5 Long-Term Care Questions to Ask
Key Points – 5 Long-Term Care Questions to Ask
- What Is Long-Term Care?
- Planning for Long-Term Care in Retirement and While You’re Still Working
- Average Cost of Long-Term Care
- 5-Minute Read | 35-Minute Watch
Planning for the Unexpected, Including Long-Term Care Events
A key component of retirement planning is preparing for the unexpected. In a perfect world, you (and your spouse, if you’re married) will remain healthy well into retirement and enjoy it doing what you love, with the people you love. But what if you (or your spouse) come down with a critical illness, sustain serious injuries from an accident, or have a stroke. Suddenly, long-term care is needed. Long-term care events don’t just impact people in retirement either. Let’s review what long-term care is and why it’s important to consider long-term care insurance while you’re working and in retirement.
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5 Long-Term Care Questions to Ask
Long-Term Care Question No. 1: What Is Long-Term Care?
Long-term care consists of the services and support that assist someone with daily activities rather than health care. Those activities may include assistance with getting dressed, bathing, preparing meals, wealth management, etc. If you were unable to perform basic day-to-day tasks, do you have a spouse, child, sibling, or other family member who could help you with those activities every day?
Before you answer that, don’t just assume that one of your loved ones has the time and ability to care for all your needs. Consider the physical and emotional toll that could have on them. That’s why it’s important to consider purchasing long-term care insurance or making sure you have enough saved to self-insure in the event you require long-term care.
Long-term care is typically provided at continuing care retirement communities, nursing homes, adult day cares, and even at home. The managing director of our Chapel Hill, North Carolina office Larry McManus, CFP®, CFPC®, MBA shared on our Modern Wealth Management Educational Series and America’s Wealth Management Show has he also served on the board of the Carol Woods Continuing Care Retirement Community. He notes that at many CCRCs, residents tend to start in independent living, but then progress to assisted living and potentially skilled nursing as their needs for care change. Check out the timeline below that he and Senior Advisor Chris Demetropoulos, RFC® reviewed during our educational series that illustrates the type of care that an individual might need, depending on how independent/dependent they are.
Long-Term Care Question No. 2: How Much Does Long-Term Care Typically Cost?
Now, let’s answer the long-term care question that everyone wants to know the answer to—how much could it cost? Well, it depends on several factors, but the costs can mount quickly. Since long-term care rates aren’t fixed, they can go up as you get older. It’s also important to remember that you can be disqualified from receiving long-term care insurance if you have health issues or pre-existing health conditions.
The cost of long-term care also varies not only depending on the type of care you need, but where you live. Check out the national averages of long-term care costs, according to Genworth and CareScout’s 2024 Cost of Care study.1
FIGURE 2 – Average Cost of Long-Term Care – Genworth and CareScout’s 2024 Cost of Care Study
The costs shown in Figure 2 are just a per-month average. One of the challenges of planning for long-term care is determining how long you (and/or your spouse) may need it. That’s a big unknown. According to the American Association for Long-Term Care Insurance, women tend to need long-term care for an average of 3.2 years while men need it for an average of 2.3 years.2 But that doesn’t mean that that’s how long you and your spouse will require long-term care. Ideally, you won’t need it at all, but you could need it for longer than the average duration.
Long-Term Care Question No. 3: What Other Factors Impact Long-Term Care Costs?
Let’s say that you end up needing to spend two years in a nursing home and you want a private room. If you go by the national average from Genworth/CareScout’s Cost of Care study, that would have cost $255,504. But what if you need in-home care or assisted living for a period of time in addition to the two years of nursing home care? Also, keep in mind that data was from 2024, so the national average in 2025-2026 will likely be higher just due to inflation. CareScout’s website also allows you to calculate potential long-term care costs based on where you live and when you might need it.3
Long-Term Care Question No. 4: What Will Government Programs Pay for?
According to the National Council on Aging, almost 70% of people who are 65 will end up needing long-term care.4 Well, 65 also is the age that most individuals become eligible for Medicare. Here’s the catch, though: long-term care costs typically aren’t covered by health insurance or Medicare.5
Medicaid does offer some coverage for Americans who struggle financially or have extremely high medical bills.6 It’s possible that you might need to spend down your assets to be eligible for Medicaid. Keep in mind that Medicaid coverage also varies depending on what state you live in. Additionally, if you’re a veteran, the Department of Veteran Affairs may help with providing long-term care coverage.7 Make sure you’re aware of potential private financing options and government programs that may help with paying for long-term care costs.
It’s important to understand that how you pay for long-term care is going to vary depending on your financial situation and needs. If you plan to self-insure long-term care in the event that you need it, how will that impact your overarching financial plan? Or do you intend to purchase long-term care insurance?
Types of Long-Term Care Insurance
The type of long-term care insurance you buy is also going to depend on your needs, as there are many different types of LTC policies. The three primary types of long-term care insurance are:
- Standalone long-term care insurance: This option gives you flexibility to elect the benefit amount, benefit period, and elimination period that best meets your needs.
- Long-term care insurance rider: When a long-term care rider is added to a current insurance policy, such as a life insurance policy, the rider piggybacks off that policy and offers additional coverage for long-term care once you need it. If you pass on without requiring long-term care, this option provides a death benefit to your beneficiaries.
- Linked-benefit long-term care insurance: This is another hybrid option that provides dual protection in the form of LTC coverage and a death benefit for your beneficiaries.
Long-Term Care Question No. 5: How Can You Prepare?
Can you start to see why long-term care is something that needs to be planned for? Not factoring in the potential long-term care stay for you and/or your spouse into your financial plan can put you into a serious bind if one is needed. The same goes for adult children who find themselves as members of the sandwich generation, where they’re potentially caring for aging parents as well as their children.
Having a conversation with your family about long-term care planning might not be the most enjoyable conversation you’ll have with them. However, what if you suddenly have a stroke, critical illness, or get into a serious accident which requires a long-term care event? Talking with your family about that possibility may help prepare them for how to handle a very difficult situation rather than making uninformed decisions under a lot of stress that may go against your wishes as well.
Factoring Long-Term Care into Your Financial Plan
Along with talking about long-term care with your family, it’s important to address long-term care with your financial advisor. If your advisor hasn’t discussed long-term care planning with you, review these five long-term care questions with them and ask them how it could impact your financial plan.
At Modern Wealth, our financial advisors are supported by professionals who specialize in insurance, investment, estate, and tax planning. Our team of professionals collaborate on behalf of our clients to address key financial planning considerations, such as long-term care planning.
Stress testing your financial plan for a potential long-term care event can do two things. One, it may help you from an income planning perspective so you can determine how you want to pay for long-term care. Two, it may help with giving you and your loved ones peace of mind.
Do you have any questions about long-term care planning and/or these five long-term care questions to ask? Start a conversation below with our team to address long-term care planning within your overarching financial plan. We’re ready to help you enjoy today and prepare for tomorrow — connecting you with the people and causes that you’re most passionate about.
Resources Mentioned in This Article
- Stress Testing Your Financial Plan
- The 4 Phases of Retirement
- Paying for Long-Term Care: Insurance vs. Self-Insuring
- The Medicare Annual Enrollment Period: Understanding Your Options
- Financial Planning for the Sandwich Generation
- 5 Tips on Caring for Aging Parents
- What Is a Good Monthly Retirement Income?
Other Sources
[1, 3] https://www.carescout.com/cost-of-care
[2] https://www.aaltci.org/long-term-care-need/
[4] https://www.ncoa.org/article/when-should-you-start-investing-in-long-term-care-insurance/
[5] https://www.medicare.gov/coverage/long-term-care
[6, 7] https://www.nia.nih.gov/health/long-term-care/paying-long-term-care
[8] https://www.ncoa.org/article/what-are-the-three-types-of-long-term-care-insurance/
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The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.
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