As a paraplegic planner, I have faced the need for part-time in-home assistance while simultaneously having the CFP financial expertise. Caregivers do non-medical tasks like transferring, bathing, meal prep, transportation, protective supervision, etc. Seventy percent of us are likely to need long-term care with caregiver support. As we age, we may struggle to keep our lovely San Lorenzo Valley homes with this advice in mind.
Earn well, save diligently and invest prudently because money earned is money that lets you control your life. Breed well because your family may help, but elderly can’t always count on children. Apart from wills and trusts, make sure you have advanced directives and powers of attorney because court-appointed guardians can control your medical care, work, marriage and make you abandon your home.
Private disability insurance is more likely to protect you part time for lost work than to finance long-term needs, but long-term care insurance should be considered by every American with assets because the costs of nursing home care or private care are rising. You must weigh the commissions and fees of insurance products against the probabilities your stock, bond and realty investments multiply.
Will Medicare cover home care? No. Medicare Part A covers “medically-necessary” hospital insurance and part B covers additional medical costs, but it takes a Medicare Supplement or Medicare Advantage program to finance pills and office appointments. Medicare covers up to 100 days in Skilled Nursing, but this is short term and not homeowner friendly.
Government disability insurance may help with caregiving, but it is never enough. State Disability Insurance—SDI on your W-2—is temporary insurance funded through your work, which can cover short-term disabilities that keep you from your “regular and customary work.” It pays weekly benefits from $50 to $1,300 depending on your former wages. Social Security Disability can take over here if you have a debilitating condition that prevents significant work. There are income limits on work but not on investment income or assets. SSDI becomes old age insurance at the standard retirement age (usually 67).
Santa Cruz County In Home Support Services (IHSS) provides in-home support services to the blind, aged or long-term disabled, so long as they meet Medicare Eligibility residency and income requirements. In 2024, yearly Medical income limits are set at $20,121 for singles or $27,214 for couples. Medical had an asset limit of $130,000, but this is disappearing in 2024—so fewer recipients need dump assets or buy insurance to evade. IHSS recipients can hire friends or family members if they choose. Average hourly pay for a local in-home provider is $33.75 per hour.
Assisted living centers serve millions now because they feel less institutional than care homes. But they frequently charge $5,000/month plus multiple fees. Nursing homes median prices are $9,000 monthly and the need is greatest where full-time medical assistance is required. Residential Care Facilities for the Elderly, like the one I managed with six residents, give lower prices but fewer social activities or dinner choices.
Median home care assistance costs exceed $5,000 per month full time but allow you to age where you like—no wonder my dying mother fled hospitals. College degrees and difficult licenses are not required for home care practitioners, so the field is open to caregivers whose conscience and willingness to learn probably determines their prices and stability. These people are unsung heroes at best who give meaning to life.
This suggests that your choices for home care are to earn well, breed well, invest well, insure well or accept free help with low income. You can move into a nursing home of varying size or stay at home with help. The choice is yours.
Robert Arne, EA, CFP, MS, of Carpe Diem Financial Life Planning, is a Certified Financial Planner who gives holistic financial advice as a fiduciary pledged to advise with your best interests first. He serves mostly people in the Santa Cruz Mountains. Learn more at www.carpediem.financial.
