That is the feeling, should the situation arise, among 39 percent of the 1,025 adults polled by the Life and Health Insurance Foundation for Education. However statistics reveal that nearly one in two will enter a nursing facility at some point.



Relatively few interviewees said they plan to rely on insurance OR private savings. "It's a train wreck waiting to happen for this generation," says SK Cotton, an industry observer.

Deb Newman, a LIFE Foundation board member, says the survey shows that many people have no plan at all when it comes to long term care.

Most respondents said they expected to help finance long term care with Social Security and savings, yet they admitted little knowledge of care costs and the likelihood of needing care.

Cotton suggests looking into insurance coverage as soon as possible through the resources now available online.

Covering Long-Term Care Costs

Many caregivers and care receivers cannot qualify for public-funded assistance because they have substantial income and assets but do not have the financial resources to pay for needed services for extended periods of time without impoverishing themselves. In caregiving, many families deplete the resources they accumulated over a lifetime. If this happens, caregivers may try to provide all of the needed care. This can be difficult for spouses who are frail or have medical problems, as well as for family members especially those who work and/or have children. In these instances, you and your older relative should consider asking other family members to contribute to the cost of care and/or to provide some of the care on a regular basis.

If formal part-time care and informal help from families is insufficient, the older person can enter a skilled nursing or other long-term care facility that is certified to accept Medicaid patients. In some communities, however, facilities have waiting lists of persons who want to enter as Medicaid patients.

Ways to Maximize Your Assets

Most caregivers need to budget wisely and maximize their relative's assets. There are several ways to do this:

1.If your older relative wants to remain at home, she could live on one floor and rent out rooms in the rest of the house through a house-sharing arrangement. This arrangement can bring in a substantial amount of income where housing is relatively expensive or in short supply.

2. Another option is to rent out her residence, and have her move to a smaller home, an apartment, your residence, or other housing option. Renting out a residence and house sharing both provide income that will usually keep pace with inflation and offer tax advantages. Improvements, repairs, and all or part of the house can be depreciated. If your older relative lives in the house, she also can claim some of the utilities as a tax exemption.

3. If the house is in an unsafe area, or in a neighborhood or community that is declining in value, it may be best to sell. A federal tax exemption of up to $250,000 is available for a person 55 or older who sells his or her home, or $500,000 for a couple.

4. Another possibility is to provide room and board to someone in exchange for caregiving and/or other needed services. There are several drawbacks to this arrangement, however. It may be difficult to:

* Prove to the IRS that your older family member has received home health services in exchange for room and board.

* Depreciate the room for tax purposes.

* Ensure that the home care employee honors his or her part of the arrangement by providing services in exchange for room and board.

The better arrangement is to rent out the room(s) and pay a home care worker. Some home care workers work as independent contractors (check to see if they have a federal tax ID number to work as an independent contractor). While this arrangement frees you from dealing with social security, workers compensation, unemployment taxes, and other withholding taxes withholding taxes all of which can be complex and time-consuming, there are Internal Revenue Service definitions that govern whether a person is considered to be a contractor or an employee. Thus, be sure to consult an income tax preparer, lawyer, or financial planner before considering this arrangement. If the home care worker is truly an independent contractor then he or she is responsible for paying social security and other taxes.

Other ways to save money include:

* Checking to see if there is property tax relief for older home owners and what the eligibility requirements are.

* Joining clubs or organizations that offer group supplemental health and car insurance plans and discounts on other items and services.

* Buying at discount and thrift stores, during sales and with coupons.

* Checking with mass transit and taxi companies about senior discounts, non-peak hour ride discounts, and free ride services for persons with low-incomes.

* Asking plumbers, trash pick-up services, restaurants etc. if they offer discounts to older customers, many do, but sometimes only if you ask.

You may be able to save 10 to 75 percent on some items and services, if you follow these suggestions.

Lastly and probably most importantly, be sure your relative's assets and your assets are carefully reviewed, if you are helping with expenses. Are you getting the best return on your investments without risking your principle? Are you aware of all of your older relatives' bank accounts, stocks, bonds or other assets? What about pension plans? Some older persons are not getting the money to which they are entitled from pension plans. Having reviewed your assets, what changes can you make to bring in more income? Read good investment books, talk to your bank, your lawyer, and/or find a qualified investment planner or advisor for some ideas.

It's easy to see why it's good to plan ahead with long term care insurance which covers care costs and relieves the burden on caregivers.