How to Pay for LTC in Retirement: 5 Ways to Get Care

How do you pay for nursing home care, dementia, or other forms of long-term care (LTC) in retirement?

This is one of the biggest challenges you face because you can’t predict whether or not you’ll face any expenses. And if you do need care, how long will it last and how much will it cost?

All you can do is estimate (or find a better crystal ball), and it’s wise to anticipate how you might pay for any expenses that arise.

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Paying for retirement homes or in-home care can get pricey as your needs increase. So, will Medicare pay for LTC along with everything else? The answer is probably no.

Medicare offers only small relief, and only in specific situations. You typically need to find other sources, such as self-funding out of your own assets, using insurance, tapping home equity, or going on Medicaid for LTC.

Roughly half of all retirees won’t spend any money on LTC, according to one Vanguard study (slide shown in video). In those cases, it’s possible that they never had issues or that unpaid caregivers like friends and family were able to carry the load. Unfortunately, that’s not the case for everybody.

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Note that you might have other sources available, so it’s critical to explore all of the additional opportunities and risks long before the time comes to pay for care. And remember that LTC may be necessary at any age. You may be unable to do critical activities of daily living (ADLs) due to an injury, accident, illness, or for other reasons.

More on this topic:

Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.

CHAPTERS
00:00 Big Unknowns
00:53 LTC Basics
02:49 Will You Pay, and How Much?
05:19 Does Medicare Pay for LTC?
07:10 Unpaid Care - Friends and Family
08:30 Self-Fund - Pay Out of Assets
10:58 LTC Insurance
12:59 Home Equity - Reverse Mortgage or Downsize
14:25 Life Insurance - Loans & Accelerated Death Benefits
15:38 Medicaid

IMPORTANT:
Always verify directly with your service providers and/or Medicaid/Medicare staff before assuming anything. Rules are complicated and they may change. Your benefits may depend on various factors, including your location and eligibility, any coverage you might purchase, ongoing recordkeeping and reporting, and much more. It's impossible to cover everything you need to know in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. This video is not a substitute for individualized, personal advice. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. “Likes” should not be considered a positive reflection of the investment advisory services offered by Approach Financial, Inc. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.

[punisher]

I appreciate your content wished you posted more I have went back and watched your previous content after finding your channel a couple of months ago. As a 56 year old this topic concerns me and one that cared for both parents before they transitoned.

[alphamale]

Very professional presentation. Thanks.

[davidfolts]

Excellent content, Justin. Thank you for your time spent creating it!

[erickarnell]

Trying to self insure for something like long term care is difficult.

It makes sense to at least investigate if you can work with an insurer early to better mitigate risk.

[terryB]

Excellent video.. I currently have been taking care of my Mom she's alert but can't clean her house laundry pet care daily meals. She couldn't afford the assisted living facility that I currently work now prn. Hopefully I age well.like she and my late Father 95yr. Thsnkyou for a Great Video

[LIsaZImmerman-su]

Justin, is the cost of memory care deductable.

[youarehere]

That's one reason to have children, or a young wife.