How to Prepare for Long-term Care: What Are My Options? - United Benefits

Preparing for long-term care expenses is an important part of your retirement planning process. It’s not an enjoyable topic to discuss, but it is necessary. In the US, someone who turns 65 today has a 70% chance of needing some type of long-term care as they age. According to the Department of Health and Human Services, the average use of long-term care services is three years.

It’s important to plan for long-term care because it can be really hard on your finances and it can take a toll on your family too. When long-term care is needed, it will be much easier to manage if you have a plan in place ahead of time. It’s also a way to make sure that your loved ones don’t have to deal with the emotional and physical stress of trying to figure out how to give you the care you need.

Home Health Care

The most common type of long-term care is personal care and may be part of home health care. This is when you need assistance with activities of daily living, including bathing, dressing, grooming, using the toilet, eating, and moving around. Home health care may be covered by your insurance if certain qualifications are met, which can vary depending on if your insurance is private, group, or through Medicare.  If these services are not covered through your insurance or you do not meet the qualifications, you can receive these services through family and friends or by paying for the services through agencies, nurses, private caregivers, or other local organizations.

Full-time Nursing Care

The second most common type of long-term care is full-time nursing care. If you need more consistent care or are not able to care for yourself, you may need long-term care in a nursing facility. This is usually reserved for people with extended chronic illnesses, Alzheimer’s, or debilitating diseases that make living at home difficult or impossible or when 24-hour care is necessary.

Cost of Long-term Care

Any kind of long-term care is very costly. As of 2021, the average cost of home health care was about $60,000. Adult day health care services were approximately $20,000 per year and private nursing home care was about $90,000 per year. If unprepared, any resources or assets that you have will need to be used to pay for this care.

Your Long-term Care Options

Government Programs

If you have low income and little assets, you may qualify for Medicaid to pay for the costs of long-term care. Medicaid will cover long-term care services, but you have to meet the income and asset qualifications of your state. Typically, if you are over income or have too many assets, you will be required to spend these resources in order to qualify. If you want more information about this option and what the income and asset qualifications are in your state, you will want to contact your state’s Medicaid department directly.

Long-Term Care Insurance Policies

You can purchase long-term care insurance policies. The younger you are when you purchase these policies, the more affordable they are. You will pay the same annual premium for life. Traditional long-term care policies can be difficult to find, have strict underwriting requirements, and are typically the most expensive way to provide long-term care.

Life Insurance

Some life insurance policies have the option to add a long-term care rider. This rider will allow you to use a portion of your death benefit to pay for long-term care services when they are needed. The cost of this option will vary depending on your age when you purchase the life insurance policy, the death benefit selected, and other factors determined by your life insurance policies.


When you are preparing for retirement, a retirement specialist can help you explore your options in managing your TSP, 401K, or other retirement funds. One option is to roll those funds over into an annuity. This can protect your funds from market fluctuations, provide lifetime income, and can include a long-term care rider. In annuities, the long-term care rider will double your monthly income if you need long-term care services. The income amount will depend on how money was put into the annuity at the time that the annuity was opened.

How to Prepare for Long-term Care Costs

The best way to prepare for long-term care is to discuss your concerns with a professional who can review your specific scenario and find the best option for you and your family. Fill out the form below to get in touch with a United Benefits Retirement Specialist.

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