How To Prepare for End of Life Costs as a Retiree
They say you can’t escape death or taxes — and both are quite expensive.
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As a retiree, you increasingly think about your legacy, and may want to leave something behind for your children or other heirs. One of the greatest gifts you can pass along to them is a plan for handling your death: both the logistics and the costs.
Many people find end-of-life costs shockingly high. Spare your loved ones these bills by planning for them.
What End-of-Life Expenses Should You Expect?
The costs of dying don’t start at your death. They start with the (expensive) care you need on your way off the mortal plane.
Costs vary by the type of care you receive. In-home care typically costs $4,000 – $6,000 per month, according to care specialist HomeTeam. Nursing homes cost $6,000 – $8,000 per month in many cases, although costs vary by quality and location. Hospital stays can cost $2,500 – $3,500 per day, or even more. You may also need palliative care or hospice care for weeks or even months, although Medicare typically covers these.
Then there’s the funeral and wake, which can get expensive as you factor in catering costs and the obituary.
More expensive however are the costs associated with your post-mortem remains. These can include embalming, burial, cremation, cemetery plots, caskets, urns, headstones or other grave markers, a burial vault or coffin container.
Families often spend tens of thousands to “send mom or dad off right.” Tens of thousands that may be better spent paying off their student loans, or buying a first home, or starting a business.
You can help them avoid overspending based on grief by forming your own end-of-life plan, and budgeting for it.
Explore Insurance Options
You don’t necessarily need to pay for all these costs out of your nest egg. Insurance companies offer several options to cover these costs.
Preneed insurance covers funeral-related expenses such as embalming or cremation, your casket or urn, and your burial plot (and actual burial costs). You plan out your own farewell, choose your own accoutrements and pay an insurance premium priced based on cost.
Alternatively, you could buy a more flexible final need policy. This can cover just about any costs you like. Want to send your family on a trip around the world to scatter your ashes? No problem. You plan for any costs you like, and work out the premium cost with your insurance provider.
Saving on End-of-Life Costs
First and foremost, set out clear instructions for your final wishes in your last will and testament. That helps prevent your children and other loved ones from overspending on your funeral and burial.
Set a clear budget for it, carved out in your estate. Ask them firmly not to exceed that budget.
You can save money by being cremated, negating the need for embalming, burial, or a cemetery plot. If you do prefer to be buried, plan for the funeral to take place quickly after your passing, and skip the costs of embalming.
Keep your wake or life celebration simple. Designate a family member to plan it and host it (after talking to them first), to keep costs manageable. Budget money for food or catering — even if you just order some pizzas and a keg of beer.
Finally, consider donating your body for scientific or medical research. You do one last good deed on your way out the door, and save your family money on body-related costs in the process. Consider it a win-win.
Your loved ones will have enough on their plate when you pass, both emotionally and logistically. Make their lives easier by taking care of those logistics for them, and planning for the costs.
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This article originally appeared on GOBankingRates.com: How To Prepare for End of Life Costs as a Retiree
