible rate, no? Think about it, the number of people eligible to file for Medicare is growing by 65,000 A DAY in the US. Shouldn’t the number of nursing homes follow?

Turns out the answer is…duh…duh…dahhhh… NO!

In fact the number o beds available in the US has dropped nearly 10% since 2000! I find that incredible. Over the past 15-20 the numbers of elderly people have increased dramatically yet the number of beds available have declined.

That simply doesn’t make any sense.

Yet, it does. I mean, would YOU rather age in a nursing home around people you don’t know or in a local assisted living facility or even better your home?

I imagine nearly everyone would rather stay local and in their own home if possible. Even better, is when you do remain local , in an assisted facility or at home, it costs less. MUCH LESS than it does to go to a nursing home.

So, it’s a win/win.

What this means is you may need to revisit your planning. Are you planning for the expectation that you’ll need a million billion dollars to live in a nursing home? If so, why?

The stats simply aren’t there to validate such a concern.

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