Photo via Pexels.

Written By: Karen Weeks of

Planning Ahead To Finance Your Long-Term Care

Most of us understand that we may need assistance living comfortably and safely in old age, yet we tend to push this thought aside for as long as we possibly can. After all, if you are still fit and healthy, what’s the point in worrying? The problem with this attitude is that it ignores the significant financial costs of long-term care and puts many people in a difficult position when it comes to finding the funds for assisted living, nursing home care, or home health care.

Saving For Your Golden Years

According to CNBC, Americans between the ages of 55 and 64 have saved on average 12 percent of what they will need for retirement, so it’s no wonder that saving for long-term care is often forgotten or ignored. The good news is that the sooner you start, the more time you have to accumulate some money to cover long-term care expenses.

The first thing you need to do is think about what form of care you want. Then, you need to get to grips with how much your ideal care is likely to cost. You can compare long-term care costs across the country here. Of course, you will never be able to know the exact figure, but you can come up with a realistic estimate and – more importantly – a savings goal.

 You may also want to consider using long-term care insurance instead of saving up. This can give you more security and may even allow you to pay for a better standard of care, but the premiums can be extremely high. This article by Forbes outlines the questions you should be asking yourself to figure out if long-term care insurance is for you.

Freeing Up Cash

The less time you have to save, the higher the chances you will have to free up large sums of cash. One obvious way in which to do this is to sell your home (homes in Castle Rock have sold for a median price of $456,500) in order to move to a smaller place or live-in care facility, although this is understandably not everyone’s preferred option. Aging in place is not a viable option for everyone, and those looking to do so need to consider the potential hazards.

If you want to stay at home, you could consider a reverse mortgage, which allows you to borrow money against the accumulated value of your home. Make sure you carefully consider the pros and cons of this decision. For instance, a reverse mortgage does mean losing equity, however this could be a perfect solution if you don’t intend to leave the house to an heir.

Beyond Long-Term Care

If long-term care is something most people don’t like thinking about, final expenses such as funeral costs (funeral costs average just under $7,200) and palliative care are often ignored altogether, leading to stress and upset for grieving families. This is why it is essential to have the necessary conversations with your loved ones about the end-of-life arrangements that you want – the Conversation Project has great starter kits designed for this purpose.

You should also protect the future finances of your loved ones by investing in final expense insurance. This can help pay for expenses you leave behind, such as funeral costs or medical bills. Another option is to set money aside for this purpose in savings, although this can add to the already existing pressure of saving for long-term care.

Planning for long-term care can feel pessimistic, as if you are betting on your health to decline, but it is simply the smart thing to do. No one is saying that you have to spend your senior years constantly fretting about your health care needs. On the contrary, taking some time to set a plan in place for long-term care means that you can enjoy the next few decades safe in the knowledge that you will be provided for when you need it.