Every financial decision is an opportunity to create a path forward—no matter how complex the situation. Long-term care is one of those subjects that’s often pushed to the back burner because, frankly, it’s hard to think about. But like so many parts of retirement planning, avoiding the conversation doesn’t make it go away. And in the end, by giving it your attention now, you put yourself in the best position possible to control your own destiny.
Conversations Can Break the Ice of Uncertainty
When people think about retirement, the first images that come to mind are usually joyful: travel, family, hobbies, freedom. And those are all important parts of the story. But there’s another side of retirement, aging. This chapter can be one of the most meaningful in retirement, but it is often one filled with questions about mobility, health, and the unknown.
What if you need help with daily living? What if you need extended care? How will you pay for it? These questions can create a fearful feeling of uncertainty, and in the face of fear it is ever so tempting to turn, run, and deal with it later.
When it comes to “managing uncertainty” often times the first step is the hardest, simply looking the question in the face and ignoring the desire to only think about it if the time comes. That’s really what long-term care planning is about—recognizing the very real risks that come with aging and being proactive. Putting a plan in place to respond rather than react.
What Is Long-Term Care, Really?
It important to understand the distinction between long-term care and acute care. A basic understanding of each and how Medicare impacts your health care coverage during retirement, can help you plan for and manage financial risks associated with both.
Acute care refers to short-term medical treatment for serious or urgent conditions—such as surgery, emergency care, or hospitalization for an illness. These costs are typically covered by health insurance or Medicare, especially when the treatment is medically necessary and time limited.
When people hear “long-term care,” they often imagine a nursing home or full-time care facility. But in reality, long-term care encompasses a wide range of services and support. The classic definition—often used by insurance companies—refers to help with two or more of the six Activities of Daily Living (ADLs): bathing, dressing, eating, toileting, transferring (getting in and out of bed), and continence.
But long-term care support can also mean help with groceries, managing medications, paying bills, or simply maintaining the home. These are the kinds of needs that don’t always require medical intervention but do require assistance—and they all come with a cost. Because long-term care is generally not covered by Medicare beyond a short rehabilitative stay, it represents a different kind of financial risk.
What Are Your Options?
Once you acknowledge the risk, the next step is understanding how to manage it. There are three main options:
- Self-Insure: This means covering the costs of care yourself from your assets. For individuals with significant resources—typically $2 million or more in net worth—this can be a viable strategy. However, it requires careful planning and discipline to ensure those assets are preserved for potential future use.
- Transfer Risk Through Insurance: Traditional long-term care insurance has become more expensive and less accessible in recent years. As a result, many people now opt for hybrid policies—usually life insurance with a long-term care rider. While these policies still require a significant investment, they can offer peace of mind by earmarking funds specifically for care if it’s needed.
- Rely on Medicaid: Medicaid does cover long-term care, but only after most personal assets have been spent down. There are planning strategies aimed at protecting assets to qualify, but these often come with ethical and practical complexities, including surrendering control over your financial future.
- Other cost sharing strategies: Another strategy worth considering for some is moving to a Continuing Care Retirement Community (CCRC). Certain types of CCRCs—called “life care communities”—offer a way to manage long-term care costs through fixed monthly fees. In these models, your costs remain stable even if your care needs increase, offering a unique kind of cost predictability. Additionally, CCRCs across the country are beginning to offer CCRC From Home/CCRC without Walls membership programs, that can have some level of cost sharing for long-term care costs built int. While CCRCs aren’t the right fit for everyone, they can serve as an effective form of risk transfer and a thoughtful setting solution for aging.
Cost and Probability: Why Is this Worth Caring About?
No one can predict the future, but the odds of needing some form of long-term care are significant. It’s estimated that about 50% of Americans will need long-term care at some point, and roughly 10% will experience costs exceeding $250,000. The average lifetime cost of care for someone with Alzheimer’s or dementia, for example, is over $400,000, according to the Alzheimer’s Association.
Those are sobering figures, but planning isn’t about scaring you—it’s about preparing you. As we often say to our clients: It’s better to be two years too early than two minutes too late.
Bringing What Matters Most into the Equation
What makes long-term care planning so difficult isn’t just the financial component—it’s also the emotional one. These conversations force us to confront aging, illness, and vulnerability. And yet, by starting these discussions early and returning to them often, we create space for better decisions.
It is important to not simply just run the numbers, it is essential to ask yourself the personal questions, too. What does aging well look like for you? Who will be in your support network? What does independence mean to you in your 80s or 90s? By integrating these conversations into every phase of your retirement planning, the question of long-term care becomes less of a “what if” and more of a “what is important to me.”
Awareness of Trade-Offs
There’s no one-size-fits-all answer. A plan that works well for a family with $5 million in assets will look different than one for someone with $1 million. That’s why our role is to help clients understand the trade-offs.
Do you spend more now and hope you’ll be fine later? Or do you tighten up today in exchange for more certainty tomorrow? Neither answer is wrong. But it’s our job to help look at the whole picture—so that you can make an informed, values-based decision.
Looking Ahead
A good long-term care plan isn’t about predicting every outcome. It’s about being approximately right and adjusting as you go. We may not know what the future holds, but by addressing the risks head-on, we can build a plan that prioritizes security, peace of mind, and choice.
If you’re ready to talk about what aging gracefully and confidently could look like for you or a loved one, we’re here to help—realistically, optimistically, and always with your values in mind.
Let’s start the conversation. Contact Curio Wealth.
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