I want to bring attention to an issue that many people overlook until it becomes both financially burdensome and emotionally stressful: long-term care.
Not medical treatment, but the daily support individuals often require as they age or face health challenges.
Understanding how long-term care works can significantly reduce future strain on you and your family, financially, logistically, and emotionally.
Let us walk through the essentials in a clear and straightforward way.
What Long-Term Care Actually Means (Not Just Nursing Homes)
Long-term care is the help someone needs when everyday tasks become harder because of aging, illness, or cognitive decline.
It includes two types of support:
Activities of Daily Living (ADLs) — the basics:
- Bathing
- Dressing
- Eating
- Toileting
- Transferring (getting in/out of a bed or chair)
- Continence
Instrumental Activities of Daily Living (IADLs) — the “living independently” tasks:
- Cooking
- Cleaning and laundry
- Medication management
- Handling finances
- Transportation
- Communication
And this care can happen in different places:
- At home with caregivers or home health aides
- Assisted living facilities (help with daily tasks + community living)
- Memory care units specialized for dementia
- Skilled nursing facilities for advanced medical needs
Here’s the crucial part:
Medicare does not cover long-term custodial care.
It only covers short-term skilled nursing care if you meet very specific conditions, including a recent inpatient hospital stay. After day 100, Medicare stops paying altogether.
This is why planning matters.
Why This Matters More Than Most People Realize
Long-term care is one of the biggest unfunded expenses in retirement — and the costs keep rising.
Here are the national median numbers (Genworth 2023):
- Home care: about $30–$35 per hour
- Assisted living: $4,500–$6,000 per month
- Memory care: $7,000–$10,000 per month
- Private nursing home room: $100,000+ per year
Most families pay these costs out of pocket.
And without a plan, people often:
- Drain retirement accounts
- Sell assets quickly
- Rely heavily on adult children
- Make care decisions under pressure instead of preference
When you plan early, you keep control — of your care, your money, and your family dynamics.
Your Main Options for Planning (Explained Simply)
There’s no one right way to prepare, but these are the major tools:
1. Self-Funding
You pay for care directly out of savings and investments.
Works best if you have a large retirement portfolio.
2. Traditional Long-Term Care Insurance
Pays for home care, assisted living, memory care, and nursing homes.
Premiums depend on age and health — younger and healthier is cheaper.
3. Hybrid Life Insurance With LTC Benefits
This is popular because there’s no “use it or lose it.”
- If you need long-term care → policy pays for care
- If you never need care → your family gets a death benefit
4. Annuities With LTC Riders
Your annuity income can increase (sometimes double/triple) when you qualify for long-term care.
5. Medicaid Planning
Medicaid pays for long-term care only if you meet strict income and asset limits.
It’s not just for low-income households — many middle-class families legally restructure assets to qualify (trusts, spend-down strategies, annuities).
But it’s very rule-heavy and varies by state.
A Conversation Worth Having With Your Family
It’s not about making decisions right now.
It’s about avoiding confusion later.
Talk about:
- Whether you prefer care at home or in a facility
- Who you trust to make medical decisions
- What assets you want protected
- Family health history (dementia, stroke, etc.)
- Whether you’re open to assisted living or want in-home care first
Families who discuss these things early avoid rushed, emotional decisions later.
Simple Steps You Can Take Right Now
- Look up long-term care costs in your state so you know what you’re planning for
- Ask a professional to review whether LTC insurance or a hybrid policy fits your budget
- Decide if you’d want care at home or in a facility
- Add long-term care as a line item in your retirement plan review
- Write down your top 3 priorities for future care