No one likes to imagine a time when they may need assistance with daily tasks, but as we grow older, the possibility of requiring long-term care becomes more likely. Planning for those potential costs before they arise can make a significant difference in how smoothly you navigate retirement and preserve your financial independence. Preparing for the costs of long-term care isn’t just a healthcare decision—it’s a key part of retirement planning that helps ensure your savings are positioned to support your changing needs. 

According to national estimates, about 70% of adults turning 65 will need some form of long-term care during their lifetime. That care could range from in-home support to assisted living or skilled nursing care, and the costs can vary widely based on the type of service and the location. Taking time now to assess your options can help reduce uncertainty later and keep your retirement plans on track. 

Understanding What Long-Term Care Involves 

Long-term care refers to a variety of services designed to meet the needs of individuals who are unable to perform basic activities of daily living independently. These activities may include bathing, dressing, eating, using the toilet, or moving around safely. 

This kind of care may be provided in the home, through adult day services, in assisted living communities, or in nursing facilities. Unlike medical care that is often covered by insurance or Medicare, long-term care is largely custodial and typically not covered under standard health plans. 

Understanding what types of care are available and their potential costs is the first step in preparing for the costs of long-term care. Knowing your options allows you to plan for a solution that fits your preferences and budget. 

Estimating Future Care Expenses 

Long-term care costs vary depending on geographic region, level of care needed, and duration of services. According to Genworth’s Cost of Care Survey, the national median cost of a private room in a nursing home was over $100,000 annually in recent years, and assisted living facilities often charge $4,000 or more per month. 

Even those who plan to receive care at home should be prepared for costs associated with home health aides, part-time caregivers, or home modifications. When planning your retirement, it’s helpful to estimate what level of care you might require based on health history, family longevity, and lifestyle choices. 

Building these projected costs into your long-term plan provides greater clarity and may help prevent the need to deplete savings or liquidate assets unexpectedly. 

Exploring Funding Options 

There are multiple ways to plan for long-term care expenses. Each option carries different benefits and considerations, depending on your financial situation and planning timeline. 

• Private Savings: Some individuals choose to self-fund long-term care using personal savings or investment assets. While this approach offers flexibility, it may place a significant burden on retirement resources if care is needed for an extended period. 

• Long-Term Care Insurance: This insurance is specifically designed to cover care that isn’t typically included in health or Medicare plans. It can help cover costs for home care, assisted living, or nursing facilities. Premiums vary based on age, health, and coverage level, so earlier enrollment often results in more affordable options. 

• Hybrid Policies: These policies combine life insurance or annuities with long-term care benefits. If you don’t end up needing care, the unused portion may pass to your beneficiaries. These options offer more flexibility, though they may require a larger upfront investment. 

• Veteran Benefits and Medicaid: For those who qualify, programs such as VA Aid and Attendance or Medicaid may provide financial support for long-term care. These programs have strict eligibility criteria, often requiring limited income or asset levels. 

Planning ahead allows you to consider all options and select a strategy that fits your needs and priorities. 

Discussing Preferences with Family 

Financial preparation is one part of long-term care planning—but personal and emotional considerations matter too. Talking with your loved ones about your preferences, such as staying at home versus entering a facility, helps them understand your wishes and reduces the burden of decision-making in the future. 

Being proactive in these conversations also opens the door for family members to provide input, ask questions, and feel more involved in the planning process. Clear communication can help avoid misunderstandings and ensure that everyone is on the same page. 

Integrating Long-Term Care into Your Broader Plan 

Long-term care planning shouldn’t be done in isolation. It’s most effective when considered within the context of your overall retirement strategy. For example, planning for care needs might affect how much you save, when you take Social Security, or how you allocate your investment portfolio. 

Preparing for the costs of long-term care may also influence estate planning decisions, especially if you wish to preserve certain assets for heirs or charitable giving. Reviewing your plan regularly with a financial professional helps ensure that your care strategy remains aligned with your broader financial picture. 

Adjusting as You Age 

Your needs, resources, and preferences will continue to evolve. That’s why it’s helpful to review your long-term care strategy periodically—especially after major life events, health changes, or shifts in your financial situation. 

Staying flexible allows you to respond to new information and maintain control over your future care decisions. The earlier you begin preparing, the more options you’ll likely have available to you. 

Preparing for the Costs of Long-Term Care Can Strengthen Retirement Confidence 

By preparing for the costs of long-term care in advance, you can reduce financial uncertainty and make more informed decisions about how to support your health and lifestyle in later years. Thoughtful planning today can help preserve your resources, honor your preferences, and give you more control over the future. 

At Floyd Financial Group, we help clients evaluate care needs, explore funding options, and integrate long-term care planning into a broader financial strategy. Contact us today to start the conversation about how to plan for future care needs with clarity and confidence.