Consider long-term care costs

Many people welcome the chance at prolonged life, but fewer are ready to deal with the ailments and chronic conditions that often accompany the latter years.

Article highlights

  • Growing need for long term care
  • Care options
  • Covering the costs

It can feel difficult if you lose memories or experience limited mobility with a long-term illness—and even more so when loved ones must determine how to care for you. But a family isn’t alone in shouldering that responsibility.

As baby-boomers and future generations live longer, the need for long-term care is expected to rise. The cost of care for those with disabilities or chronic conditions can be one of their largest expenses in retirement. That’s why understanding long-term care services and their costs  is an important part of planning for your future.


What are the options for care?

Chronic illnesses can be costly. While family members may opt to take on the role of caregiver for loved ones, there are various services that can help with long-term care needs. Many retirees are surprised to learn that Medicare and Medicaid are limited in what they cover.


Nursing homes offer temporary or permanent services for those who need more medical-based care, such as rehabilitation or help with respirators. A private room in a nursing home costs more than $99,000 a year (national average). Medicare only covers up to 100 days of this type of care1 and the remaining cost can be an extensive cut into savings. 


Designed to assist those with minimal needs and keep them as independent as possible, assisted living facilities vary. On average, a studio apartment can cost nearly $48,324 per year, while a two bedroom apartment nets out at more than $57,000 per year.


For those who prefer to receive care at home, the national average hourly rate for a home health aide is nearly $23 per hour, while skilled home health care rates are significantly greater, with the national average fee for a registered nurse at $139 per hour. Some retirees may need short-term care while they recover from an illness or injury. Medicare will cover the cost of having nurses or therapists come to your home, but it is limited to 35 hours per week, unless a doctor helps you qualify for more care.

Covering the costs

Creating a financial plan for long-term care now helps offer flexibility in the options for services and options to help cover the cost other than dipping into your retirement savings. Expenses for long-term care could cause you to draw down on retirement savings quicker than planned; the right plan can help hedge the impact of costs.

Long-term care can be a difficult topic to discuss. But if it’s left unaddressed, it can have an emotional, physical, and financial toll on a family. Advisors estimate that clients who experience a long-term care event and don’t have protection in place could draw down their retirement savings at rates two to three times faster than planned. 

Get more information on long-term care planning and talk with a financial advisor about how you can plan for these expenses.

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