Including Long-Term Care Planning in Retirement Planning

Advisers can help clients create a more holistic plan for retirement by becoming familiar with and including strategies to pay for long-term care.

Financial professionals are well-positioned to help individuals prepare for long-term care (LTC) expenses in retirement, HealthView Services says in a white paper, calling it a “decisive step to a truly holistic financial plan and secure retirement.”

Studies show that Americans are concerned about health care costs in retirement. And many mistakenly believe Medicare will pay for all LTC costs.

HealthView’s analysis reveals that an average, healthy 65-year-old male/female couple has a 75% chance of at least one spouse requiring some form of long-term care if each live to their actuarial life expectancies. “Regardless of the type of care required, those who fail to plan for LTC may face substantial medical bills with few means to pay other than by liquidating assets,” it says.

The white paper says the national average cost of a nursing home in 2021 is $100,913; for assisted living it’s $55,708; and for 44 hours per week of home health care, it’s $56,408. LTC expenditures can vary substantially between states and territories and also between metro areas within state lines. For example, the cost for one year in a nursing home is $61,090 in Oklahoma and $166,242 in Connecticut—a 172% difference.

HealthView says the first step to LTC planning is generating personalized answers to the following questions:

  • At what age may LTC services be needed?
  • What LTC coverage options are available?
  • What is the desired choice of LTC delivery?
  • How long are services typically needed?
  • How do existing health conditions impact when/how long someone will need care?
  • How much will services cost when care is required, including inflation?
  • In which state and metro area will services be required?

Financial professionals can familiarize themselves with a range of solutions that can help clients prepare for LTC while still leaving a legacy to children and other loved ones. The white paper discusses options such as LTC insurance, a life insurance policy, an LTC rider on an insurance product or self-insuring. Clients might need a combination of these strategies.

HealthView Services’ white paper, “Long-Term Care and Financial Planning,” can be downloaded from here.