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How can ignoring Long-Term Care derail your retirement?

How can ignoring Long-Term Care derail your retirement?

| February 17, 2023

Most people don't realize the high chance they have of needing this care and how expensive it is. Failing to plan for this expense can derail your retirement plan.

Since long-term care is typically not covered by traditional health insurance, the costs must be paid out of pocket. The costs of long-term care vary widely based on the individual's needs and location, but can range from $50,000 to $200,000 per year. In the Los Angeles, CA area the median cost of a home health aide is $70,928 annually.1 This expense on top of other retirement costs such as housing, food, and medical expenses can quickly deplete a person’s savings.  It’s important to plan for long-term care so as not to compromise retirement savings.

Benefits of Long-Term Care Advance Planning:

  • You can stay in your own home or a setting you chose for your care.
  • You maintain your dignity and independence.
  • You protect your retirement assets and income.
  • You relieve caregiving pressure on your family members.

Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life.



Long-Term care can include a variety of services. These services can include: nursing care, personal care, home health care, respite care, hospice care, adult day care, and medical equipment. Depending on the individual’s needs, a combination of these services might be necessary.  Some may choose to purchase long-term care insurance to cover these needs. 




  • Self-Funding: You can dedicate a portion of your portfolio to cover your long-term care needs. The cons may be inflation and market volatility risks.
  • Traditional Long-Term Care Insurance: This insurance option can help you have access to the care you want and not put your retirement savings at risk. The cons are the longer you wait, the more expensive these plans can cost.
  • Long-Term Care Insurance linked with an Annuity or Life Insurance: This hybrid approach can offer you some benefits and flexibility. There can also be a death benefit associated with this option. The cons are these additional benefits or riders may only be available for an additional cost.

It’s important to research the options available and plan ahead to make sure you have enough money saved to meet your long-term care needs in retirement.

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