The Importance of Long-Term Care Planning
Doctor touched LONG TERM CARE text and working with modern computer

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The statistics on longevity show that people are living longer and will likely need long-term care (LTC) at some point in their lives. The unknowns each of us faces are how many years we will need LTC and what it will cost. With the cost of LTC increasing year over year, not considering how it will affect your retirement savings can be devastating to you later. By the numbers, here are some surprising statistics about LTC:

  • 70%: Percentage of people turning age 65 who will need some type of long-term-care services in their lifetimes. 
  • 48%: Percentage of people turning age 65 who will need some type of paid long-term-care services in their lifetimes.
  • 24%: Percentage of people turning 65 who will require paid long-term care for more than two years.
  • 15%: Percentage of people turning age 65 who will spend more than two years in a nursing home.
  • 3.7 years: Average duration of long-term-care need, women.
  • 2.2 years: Average duration of long-term-care need, men.
  • 67.9%: Percentage of people in long-stay nursing facilities who are women.

Is Long-Term Care right for you?

Your financial professional has software to help formulate a financial plan with the assumed costs of LTC and how it will impact your retirement nest egg. After your financial plan’s results, it’s up to you to decide if you should consider purchasing LTC insurance or not. However, remember that the cost of LTC will likely increase over the following years:

  • $105,850: Median annual nursing-home cost, private room, 2020.
  • 13%: Estimated percentage of individuals age 65 today who will incur out-of-pocket long-term-care costs of between $0.01 and $50,000 during their lifetimes.
  • 11%: Estimated percentage of individuals age 65 today who will incur out-of-pocket long-term-care costs of between $50,000 and $150,000 during their lifetimes.
  • 4%: Estimated percentage of individuals age 65 today who will incur out-of-pocket long-term-care costs of between $150,000 and $250,000 during their lifetimes.
  • 9%: Estimated percentage of individuals age 65 today who will incur out-of-pocket long-term-care costs of more than $250,000 during their lifetimes.
Source: Morningstar. 100 Must-Know Statistics About Long-Term Care: Pandemic Edition

Trust Trajan Wealth

There are hybrid LTC insurance policies that cover more than just nursing home care. Once you have the information from your financial plan, it’s time to research LTC insurance policies and the companies that provide the insurance for this specialized type of care.

Your financial professional can help you plan for your retirement and the possible need for long-term care. Reach out to them to find out more about long-term care insurance options available today.

We are here to help! Our financial professionals can help you navigate Medicare and design a plan for your healthcare expenses in retirement. Contact us today to get started! 

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