As Americans live longer, we’re seeing a steady rise in the need for long-term care. It’s not the most comfortable topic, and most people avoid it until circumstances force the issue. But the reality is unavoidable: the U.S. Department of Health and Human Services estimates that 60% to 70% of us will eventually require some form of assistance.
For something with odds that high, planning ahead is simply part of responsible retirement preparation.
Many people picture nursing homes when they hear the term “long-term care,” but the definition is much broader. It refers to help with everyday activities—things like bathing, dressing, eating, preparing meals, handling medications, or getting to appointments. This care can be delivered in many different settings, including at home, in assisted living, through adult day programs, or in skilled nursing facilities.
In short, long-term care is about maintaining dignity and independence when daily life requires extra support. And it isn’t cheap.
The 2024 Genworth Cost of Care Survey shows just how significant these expenses have become:
Costs vary by state and service level, but the direction is the same everywhere—up. And traditional health insurance and Medicare were never designed to absorb these expenses.
One of the most common misconceptions I see is the assumption that Medicare will step in when long-term care is needed. Unfortunately, Medicare is medical insurance—it covers treatment for illnesses and injuries, not custodial care.
It does offer limited assistance in very specific circumstances, such as a temporary stay in a skilled nursing facility following a qualified hospital admission. But that help is short-term and conditional.
Medicaid does cover long-term care, but only for individuals with very limited assets. Most people must spend down their savings before they become eligible, and each state enforces a “look-back” period to prevent last-minute asset transfers. It functions as a safety net, not a strategy.
Long-term care insurance (LTCI) can help bridge the gap between what Medicare won’t pay and what most families can’t shoulder out of pocket. Traditional policies still exist, but many retirees have gravitated toward hybrid products that combine life insurance with long-term care benefits. These options offer more flexibility, predictable costs, and a death benefit if care is never needed.
LTCI isn’t the right fit for everyone, but it’s worth evaluating thoughtfully before ruling it out—especially while health and age still make coverage feasible.
Many retirees ultimately rely on some mix of personal savings, investment income, and family support. While family caregiving may feel like the natural fallback, it can create real emotional, physical, and financial strain. Planning ahead protects not just you, but the people you love.
There are also supporting tools that can make funding care more manageable. Health Savings Accounts, when available, offer powerful tax advantages and can be used for qualified long-term care expenses. Home equity can be tapped strategically. And if you’re taking RMDs you don’t need each year, redirecting that excess into a taxable account can quietly build a reserve for future care.
Long-term care planning isn’t a stand-alone exercise; it’s part of your overall retirement strategy. When we look at this together, we consider your health history, family longevity, lifestyle, and personal preferences. We also make sure your legal documents—like powers of attorney and advance directives—are in good shape so your wishes are clear.
From there, we can determine whether insurance, savings, home equity, or a combination of resources makes the most sense for you.
Long-term care is one of the biggest financial risks retirees face—and one of the easiest to ignore. But the families who handle it best are the ones who address it early, before emotions and circumstances force rushed decisions.
If you’d like to take a closer look at how these costs fit into your broader plan, I’m always here to help you move forward with clarity and confidence.