Even those with good retirement savings may need Medicaid

by | Oct 27, 2021 | Long-Term Care Planning |

Estate planning needs often overlap with retirement planning needs. Many people only think about what will happen with their property when they die during estate planning, and they don’t stop to think about their golden years as carefully.

Reviewing your retirement plan, taking steps to protect your assets and thinking about whether you can qualify for Medicaid could all be part of the estate planning process. Even if you have a sizable retirement, you might still benefit from planning to qualify for Medicaid if you need benefits in the future. 

Your retirement savings may not hold up to a nursing homes day

No matter how much you have set aside for a comfortable retirement, it may only take a few months to blow through money that would support you for years if your medical needs increase unexpectedly.

The Department of Financial Services for New York estimates that residents in a nursing home will spend hundreds of dollars a day for the cost of their care. It could cost between $264 and $390 per day for care, which could add to up to between $96,360 and $142,350 per year. Although the state estimates that most people will require two-and-a-half years of nursing home care, some people may require far more than that.

Medicare will not cover the cost of a nursing home, which means that the only way to cover those expenses is to qualify for Medicaid or pay out of pocket. You need to plan ahead of time if you want Medicaid to help you cover the cost of staying in a nursing home when you get older.

How does Medicaid planning work?

Medicaid planning involves reducing your personal assets so that you can quickly qualify for Medicaid if you need the benefits later in life. Moving major assets, like your home, into a trust, is often part of Medicaid planning, as are gifts to your loved ones.

Asset protection is also part of the Medicaid planning process, as the same legal strategies that would prevent the Medicaid estate recovery program from laying claim to your property could also protect your legacy from other creditors. In theory, with proper planning, you can qualify for Medicaid if you need benefits and not have to worry about your estate repaying every cent of medical care that you received after your death.

Considering your long-term needs can help you engage in the right estate planning processes, including Medicaid planning.