Life expectancies are projected to increase by about 6 years over the next 40 years. (1) And while this means more time with our loved ones, longer life expectancies also mean that retirement savings will need to last for a greater number of years. To compound this problem, the need for healthcare and medical services will increase as well, especially in regards to long-term care (LTC).
LTC costs can be very expensive, ranging from $20 to over $250 a day depending on the type of care needed. (2) This presents a problem for many families—even families who have planned well for their retirement. But as a veteran, you may have access to well-earned benefits that can help you mitigate the substantial costs of LTC.
Aid & Assistance Benefit
One benefit unique to veterans—the Aid and Attendance (A&A) Pension Benefit—is not widely known and is traditionally underused. (3) This benefit is offered through the Department of Veterans Affairs for veterans enrolled in VA healthcare. The A&A benefit is supplemental to eligible veterans’ pension payments and helps to pay for LTC costs such as personal care assistance. To be eligible for this benefit, you must meet the following qualifications:
- Served at least 90 days of active military service with at least one day of service during a wartime period
- Left service with an honorable discharge
- Have a disability OR be over the age of 65 and require assistance with everyday tasks such as eating, bathing, or going to the bathroom
- Fall under a certain asset and income threshold (which changes yearly according to cost-of-living and inflation increases)
This benefit is underused partly because many veterans don’t think they will qualify for it. Although the net worth and annual income limits are low, medical expenses can be subtracted from annual income, allowing more families to be eligible. It’s worth discussing this option with your financial advisor to determine whether you can receive the benefit.
Veteran-Directed Care is another benefit offered to veterans enrolled in VA healthcare, which provides a flexible budget for personal care services. The only qualifications to be eligible for this program, in addition to being enrolled in VA healthcare, is to demonstrate a need for community care and meet the clinical criteria for the service. Services do vary by location and are not available in all areas, so you must ensure this program is available in your location.
If you’re eligible for Veteran-Directed Care and services are offered where you live, a VA social worker will help you assess your needs, hire appropriate workers, and develop a spending plan. This benefit offers you and your family more flexibility in who you hire to provide care and the scope of services you need access to.
State Veterans Homes
Along with the A&A benefit and Veteran-Directed Care, State Veterans Homes provide an affordable option for veterans needing live-in LTC assistance. State Veterans Homes are owned and operated by the state government but are vetted and approved by the VA. Oftentimes, the VA will help to pay for part of the care veterans receive in these communities.
Although services and admissions processes may vary from home to home, these subsidized facilities can provide a good option for veterans needing LTC. Many veterans prefer to live in homes that provide care exclusively to other veterans, allowing the opportunity to bond and build camaraderie as a “band of brothers” during retirement.
Private Long-Term Care Insurance
Of course, based on your needs and resources, it may be in your best interest to purchase LTC insurance from a private company, either to supplement VA benefits or to replace those benefits entirely. For example, if your assets and income limits will never be below qualifying thresholds for the A&A benefit, private insurance may be your best option.
In addition to standalone policies (which can be costly and complicated), some life insurance policies offer LTC riders that can be added to the policy at a lower premium than a standalone policy. Additionally, some fixed and indexed annuities offer an LTC add-on for an additional cost.
Partner With An Expert
When it comes to long-term care planning as a veteran, you have much to consider. To ensure you’re making the most cost-effective decision that provides the right protection for you and your family, partner with an expert who can help you weigh your options. At 1on1 Financial, we specialize not only in financial planning, but in long-term care planning as well. Call our office at 909-981-1720 or simply click here to schedule a free 15-minute introductory phone call today!
About 1on1 Financial
1on1 Financial is an independent financial advisory firm specializing in guiding working and retired professionals, executives, and business owners along the path to financial well-being. Founded in 1997, we use a team approach to help our clients accumulate wealth, generate income, preserve their life savings, and strategically plan for the distribution of their estate. With more than 50 years of combined experience in the financial services industry, we remain true to our fundamental mission: to provide personalized guidance, treatment, care, and service so our clients can gain control of their future and feel confident in their financial life.