5 Questions You Need to Ask About Long-Term Care

by Hazel Bridges

Long-term care is one of the largest expenses seniors face in retirement. Unlike living expenses, there’s no way to know exactly what long-term care will cost you. However, you shouldn’t let unpredictability stop you from preparing for this important expense. Planning for long-term care costs is one of the smartest things you can do to ensure you’re cared for in old age.

These are five questions you need to ask as you think about long-term care.

Planning for Long-Term Care

Will I need long-term care?

According to Morningstar, 52 percent of today’s 65-year-olds will need long-term care in their lifetime. For the majority, long-term care needs will be brief: On average, women require 2.5 years of care and men 1.5 years. Only 14 percent require long-term care services longer than five years.

These factors increase your likelihood of needing care:

  • Being female.
  • A long lifespan.
  • Living alone.
  • A personal history of health problems.
  • A family history of hereditary health conditions.
  • Poor lifestyle habits.

How can I reduce my long-term care needs?

There are things you can do to reduce your risk of needing long-term care or minimize the amount of care you need such as:

  • Modify your home: An unsafe home increases the risk of becoming disabled from a fall. If your home isn’t accessible for people with disabilities, you may be unable to return home after an illness or injury.
  • Strengthen your support network: Without a support network, you have to rely on paid caregivers for assistance. Moving closer to family or strengthening your local support system means you can call on loved ones for minor assistance.
  • Improve your lifestyle: A healthy, active lifestyle is important at every age. You can reduce your risk of disability by eating a healthy diet, exercising regularly, maintaining a social life and avoiding excessive alcohol consumption.
  • Upgrade your insurance: Once you’re 65, you’ll qualify for Medicare benefits, but supplementing these benefits with a Medicare Advantage plan can be a big help. Providers like Anthem Blue Cross and others offer plans that cover dental, vision, and hearing care, membership to wellness programs, and prescription drugs.

What are the long-term care options?

The long-term care costs you’ll incur depend on the type of care you need. These are the most common long-term care solutions along with average annual costs:

  • Adult day care ($18,720): Non-residential day care for seniors living in the community.
  • Assisted living ($48,000): Residential care with light assistance for daily activities, household tasks, and medical support.
  • Home care ($50,336): Care services provided in a senior’s home, which could include personal care, companionship and household help.
  • Memory care ($60,000): A type of assisted living designed for seniors with dementia.
  • Nursing home ($89,297 semi-private room; $100,375 private room): Residential care with 24/7 support for personal and medical needs.

Paying for Long-Term Care

What will long-term cost?

A person who is 65 today can expect to incur $138,000 in long-term care costs. Seniors diagnosed with dementia are one big exception: lifetime care costs for a senior with dementia can be hundreds of thousands, and a lot of those costs must be paid out-of-pocket.

How can I pay for long-term care expenses?

Outside of short-term, rehabilitative stays in skilled nursing facilities, Medicare does not pay for long-term care. While Medicare will pay for medical services in a long-term care setting, non-medical or custodial services are not covered. Learn more about what Medicare does and does not cover at AARP.

Without Medicare coverage, seniors and their families must find other ways to pay for long-term care. Common options include:

  • Long-term care insurance: Long-term care insurance provides coverage specifically for custodial care services. Long-term care insurance premiums are costly, but adults can save by purchasing a policy in their 50s.
  • Savings and investments: Rather than buying an insurance policy, individuals can self-insure by increasing retirement savings.
  • Personal assets: Seniors can sell or surrender a whole life insurance policy, apply for a reverse mortgage or sell a home. If selling a home, use a home-value estimate to ensure the home’s value is enough to pay for long-term care.
  • Medicaid: Low-income seniors with few assets can receive long-term care coverage through Medicaid.

As you can see, long-term care is a major expense. If you’re not financially prepared, an illness or disability could derail your entire retirement. Whether you’re 45 or 65, it’s not too late to start preparing your finances for long-term care.