LongTermCare (1)No one likes to think about the day when they will no longer be able to take care of themselves, but the truth is that 70% of all people aged 65 and older will need long term-care at some point. Chronic diseases, orthopedic problems, and Alzheimer’s, among other health problems, can restrict a person from performing the activities of daily living, which will require financial resources for custodial and medical care.

Because of physical or mental infirmities, you may one day need help with basic activities such as dressing, taking a shower, or even eating. To get help, you may need to move to an assisted living or nursing home, go to adult day care, or have a home health aide. Even if a family member can provide care for you, it might be a real financial burden for them, especially if they have to cut back on work to do so.

Long-term care costs are so high that they could potentially wipe out a bulk of your retirement funds, but it is tough to plan for something you may not need. Is it worth the risk to your retirement to cross your fingers and hope for the best, or should you have a plan in place if you are part of the 70% needing long-term care?

Your Long Term Care Plan

Don’t turn a blind eye to this potential threat to your retirement nest egg. Look at the options available to you and plan ahead so that if you need extra care later in your life, you can get the best possible and still have resources to live well and take care of your loved ones.

Insurance Options

A long-term care insurance policy can help offset the costs of home care or an assisted living facility. Many of these policies can be quite expensive depending on the coverage you desire. The two factors in determining your coverage are the daily cost of a nursing home today as well as the amount of time you would like your coverage to last.

If this is a route you decide to go, make sure you also purchase an inflation rider as the cost of care is sure to rise. Research your options regarding when to get this insurance and how long to have it for, and look at the differing premiums that you come up with to see if this is a worthwhile option for you. There are plenty of variables with long-term care insurance, so there may be an ideal option out there for your situation.


Medicaid is one government solution to the long-term care cost dilemma. Medicaid long-term care services cover the costs of nursing homes and home care, although the coverage can vary by state. But to qualify for Medicaid, you must have limited financial resources, which is a situation none of us want to find ourselves in during retirement. In 2013, the amount of income a person must fall under to be eligible for Medicaid was $710 a month.

Some states do offer government assistance to those in a higher income group (up to $2,130 a month in 2013). This aid usually does not cover all the costs of care, but it may be just enough to help you and keep your resources flowing for a longer period of time.

Examine Your Financial Security

If you are still years away from retirement, consider saving more to build up a contingency that could cover several months or years of long-term care. If you are unsure you will reach your retirement goals, then one of the above options may work for you instead. Having additional funds saved can also provide for the premiums of long-term care insurance if you decide to add it when you are older. You may find that by planning ahead, you can come up with a solution that blends insurance with savings to protect your nest egg.

Thinking about the need for long-term care can be deeply unsettling. There are so many factors to consider when planning and saving for retirement, that this extra burden may overwhelm you. Please contact me to ask any questions or voice any concerns you may have. To learn more, download our free report, 12 Keys to a Successful Retirement Strategy today. Call my office at 770.249.7424 or email me today at beau@richlifeadvisors.com.

About Beau Henderson

Beau Henderson is a financial advisor, author, coach, radio personality, and CEO of RichLife Advisors. He has helped over 3,000 clients to not just improve their relationship with money, but to live the life of their dreams.

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