Planning Ahead: What Long-Term Care Costs Could Mean for Your Retirement
When you imagine retirement, you probably picture more freedom, time with family, and fewer financial pressures.
But one major cost can quietly upend even the most well-structured plan—long-term care. Whether it’s a nursing home, assisted living, or in-home support, these services come at a steep and rising cost, and they’re often not covered by Medicare.
“If you haven’t factored long-term care into your retirement outlook, you’re not alone. Many people avoid thinking about it, hoping it won’t be necessary,” says Joanne Farace, Senior Vice President, Investments at David Lerner Associates, Inc.
“But preparing now may be one of the most important steps you can take this long-term care planning month to protect your retirement income and preserve your legacy.”
Why Long-Term Care Is a Real Possibility
It’s easy to write off long-term care as something that happens to “other people.” However, the reality is that nearly 70% of adults age 65 and older will need some form of long-term care during their lifetime. It could mean help recovering from surgery, managing chronic illness, or simply support with daily tasks as you age.
Even if you’re in good health now, a long-term care plan helps you remain in control. It’s about making informed decisions now, so your future care doesn’t create a financial or emotional burden on your loved ones later.
The Costs: What You Might Really Pay
Long-term care costs vary by location, type of care, and duration.
As of 2024, the average annual costs for long-term care in the U.S. are:
- Home health aide (44 hours/week): $77,792
- Assisted living facility: $70,800
- Private nursing home room: $127,750
If you need care for several years, those numbers add up quickly. Without proper planning, long-term care expenses could easily consume your retirement savings, affect your lifestyle, or force you to sell assets to keep up.
It’s also important to know that Medicare offers limited coverage for long-term care, typically only short-term rehab after hospitalization. Medicaid may help, but only if your income and assets fall below specific thresholds.
Planning Early Means More Options
One of the biggest advantages of preparing for long-term care costs early is that it gives you more flexibility. The earlier you start evaluating your needs, the more strategies you can consider while you’re still healthy and financially independent.
Some options include:
Long-term care insurance
Helps pay for services not covered by Medicare. Premiums are typically lower if you purchase coverage in your 50s or early 60s.
Hybrid insurance products
These combine life insurance with long-term care benefits, offering a payout either for care or to beneficiaries.
Dedicated savings or investment accounts
You can work with your investment counselor to explore how your retirement portfolio might support future care needs without depleting your primary income streams.
Being proactive now allows you to make these decisions without urgency. It also lets you clarify your preferences such as whether you’d want in-home care or facility-based services.
Protecting Your Income and Legacy
A strong retirement plan goes beyond making sure your basic expenses are covered. It’s also about protecting what you’ve worked hard to build for yourself and your family.
A long-term care plan can help you:
Preserve your retirement income
By earmarking funds or insurance specifically for care, you keep your monthly income intact for daily needs and lifestyle choices.
Avoid family stress
Loved ones won’t need to scramble or make difficult financial decisions on your behalf if a health event occurs.
Safeguard your estate
If you intend to pass down assets or support a spouse financially, planning now helps shield those goals from unexpected care costs.
Discussing these topics with your investment counselor can help you develop a plan that aligns with your values and your finances.
Conclusion
Long-term care isn’t just a medical issue; it’s a financial one. The earlier you address the potential costs, the more control you have over your retirement lifestyle, income, and legacy. While it might not be easy to think about, acting now can provide you and your family with lasting peace of mind.
Have you factored long-term care costs into your retirement strategy? Speak with an investment counselor at David Lerner Associates today to explore your options and protect your future.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.