6
Most people know someone who needs help with daily activities as they get older, such as washing, dressing or getting around the house safely. Long-term care is one of the biggest unfunded risks in retirement, and ignoring it can quietly undermine even a well-constructed investment or income plan.
The real risk is not dying too quickly
When people think of insurance, they often think of life insurance that pays out when they die. Long-term care turns that care upside down: the real risk is that you live a long time, but need help along the way.
That assistance can take many forms: care in your own home a few days a week, adult day care so a spouse or child can continue to work, assisted living when home is no longer the safest place, or full nursing home care for more complex medical needs. None of these are cheap, and several years of care can rival the cost of a home.
‘My children will help’ and other myths
Many people mentally place long-term care in a vague “family will handle it” bucket. That usually means adult children step in as unpaid caregivers while juggling their careers and their own families, often leading to burnout, strained relationships and difficult choices about who will work less to provide care.
Other common assumptions can backfire:
- “Medicare will cover it.” Medicare is intended for short-term medical problems, not long-term care over months or years.
- “I have good health insurance.” Health coverage typically pays for doctors, hospitals, and procedures, and not for ongoing assistance with daily activities.
- “I’m just using my savings.” That may work for some wealthy families, but even they often prefer it that way lever their capital by transferring part of the risk to an insurance company, so that one long-term and expensive healthcare event does not undo decades of careful wealth accumulation.
A better way to think about it: Long-term care planning is less about protecting assets per se and more about protecting options, where you receive care, who provides that care, and how much control you have over those decisions.
A story of two retirements
Imagine two sisters, both retired and quite comfortable.
Karen assumes that she will “figure it out” if she ever needs care. At the age of 78, she falls and will need help with bathing and safe exercise for the next few years. Her daughter works less to provide care at home, until it becomes too much for her. Ultimately, Karen moves to a facility she and her daughter can afford, not necessarily the one they would have chosen if money were no object. Her retirement income plan, originally intended to cover living expenses and travel, now needs to be reworked to cover long-term care bills.
Linda, her younger sister, started talking about long-term care in her late 50s. She didn’t know what type of solution she would ultimately use, but she did know that she did not want to burden her children financially, that she wanted the ability to receive home care for as long as possible, and that she wanted her investments to be focused on income and legacy, rather than the cost of emergency care.
When Linda, in her 70s, has her own health event, she and her husband already know what her coverage will pay for and how to access it. Her children are still involved in decisions, but they aren’t forced to become full-time caregivers or struggle with figuring out finances. The biggest difference between the sisters isn’t luck, but that someone had a plan before she needed it.
Long-term care planning has evolved
Years ago, planning was virtually synonymous with traditional, standalone long-term care insurance. These policies are still important to many people, especially if they qualify for state partnership programs, where available, which can help protect more assets if Medicaid is ever needed.
Over time the landscape has broadened. Today, many families address the risk using a mix of strategies, such as:
- Traditional long-term care coverage specifically designed for healthcare expenses
- ‘Hybrid’ or ‘linked benefit’ life insurance policies that can accelerate death benefits or provide separate care pools
- Annuity-based solutions that can provide better benefits when long-term care is needed
They all work differently in terms of underwriting, flexibility, tax treatment and what happens if you never need care. The point is not that one is “best” for all, but that there are now more ways to address the risk, including options for people who were previously turned away or uncomfortable with “use it or lose it” designs.
Why it pays to start early
The best time to plan long-term care is usually when you are healthy enough and don’t feel an urgent need to do so. Starting earlier generally means more options, potentially more favorable prices and a better chance to integrate long-term care into your overall retirement and estate plan.
Waiting until “after the next thing” (retiring, paying off the mortgage, getting the kids off to college) often turns into never. Long-term care is one of those risks that doesn’t get any easier to solve over time.
A quiet but crucial part of your retirement plan
Long-term care planning is not about fear or dwelling on worst-case scenarios. It’s about designing a retirement that remains dignified and flexible, even if your health doesn’t follow the script. It’s about giving your future self and your family clarity around three questions: who will provide care when you need it, where you would prefer to receive it, and how it will be paid for without derailing everything else you’ve built.
These questions don’t need to be answered perfectly on day one, but they deserve more than a shrug of the shoulders and the hope that “things will work out.” If you haven’t yet incorporated long-term care into your own planning, consider this your invitation to start the conversation with a professional who can assess your age, health, assets, and goals, guide you through the types of solutions currently available, and help you decide if now is the right time to implement a strategy.
You may never need extensive care. But if you do, having a well-thought-out plan can mean the difference between struggling under stress and simply activating a strategy you put in place years ago so you and your family can focus on care and comfort, not just costs.
About Genesis Wealth Advisor Group, LLC: Genesis Wealth Advisors Group is an independent fiduciary financial planning firm headquartered in Marlton, New Jersey, serving clients in multiple states with retirement income planning, employer plan guidance and holistic wealth management services.
Revelation: Securities and investment advisory services offered through Osaic Wealth, Inc. member FINRA/SIPC. Ozaic wealth is separately owned and other entities and/or marketing names, products or services referred to are independent of it Ozaic wealth.
