Do You Even Need To Consider Long-Term Care?

Fun fact: Nearly 70% of retirees will need some type of long-term care, according to the U.S. Department of Health and Human Services. 

According to Fidelity, here are the median annual costs of the various levels of care in the U.S.:

Homemaker services: $59,488

Home health aide: $61,776

Adult day health care: $20,280

Assisted living facility: $54,000

Semi-private room in a nursing home: $94,900

Private room in a nursing home: $105,850

These are the median costs in 2021 (meaning the price will vary depending on factors like your specific location and provider). Keep in mind that these are last year’s figures. With inflation, your expenses will likely be much higher by the time you need long-term care.

So I have to ask you:

Can you afford the price of health care without creating a plan for it?

Most people can’t. And it’s not something we can hide from. We can hide from the planning part, but we can’t hide from what happens to our health in the future.

The good news is that you can save for long-term care with an insurance policy or a tax-advantaged account like an IRA or 401(k). Long-term care insurance (LTCI) can be a smart move if you want to protect your assets from the high costs associated with long-term care.

Long-term care insurance can be confusing because there are so many options available — and not all policies are created equal. Here are some points to consider when evaluating LTCI:

  • How much coverage do I need? That depends on how much money you have saved up for retirement and how much income those savings will generate once they stop generating interest and dividends.
  • Can I rely on Medicaid? Ensure that you understand at what point Medicaid will cover your long-term care costs – because it will if you’re eligible.
  • What can I afford to pay out of pocket? You might manage with a less inclusive insurance plan if you are fortunate enough to have a healthy savings account. On the flip side, if you don’t have the savings to back up your potential costs, a higher premium with more coverage might be exactly what you need.
  • Can I afford the premium once I hit retirement age? Build this into your overall retirement income and expense plan and ensure that your costs are sustainable. It would not serve you to buy into a high-end plan now only to cancel it after you retire because you can’t afford it when you may actually need it. And you have to consider that many traditional long-term care plans will increase the premiums on you in the future. So what many people are doing now is using hybrid long-term care plans that can provide benefits in the future, but keep your premiums locked in.
  • What’s included in the plan? Do you have existing health conditions that could prevent your insurance company from accepting you and covering your needs? Look ahead – what obstacles are you likely to come up against based on your family history? What do you want your plan to include?
  • When should you consider getting coverage? Most people think they won’t need coverage until they are in their 80s so why get it when you are in your 60s? Because your health may not allow you to get it in the future. As you get older two things work against you. #1 your age (as you get older the coverage becomes more expensive) and #2 your future health (many people have waited to get coverage and then had a massive health setback that made them uninsurable).

There’s so much to think about!

You don’t have to go it alone, though. A holistic financial advisor can help you connect all the dots and help you weave long-term care insurance that’s right for you into your overall retirement plan – without all the stress!

We can help you check out all of your options. Just click this link or give us a call at 407-960-4052.


All the Best,



Nicholas Royer, MRFC

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