Take care in picking that retirement area
Published: July 5, 2009
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share thisIf the cost of retirement has you concerned, there is one solution - move to a cheaper part of the country. Unfortunately, those areas are not the coastal, mountainous regions many love to retreat to in retirement. If you do move there, you'll face the highest costs in nursing homes, according to a recent survey by Genworth Financial.
The provider of long-term care insurance found the nationwide annual cost for a private nursing home room to be $74,208, or $203 a day, a rise of 4 percent annually since 2005. With that cost rising more than inflation over the same period, by almost double, retirees may want to reconsider where they relocate in retirement.
If you still want to go to a higher-cost area of the country, then appropriate planning must take place to afford it. That planning can be through retirement savings or a long-term care policy that will have enough benefits to cover the average for the city you will live in. And on the other side, if you are planning to retire in a lower-cost area, take time to plan to make sure you're not paying for more coverage per day than you need.
You may not think this is important now, but two out of three people will need assisted care in old age, research has found.
Among those areas with the highest care costs, New England states are near the top along with California, Oregon and Washington. States not touching the coast that are among the highest are Wisconsin and Vermont. So if you like the beach, the lowest cost options are South Carolina, Georgia, Alabama, Louisiana and Texas.
If you like the mountains, head for Wyoming or Utah for low costs.
For lowest cost overall, Louisiana is tops, averaging $139 a day. Hawaii is most expensive at $375 a day followed by Connecticut at $346. Midwestern states have some of the lowest costs and the most options of places to choose from, the survey of care facilities found.
You can find costs by state and city at www.genworth.com/costofcare.
DAN SERRA is a financial planner with Strategic Financial Planning Inc. in Plano, Texas. Contact the writer: serrafinance@yahoo.com.
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