Don’t Let End of Life and Funeral Expenses Bury You In Debt
Updated on Nov 07 2018
Though it can be a difficult topic that many people try to avoid, preparing for the end of your life is very important. Being prepared financially and having a proactive plan for healthcare expenses and funeral and burial costs will eliminate not only financial, but also emotional turmoil.
What are typical end-of-life expenses?
Most Americans are unaware of true long-term health care costs. According to a recent survey from Moll Law Group, respondents estimate long-term care costs to be approximately $25,350, while in reality, costs average $47,000 or more. Not only that, assisted living facilities cost $45,000, while semi-private nursing homes cost $85,775 and private nursing homes cost just shy of $100,000, according to 2017 Genworth data. In addition, funerals can cost upwards of $7,000, depending on the services provided.
With costs being so outrageous, it’s important to get organized and save for end-of-life during your retirement planning.
How can you proactively prepare for end-of-life costs?
First and foremost, getting your essential legal documents is crucial for end-of-life preparation so that not only your healthcare wishes are honored, but also your assets and estate are discussed.
Think about it: If you don’t get legal specifications handled in advance, there will be many legal hoops for your family that will not only take time and be expensive but will also heighten emotion during an already intense time with expensive healthcare and end-of-life costs.
Here are some end-of-life costs to consider, which can vary based on the care and services needed:
- Nursing home, memory care or assisted living care costs
- Hospital stay and operation costs
- In-home care
- Doctor visits
- Hospice stays
If healthcare costs are part of your retirement planning, you can help avoid Medicare or Medicaid issues when it comes to funding senior living care and hospital visits as there won’t be surprises. An expert financial advisor can help you set up a financial investment portfolio to help you prepare for these costs.
Typically, funerals are the the most expensive end-of-life cost if healthcare is addressed ahead of time.
What is the median cost of a funeral?
There are several types of funerals. Between 2004 and 2014, the median cost of an adult funeral increased 28.6 percent, from $5,582 to $7,181, according to the National Funeral Directors Association (NFDA). End-of-life costs surprise many families as they are significantly higher today; which is particularly challenging during an emotional time.
Being prepared with a plan that honors your wishes and covers the costs is like a last gift you can give your grieving family members. Here are the main funeral options:
Traditional full service funerals (cremation or burial) — This is the most expensive type that include viewing and service.
Direct burial and direct cremation — This option doesn’t include viewing or visitation, so it doesn’t include embalming. Direct burials have memorials held at the graveside for a service fee along with plot, casket, or burial container. Direct cremation means the body is cremated shortly after death and placed in an urn or other container. These remains can be kept at home, buried, placed in a crypt, or scattered in a special spot. If you are cost conscious, according to the NFDA, overall cremation is about 15.3 percent less than the average burial.
Funeral costs vary depending on location and service provided, but here is how costs can accumulate:
- Donation of body to medical school or hospital
- Traditional Full Service (Burial or Cremation)
- Service fee for funeral director and staff
- Body Pickup
- Dressing the Body
- Visitation/Viewing staff and facilities
- Funeral or memorial service staff and facilities
- Graveside service
- Hearse or transport
- Cemetery Costs
How can you prepare for funeral costs?
The first step is to think of your funeral and your individual end-of-life preferences. Make a plan with a financial advisor to help fund costs and review what you can cover with savings and your life insurance.
Additional Planning Tips:
- Make a plan of funeral preferences
- Save funds dedicated to funeral expenses
- Shop around in advance. Compare prices from multiple places and remember that you can supply your own casket or urn.
- Ask for a price list. The law requires funeral homes to give you written price lists for products and services.
- Avoid emotional overspending. Resist pressure to buy goods and services you don’t really want or need. It’s not necessary to have the most expensive casket or have the most elaborate funeral for you or loved ones.
- Recognize your rights. Laws regarding funerals and burials vary from state to state. It’s a smart move to know which goods or services the law requires you to purchase and which are optional.
- Apply the same shopping techniques you use for other major purchases. You can cut costs by limiting the viewing to one day or one hour before the funeral, and by dressing your loved one in a favorite outfit instead of costly burial clothing.
- Shop in advance. It allows you to comparison shop without time constraints, creates an opportunity for family discussion, and lifts some of the burden from your family.
Be Prepared for End-of-Life Costs
Healthcare is one of the largest expenses in retirement in America today and end-of-life costs, whether hospital costs or funeral costs, catch many families by surprise. Diligent retirement planning can help you prepare so you can not only have financial peace of mind in your golden years, but you can also alleviate financial and emotion stress for your loved ones when you pass. Connect with a financial advisor today to get your end-of-life planning in order.
Find an Advisor Near You
Advisors by City
Find advisors located in the cities nearest you.
Need a financial advisor?
100% free consumer service