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Addressing the potential risks of extended-term care expenses may be one of the biggest financial challenges for State Farm Insurance employees who are developing a retirement strategy.
Seven in ten State Farm Insurance employees over age 65 can expect to need extended care services at some point in their lives. So understanding the various types of extended care services – and what those services may cost – is critical as you consider your retirement approach.
What Is Extended Care?
Extended care is not a single activity. It refers to a variety of medical and non–medical services needed by those who have a chronic illness or disability – most commonly associated with aging.
Extended care can include everything from assistance with activities of daily living – help dressing, bathing, using the bathroom, or even driving to the store – to more intensive therapeutic and medical care requiring the services of skilled medical personnel.
Extended care may be provided at home, at a community center, in an assisted living facility, or in a skilled nursing home. And extended care is not exclusively for the elderly; it is possible to need extended care at any age.
How Much Does Extended Care Cost?
Extended care costs vary state by state and region by region. The 2021 national average for care in a skilled care facility (single occupancy in a nursing home) was $108,405 a year. The national average for care in an assisted living center (single occupancy) was $54,000 a year. Home health aides cost a median of $27 per hour, but that rate may increase when a licensed nurse is required.
What Are the Payment Choices?
Often, extended care is provided by family and friends. Providing care can be a burden, however, and the need for assistance tends to increase with age.
State Farm Insurance employees who would rather not burden their family and friends have two main choices for covering the cost of extended care: they can choose to self-insure or they can purchase extended care insurance.
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Many self-insure by default – simply because they haven't made other arrangements. Those who self-insure may depend on personal savings and investments to fund any extended care needs. The other approach is to consider purchasing extended care insurance, which can cover all levels of care, from skilled care to custodial care to in-home assistance.
When it comes to addressing your extended care needs, many look to select a strategy that may help them protect assets, preserve dignity, and maintain independence. If those concepts are important to you, consider your approach to extended care.
GenWorth.com, 2022
ACL.gov, 2022
What type of retirement savings plan does State Farm Insurance offer to its employees?
State Farm Insurance offers a 401(k) retirement savings plan to help employees save for their future.
How can employees of State Farm Insurance enroll in the 401(k) plan?
Employees can enroll in the State Farm Insurance 401(k) plan through the company’s HR portal or by contacting their HR representative for assistance.
Does State Farm Insurance match employee contributions to the 401(k) plan?
Yes, State Farm Insurance provides a matching contribution to employees' 401(k) plans, subject to certain terms and conditions.
What is the maximum contribution limit for the 401(k) plan at State Farm Insurance?
The maximum contribution limit for the State Farm Insurance 401(k) plan aligns with IRS guidelines, which may change annually.
Are there any fees associated with the 401(k) plan at State Farm Insurance?
Yes, State Farm Insurance may charge administrative fees for managing the 401(k) plan, which are disclosed in the plan documents.
Can employees of State Farm Insurance take loans against their 401(k) savings?
Yes, State Farm Insurance allows employees to take loans against their 401(k) savings, subject to specific terms outlined in the plan.
What investment options are available in the State Farm Insurance 401(k) plan?
The State Farm Insurance 401(k) plan offers a variety of investment options, including mutual funds and target-date funds, to suit different risk tolerances.
How often can employees change their contribution rate to the State Farm Insurance 401(k) plan?
Employees can change their contribution rate to the State Farm Insurance 401(k) plan at any time, subject to plan rules.
Is there a vesting schedule for the employer match in the State Farm Insurance 401(k) plan?
Yes, State Farm Insurance has a vesting schedule for employer matching contributions, which determines when employees fully own those funds.
Can employees of State Farm Insurance access their 401(k) funds before retirement?
Employees can access their 401(k) funds before retirement under certain circumstances, such as financial hardship or after reaching a specific age.
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