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USAA Employees: Navigating the Complexities of Extended Care Costs in Retirement

Addressing the potential risks of extended-term care expenses may be one of the biggest financial challenges for USAA employees who are developing a retirement strategy.

Seven in ten USAA 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.

USAA 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 types of retirement savings plans does USAA offer?

USAA offers a 401(k) plan as part of its retirement savings options for employees.

How does USAA match employee contributions to the 401(k) plan?

USAA matches employee contributions up to a certain percentage, typically a dollar-for-dollar match up to a specified limit.

Can employees at USAA choose their investment options within the 401(k) plan?

Yes, USAA allows employees to choose from a variety of investment options within the 401(k) plan to suit their individual retirement goals.

What is the vesting schedule for USAA's 401(k) matching contributions?

USAA has a vesting schedule that determines how long an employee must work at the company to fully own the matching contributions made by USAA.

How can USAA employees access their 401(k) account information?

USAA employees can access their 401(k) account information through the USAA employee portal or by contacting the HR department.

Does USAA offer any educational resources for employees regarding their 401(k) plans?

Yes, USAA provides educational resources and workshops to help employees understand their 401(k) plans and make informed investment decisions.

What is the minimum contribution percentage required for USAA employees to participate in the 401(k) plan?

USAA typically requires employees to contribute a minimum percentage of their salary to participate in the 401(k) plan, which may vary by plan specifics.

Are there any fees associated with USAA's 401(k) plan?

Yes, USAA’s 401(k) plan may have administrative fees, which are disclosed in the plan documents provided to employees.

Can USAA employees take loans against their 401(k) savings?

Yes, USAA allows employees to take loans against their 401(k) savings, subject to specific terms and conditions outlined in the plan.

What happens to a USAA employee's 401(k) if they leave the company?

If a USAA employee leaves the company, they have several options for their 401(k), including rolling it over to an IRA or a new employer's plan, or cashing it out.