Long-Term Care: Costs & Considerations


Understandably, most of us don't want to think about living in a nursing home. It often means a loss of independence, a need for increased medical care and leaving our home to live in a place where people are usually sick. We'd prefer to receive care by our loved ones at home.

But as good as this option sounds, it's often not possible — even if our families want to help out. Why?

  • Children often move far away from home and establish their own families.
  • Certain medical conditions may require a level of care that is beyond the capability of one's family.

Beyond Medicare

If you are age 50 or older, now is the time to start considering long-term care. Don't think you will need it?

Here are the facts1:

  • Seven out of 10 people over age 65 will use some form of long-term care during their lifetime.
  • Less than 33 percent of Americans over age 50 are actually saving for long-term care.
  • A vast majority of people have to dip into retirement savings to help cover medical costs.

You can't depend on Medicare alone, as it only covers skilled nursing care under certain conditions for a duration of 100 days. And a long-lasting illness that requires skilled nursing care, such as Alzheimer's, could devastate one's retirement savings and planned inheritance goals.

Your Strategy

The good news? A focused savings plan alongside insurance can help you gain financial security by accounting for long-term care costs. Before deciding if long-term care insurance makes sense for your situation, you should carefully consider:

  • Retirement income budget
  • Financial goals for you and heirs
  • Personal and family health history
  • Willingness of family members to provide care
  • Actual costs of various long-term care options in your area

Affordable Options

Some policies have attractive contract provisions permitting shared coverage between spouses, flexibility in where to receive care (at a nursing home, personal home or assisted living facility) and adjustments in coverage amounts for rising costs of care. Most states even have programs that coordinate with Medicaid to protect assets from eligibility to receive care under financial hardship.

Long-term care is an important component of retirement planning due to its increasingly high costs.

Talk to your advisor about how you can start planning for long-term care today.