long term care

How to Plan for Long Term Care

Most of us do not smile at the thought of going into a nursing home one day or needing at home care, but the reality is that half of people turning age 65 and older will require some type of long term care. However, it is not a conversation we can put off until we’ve reached the age of 65. Long term care insurance needs to be purchased by your mid-fifties for the most cost-effective premiums. You cannot wait for the demand of long term care to be there, because then the price will have risen to meet that demand. Here are some steps to plan for long term care.

Who needs long term care insurance?

Everyone is at risk of needing long term care, but there are a few categories that enhance that risk. Such as, women are more likely to need long term care since they are more likely to out-live their spouses. Women will need 3.7 years of care, on average, while males will need an average of 2.2 years. If Alzheimer’s runs in your family, this could make a stay even longer with the average stay being 8 years. In these situations, you want to make sure you are covered.

Walk through Holistic Financial Planning

The best thing you can do to determine if long term care insurance is right for you is to meet with a fiduciary financial planner. They can determine your financial positioning and have an understanding if long term care insurance is the next step. We have a software at Wiser that can help us make an appropriate suggestion for your specific needs by projecting the effect of the cost of long term care on your portfolio with and without long term care insurance. With this information, we then need to determine if the possibility of needing long term care is prevalent or not. If so, then we need to figure out if you can afford to self insure care for an average length of 3 years, or if you will need to purchase a long term care policy. At Wiser, we do not advise our clients to take out long term care policies if the premiums will drastically impact their living in the present.

In the United States, 53% of people pay for it out of pocket and 40% pay with medicaid.

Determine a Long Term Care Provider

This is why it is so important to have a fee-only fiduciary advisor relationship. Fee-only fiduciaries receive no compensation for referrals or policies you choose. If your financial advisor recommends that a long term care policy is right for you, then you can rest assured that they are acting in your best interest. Most advisors can connect you to a provider they trust who can quote you multiple policies. On average, our clients receive three policies for review and we determine together which policy suits their needs best at an optimal price point.

If you are in need of financial planning or concerned about future long-term care costs, reach out to Wiser Wealth Management. We are happy to help you find the best plan for your future health and wealth.

Have more questions? Contact Us

Michaela Dowdy
Financial Planning Associate

By Published On: September 21, 2022

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