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California ranks 9th in long term care services, support

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We have discussed on multiple occasions the importance of long-term care insurance. However, according to a study by "Spectrem's Millionaire Corner," only a minority of people -- even affluent ones -- purchase it. Among people with a net worth of $5 million to $25 million, only 37 percent have it. A quarter of this group said it was too expensive.

Long term care insurance can feel like a far greater financial burden on middle-class families. However, according to the American Association of Retired People, home care services can cost a middle-class family 84 percent of its income, and nursing home care 246 percent of annual income.

Another important factor in planning for your golden years isn't just how you will pay for long-term care, but what kind of long-term care you can get. AARP's latest "State Long-Term Services and Supports Scorecard" ranks all 50 states and Washington, D.C., in the services and support systems they provide for "Older Adults, People with Physical Disabilities, and Family Caregivers."

According to an AARP spokesperson, the goal of the study is to show states what areas they need to work on. She noted that while most states have shown improvement in long-term care, more needs to be done soon. She notes, "We don't have the time to get ready for the demographic imperative that is before us."

The study looked at 26 different variables but focused on things like access, affordability, quality of care, provider and setting choices and family caregiver support. Interestingly, northern cities were among the top ranked. The top five, in order, are Minnesota, Washington, Oregon, Colorado and Alaska. California ranked ninth. Southern states dominated the bottom rankings. The bottom five were Indiana, Tennessee, Mississippi, Alabama and Kentucky, which came in at 51.

The subject of long-term care services and how to pay for them will continue to be an important topic as young baby boomers in their 50s move into retirement and older baby boomers become elderly. As family sizes drop, there will be fewer family members to rely on, and they need more professional caregivers than past generations. While LTC insurance may seem like an extravagance, it can help preserve your independence and lifestyle not only when you become older, but if you are hit with a long-term disability. Your legal and financial advisors can help you determine how best to plan for the future -- whatever it brings.

Source:  Spectrem's Millionaire Corner, "AARP Releases Long-Term Care State-By-State Report" Kent McDill, Jun. 25, 2014

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