November 2023
Financial Planning

Long-Term Care

By Javier Jiminez

Every day until 2030, 10,000 “Baby Boomers” will reach the age of 65. Statistics show that 70% of people over the age of 65 will need some form of long-term care in the years ahead.  By 2050, it is expected that at least 27 million Americans will need long-term care.

Long-term care is a broad term to describe a variety of services and support for those who can no longer care for themselves due to age-related impairments. This care can be provided at home or in a facility designed to care for those who can no longer complete activities of daily living on their own without risking their health and safety.

Long-term can be costly—and costs are expected to double in the next 20 years! Right now, costs can vary from $26 per hour for home care services to well over $100,000 per year for a private room at an assisted living residence.  These costs fluctuate dramatically from state to state. When looking at the costs, it’s important to keep in mind that the average time spent in long-term care is 3.2 years.

Unfortunately, regular health insurance doesn’t cover long-term care, and Medicare won’t come to the rescue, either.   After a qualifying hospital stay, Medicare covers short-term skilled nursing, rehab care or limited home health care services.  It does not pay for custodial care, which includes supervision and help with day-to-day tasks. That is where long-term care insurance comes into play!

Buying long-term care insurance is one way to prepare for your future and preserve your financial plan. However, only 7.5 million Americans have long-term care insurance, which is only 2.2% of the entire U.S. population. 

Considering how significant long-term care costs can be, we recommend reviewing your options in your 50’s so we can run the numbers and develop a plan. That plan may or may not include insurance. Whether you choose to self-fund the potential expense or utilize long-term care insurance depends on your situation and preferences. As we are meeting to discuss your long-term financial plan, we can explore this concept with you to find the best solution that meets your needs.

We’ve included a long-term care worksheet that should help you think through some of the tough questions and prepare for a long-term care conversation when you are ready. CLICK HERE for Your Worksheet.

If you have questions, please contact us.

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