Should You Have a Plan for Long Term Care?

September 21, 2018

Should You Have a Plan for Long-Term Care?

This is one of those questions that seems to nag everyone approaching retirement. All of us know someone, whether a family member, family friend, co-worker or someone who has a story about a person they know that spent their last dime in a long-term care facility. But, we then start to rationalize how it could happen to them, but won’t happen to us, Right? But what if? What if it happens to you, are you prepared for the aftermath?

Well, let me give you some numbers:

  • 15 million Americans are expected to have a long term care need by 2050
  • 3% of individuals turning age 65 are expected to have a Long Term Care illness during their lifetime.
  • 57% of women over age 65 will have a Long Term Care need during their lifetime. *

Those are some big scary numbers! Especially when you think that over half of us will probably experience this during our lifetime. So what should you do? How do you plan for this? The first step is to  acknowledge the problem is real. Once we do that, it’s time to act. Put a plan in place to deal with the situation if it does happen.  My suggestion is to first get out your WILL and/or Trust documents to see if you have a properly drafted Power of Attorney. The POA can help with many things as they relate to long term care.

First and foremost it will give a person the authority to make decisions for you should this happen. Without a properly drafted POA, you could be in a hospital waiting on a medical procedure with no one able to approve the procedure for you. While you are meeting with your attorney, ask them what other documents you need to minimize the affect of a LTC stay on your estate.

Next, it’s time to think about how you would pay for an extended stay in a nursing home. Would you be able to self-fund?

  • 2% of individuals turning age 65 between 2015-19 will spend more than $250,000 on LTC in their lifetime.*
  • Seniors in Louisville can expect to pay, on average, right around the national medianfor nursing home care. In 2017 nursing home residents paid $101,472 for private residences and $83,952 for semi-private rooms for the year in Louisville KY.**

It really depends on how you’ve structured your investments. If you have an extra $250,000 net of taxes, then you could use cash to pay for your stay in a facility. If you don’t feel that flush, perhaps it’s better to plan on some type of insurance protection to transfer the risk to an insurance company.  Long Term Care Insurance companies have seen an increase in claims by over 450% between 2000 and 2017.*** With so many individuals using the policy benefits, you can bet the companies are getting a premium for the coverage, so it’s not going to be cheap. Another potential option would be a Combo Policy. These are Life Insurance policies that have a Long Term Care benefit rider. Most will allow you to use the death benefit if you need it while you are alive. If you never need the coverage, then your family will receive a tax free death benefit when you pass. To me, this is the best way to make sure your family receives a benefit.

The bottom line is this planning is critical to all who retire. You may be able to create a plan without using any insurance. Perhaps working with your attorney, you can set things in motion so that if you need to go to a facility, Medicaid could pick up your cost. Or maybe you want the coverage, we can help with this or contact your advisor. They should be able to point you in the proper direction for your needs.

Finally, 3 ways we may be able to help.

    1. Design your free Retirement 360 Game Plan.
    2. Setup a complimentary 15-minute phone retirement readiness assessment.
    3. Join me at one of my upcoming workshops. For a complete list you can go to and click on the Events Page to see a list of upcoming workshops.