The Best Advice for Planning and Paying for Long-Term Care

March 1, 2021


Written by: June Duncan

Long-term care can seem like a distant concern. While you may think you’ll never need it, the majority of us will be forced to rely on it at some point in life. If you do need long-term care, are you prepared? How will you pay for it?

Planning for long-term care. Here are some suggestions to help get you started:

Significant numbers

You may not feel the need for long-term care will apply to you, especially if you are relatively young and healthy. However, according to some statistics, your need for long-term care is a probability, with seven out of 10 Americans requiring long-term care at some point in their lives. In fact, even though it’s a likely need, the majority of those approaching retirement don’t plan effectively for long-term care. As a result, a substantial portion of medical bankruptcies stem from older Americans who need long-term care but are ill-prepared.

Assess likelihood

In order to assess the likelihood you or someone you love will need long-term care, think about your current lifestyle. Are you making choices right now that leave you at risk? What could you do to reduce the chance you will require long-term care due to illness or injury? Are there hereditary illnesses and conditions that could impact you? Are there any home modifications you need to make in anticipation of need?

Lower risk

Taking care of your body can reduce your risk for several medical conditions that can lead to a need for long-term care. As an example, strokes are one of the reasons many people require long-term care.  Everyday Health explains there are several lifestyle choices you can make to lower your risk for stroke. Some of the contributing factors to strokes include high blood pressure, unhealthy cholesterol levels, and being overweight. With a healthy diet and exercise regimen, most people can effectively control those issues and lower the risk for stroke.

What about paying for long-term care? I suggest the following tips:

Heavy burden

Without a plan in place, long-term care can be financially debilitating. Many people believe long-term care will be paid for by Medicaid, but as some experts describe, if you require nursing home care, Medicaid will not step in until your assets are depleted. That means your house, car, savings, and anything else of value that you own must be liquidated to pay for your care before you receive assistance.  The Wall Street Journal points out that care can cost as much as $250 per day, which can quickly deplete financial reserves. All the more reason why it’s vital to have a plan in place.

Evaluate your position

Consider how close you are to retirement to help determine your financial plan. What are the savings or insurance programs available now to help pay for long-term care? How do you plan on paying for the costs of long-term care?  How can you alleviate some of your family’s financial responsibility?

Weigh options

Purchasing long-term care insurance is one suggestion for covering care, but costs go up if you already have a medical condition or are older.  Another option is to invest money or add a rider to an existing insurance policy. Some people look to their personal savings to cover long-term care, and the Veterans Administration can help many former military personnel pay for care.  A health savings account is an excellent option for many people, allowing you to set aside $3,450 in tax deductible contributions each year. Those age 55 or older can invest an additional $1,000 annually in a health savings account, making the option even sweeter. And while Medicare is available, unfortunately it doesn’t cover every medical expense you might encounter. As such, it’s important to look into supplemental options such as Humana Medicare Advantage plans, which can help with expenses such as copayments, prescriptions, and dental and vision coverage.

Final expenses

According to Bloomberg, a substantial portion of nursing home stays end in death. This can equate to major financial stress for family members, on top of the emotional strain of events. One way you can ease your family’s burden is with a pre-paid funeral plan. This opens several viable options, such as designating a joint savings account, buying a pre-need insurance plan through a funeral home, or purchasing a final expense insurance policy.

It’s your plan, your way.

Long-term care can be a financial catastrophe without proper preparations. It’s important to be aware of the likelihood you or a loved one will require long-term care in the future. Make plans now to alleviate the financial and emotional stress of any future long-term care needs.


June DuncanJune is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.