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Finding a Solution: The True Cost of Aging in America

Finding a Solution: The True Cost of Aging in America

People are living longer than ever before. At first, that sounds like a good thing. Who doesn’t want more years to spend with their loved ones? Unfortunately, many people are paying the price for their long lives. Long-term care, particularly in assisted living facilities and nursing homes, can quickly become expensive. Nationwide, it costs an average of $43,200 a year to live in an assisted living facility. Move to a nursing home and that cost skyrockets to over $80,000 for a semi-private room or $90,000 for a private room. In some areas of the country, it’s even higher. In California, for example, the cost of a private room in a nursing home averages around $100,000 a year.These costs simply aren’t affordable for many aging adults, especially for those who never planned to outlive their retirement income so substantially. While advances in medicine have made it possible for aging adults to live high-quality lives longer than ever before, unfortunately, in many cases, their retirement savings are depleted long before that point. The solution? “Aging in place,” which allows adults to stay in their own homes for longer. Here are some of the options to make this a more viable solution.

Home Care Services

Home care services, which may be paid for by Medicaid, allow elderly individuals to get the care that they need in their own homes. They can receive basic medical care services, help with personal care, and even get transportation to and from medical appointments. In some cases, home care services will also include meal preparation or provision. The median cost of six hours of care from a home health aide is around $30,000 per year — much less expensive than an assisted living or nursing home facility. In addition, some individuals need less assistance than others, which reduces these expenses. It is for this reason that Medicaid has programs in place that provide home care for many individuals who do not require institutional care.

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Adult Day Care

Adult day care is more than just a place where your elderly loved one will be looked after in a secure setting. It’s also an opportunity for them to socialize, participate in activities, and have their basic medical needs seen to. The median cost of adult day care is $17,904 per year. If no other home care services are necessary, adult day care can significantly improve an aging individual’s ability to keep their retirement savings in place for much longer than if they had been in a nursing home or assisted living facility.

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Home Modification

When your elderly loved one purchased their home, they likely weren’t considering their needs as they aged. Things like wheelchair ramps, widened doorways, and accessibility options for showers and bathtubs can drastically improve your loved one’s ability to remain in their own home. While Medicaid and Medicare may do not cover physical modifications to the home, some states offer special pilot programs that can help with home modifications. If your state does not cover these modifications, they are acceptable expenditures in terms of using your loved one’s existing assets and can be used to lower that asset amount to meet Medicaid thresholds. The Medicaid “spend down” can be quite complex for the uninitiated, and it is therefore recommended that you reach out to a long-term care Medicaid eligibility expert or educate yourself fully and learn as much as you can about the process.

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Looking Forward

While the current health care model is working, it’s evident that the state cannot support the needs of an aging population indefinitely. Many revisions are needed to the system in order to ensure high-quality care for aging individuals in America. It’s going to take personal planning as well as public planning to avoid a crisis. Going forward, retirement age may shift to reflect the change in life expectancy. Improving the health of older adults to allow them to remain active and productive members of society longer will also contribute to the solution — but it’s not a perfect fix. In addition to steps taken by the population as a whole, personal planning is necessary in order to ensure that aging adults will be able to provide for their own needs for the duration of their lives.

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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