Personal Finance Essentials

Long-Term Care Planning

70% of People Over 65 Will Need Long-Term Care. Medicare Won’t Pay a Penny.

Do You Have a Plan?

Long Term Care

The Risk You May Be Underestimating

Of those who reach age 65, 40% will spend time in a nursing home and 70% will require long-term care at some point. The median annual cost of a semi-private nursing home room now exceeds $114,975. Half of couples spend their income down to the poverty level after one spouse has spent just six months in a nursing home.

Neither private health insurance nor Medicare pays for long-term care. Long-term care is custodial – providing help with Activities of Daily Living such as bathing, dressing and eating – not a medical need as defined by insurers and government programs. So who pays? You do, until you can no longer afford it.

Your Options

Three solutions exist for dealing with long-term care costs.

1
Qualifying for Medicaid through legal asset transfer planning. Medicaid countable assets include second homes, additional vehicles and virtually all savings and investments – CDs, stocks, bonds, mutual funds, annuities, IRAs, retirement plans and even the cash value of life insurance policies.
2
Purchasing long-term care insurance, which transfers the financial risk to an insurer.
3
Self-insuring by building sufficient retirement assets to cover potential care costs out of pocket.

Whatever approach you choose, the worst option is doing nothing.