When we think about retirement, we often picture the good parts: more time for family, hobbies, or slowing down to enjoy life. But there’s another part of retirement planning many families overlook—planning for long-term care costs.
Long-term care isn’t just about medical needs. It often means help with everyday activities like bathing, dressing, or moving around safely. It can happen at home, in an assisted living facility, or in a nursing home. And it can happen to anyone, even those who are healthy today.
What Many People Get Wrong About Medicare
A common misunderstanding is that Medicare will pay for long-term care costs indefinitely.
Here’s the reality:
Medicare covers up to 100 days of skilled nursing care after a qualifying hospital stay, under specific conditions.
It may cover certain home health services if eligibility rules are met.
Medicare does not cover ongoing custodial care (help with daily activities or supervision due to dementia).
Knowing these limitations is important. It helps you prepare so your family isn’t caught off guard during an already stressful time.
Why Planning for Long-Term Care Costs Matters
Long-term care is expensive. According to the Genworth Cost of Care Survey:
The median annual cost for a private nursing home room is around $116,800.
Assisted living often ranges between $60,000–$80,000 per year.
In-home care can range widely based on how much help you need, with costs from $30,000 to $80,000 annually.
(Source: Genworth Cost of Care Survey 2024)
Without a plan, these costs can quickly drain retirement savings, impacting your lifestyle and your spouse’s financial stability.
Options to Pay for Long-Term Care
While every family’s situation is different, here are common ways people prepare:
Self-funding: Using personal savings, retirement accounts, or investment income to pay for care costs directly.
Long-term care insurance: Policies that may help pay for care in certain settings, subject to policy rules, benefit amounts, and waiting periods.
Hybrid life insurance with long-term care riders: Some policies allow you to use the death benefit to pay for care if needed.
Medicaid: A safety net for those who qualify, with rules around income and assets that may require advance planning.
Annuities with long-term care benefits: Certain annuities can be structured to provide additional care benefits under specific conditions.
It’s helpful to discuss these options with your financial professional and, if needed, your attorney, to understand what might fit your family’s needs and preferences.
It’s Not Just About Money
Long-term care planning is about more than finances:
It’s about dignity and your wishes.
It’s about potentially reducing some stress on loved ones who may need to step into caregiving roles.
It can help you maintain flexibility in where you receive care and who provides it.
Talking with your family while you’re healthy gives everyone a clearer understanding of what you want and how you hope to handle these possibilities.
Practical Next Steps
If you haven’t considered long-term care planning, here are steps you can take:
- Start conversations with your spouse or family about what you’d want if you needed care.
- Review your retirement plan to understand how long-term care costs could fit in.
- If interested, explore insurance options while you’re in good health.
- Stay informed about what Medicare covers and what it doesn’t.
Remember, planning is about preparation, not prediction. It’s a gift to your family to reduce uncertainty and protect your lifestyle as you age.
Have Questions?
If you have questions about how long-term care planning might fit into your broader retirement strategy, consider reaching out to your financial professional for a conversation.
For clear information on what Medicare covers, visit Medicare.gov.
If you found this article helpful, share it with a friend or family member who may benefit from learning more about long-term care planning.
Daniel S. Miller, Kaleb Robuck, Marcus Taylor, and Ashleigh Franco are investment adviser representatives of, and securities and advisory services are offered through, USA Financial Securities. Member FINRA/SIPC. A registered investment advisor located at 6020 E Fulton St., Ada, MI 49301. Milestone Financial Group is not affiliated with USA Financial Securities. Dan Miller, Kaleb Robuck, Marcus Taylor, and Ashleigh Franco are not tax advisors. Tax advice is offered by Rachel Dorr, a tax professional. Tax advice is not provided by USA Financial Securities.
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