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Starting with an $800,000 liquid asset base and the following assumptions over five years:
• $75,000 annual household expense budget.
• Home care at $25.00 per hour for 10 hours per day for seven days per week in year one
and 16 hours per day in years two and three.
• Assisted living at $4,000 per month in years three and four.
• Skilled nursing facility care at $11,000 per month beginning in year five.
• Assume a 3% annual inflation factor.
• Assume a 6% annual return on the portfolio.
Starting with the same $800,000 and long term care insurance that provides a $10,500 monthly cash benefit, 60 day elimination period, and 5% compound inflation protection, the portfolio with identical expenses after care is $705,302, versus a negative balance of $88,604 as illustrated above.
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