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Everything You Need to Know About Planning and Paying for Long-Term Care

By September 5, 2018Uncategorized

Research suggests that the majority of adults over the age of 65 in the United States will need long-term care at some point in their golden years, so it’s best to start planning now — especially considering the hefty price tag that’s attached to it. There are several options to consider based on your preference, though budget tends to steer the ship.

 While the majority of seniors would prefer to age in place, it’s wise to come up with a plan B in case you or your spouse becomes seriously ill. Aside from a nursing home (typically the least expensive option, especially if there aren’t any medical needs), other options include hiring in-home help, adult day care services, or moving to an assisted living facility or residential group home. Start by planning for the future, which includes figuring out how you’re going to pay for all your expenses. Here are some key factors and financial options to consider.

How to Plan

While it can be difficult to truly assess the likelihood you or a loved one will require long-term care, you can start by taking a look at your lifestyle choices. If you’re a heavy smoker, drink too much, eat a poor diet, and never get exercise, you’re likely to need assistance sooner rather than later. It’s also helpful to take a look at your family history to see what hereditary illnesses and conditions may impact you. The top afflictionsinclude alcoholism, breast cancer, obesity, and heart disease, so speak to your doctor about how you can reduce your risk. If you’re already starting to have mobility issues, make the proper home modifications (think grab bars, raised toilet seat, improved lighting) to lessen the risk of injury.


How To Pay

Retirement Savings

Many Americans don’t have enough money saved up to have a comfortable retirement, let alone take care of long-term care costs. Studies indicate that families end up paying out-of-pocket costs an upwards of $100,000 during the last five years of life. If you’re not yet retired, concentrate on putting away as much money as possible before you’re on a fixed income.


It’s no secret that medical costs increase with age, and while Medicare is available to those 65 and up, it doesn’t cover everything. With that in mind, consider purchasing a supplemental plan such as Humana Medicare Advantage or Medicare Supplement insurance that can help cover the costs of additional medical care for your loved one. Just keep in mind that you can’t use more than one form of supplemental insurance, so do some research before settling on one.

Withdraw Money From An Individual Retirement Account (IRA)

While taking money from an IRA will raise your taxable income, the tax deduction you’ll receive from using this money only for long-term care costs basically turns your IRA into a tax-free health savings account.


Life Insurance

Many people avoid life insurance because they can’t afford it, but unlike several years ago, there are several different types of policies to choose from. If you did purchase it, keep in mind that you can always end up selling your policy to help pay for long-term care and daily living expenses, but be prepared to submit your health records and insurance information so your payout can be determined.

Reverse Mortgage

Providing both you and your spouse have to be in an assisted living facility or nursing home, you can get a reverse mortgage to help pay for your financial obligations.While there are several types of reverse mortgages available, the one that pertains to seniors looking to pay for long-term care and/or home modifications is the Home Equity Conversion Mortgage. If you’re on the fence about making a commitment about getting a reverse mortgage, consider the pros and cons. The pros include getting cash for equity, establishing a line of credit for retirement planning, and a modest credit score requirement to qualify. The cons include potential negative implications for your estate and you’re not the required age of 62 or older. Be sure to speak with a financial advisor to help you determine if it’s the right choice for you.

 No matter how overwhelming your financial situation may become, avoid using credit cards to pay for long-term care. Between high interest rates and monthly payments, it can be difficult to pay down the debt when you’re on a fixed income. It’s always a better idea to speak to your doctor or financial expert to help you determine which payment options are best for you.

There’s no doubt about it: long-term care is costly. That means you need to start planning ahead as soon as possible to ensure that you’re comfortable and cared for during your golden years.



June 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.

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