How to Financially Plan for Senior Care

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The U.S. Department of Health and Human Services has published a study that had some staggering facts:

  • 50% of seniors will need long-term care
  • One in seven seniors will need care for five or more years
  • A senior who turns 65 will incur an average of $138,000 in long-term care costs in their life

These statistics can be a harsh wake-up call to seniors and the family members of seniors who may not be financially prepared for such costs. However, there are many options that can help you prepare yourselves or your family financially for long-term care. So let’s dive into how you can prepare for these costs.

Estimating Your Retirement and Long-term Care Costs

The first thing you will want to do in order to properly prepare for long-term care is to gather an estimate of what costs you might face in your golden years. Some of the things you’ll want to look at are:

  • The area you want to live in your retirement
  • Your health risks that could lead to long-term care
  • The types of care you may want
  • Other costs you foresee coming up in your retirement (travel, grandkids, etc.)
  • Your savings and IRA
  • Your current insurance policies

Types of Care

One important aspect of planning for long-term care is deciding what type of care you want. While you may not always have a choice depending on your medical conditions, there are different care options available for everyone, ranging from nursing homes, assisted living facilities to home care for seniors who want to age in place.

Each comes with its own advantages and disadvantages that you will need to consider. There has been a growing trend of people opting for in-home care rather than going to a facility, as many people would rather be in the comfort of their own home.

Here are some more information you might find useful:

What is Non-Medical Home Care?

How Much Does Senior Home Care Cost?

In-Home Care vs Assisted Living Facility: A Comparison Guide

What is the Difference Between Live-in Care and 24 Hour Home Care?

Ways to save up/plan for your care:

Long-term Care Insurance

Depending on your healthcare insurance, you may have some long-term care services covered. If you are on Medicare, you may find that home hospice aid and some home health services* are covered under Original Medicare. As you prepare for long-term care, you will want to look at your current insurance policies to see what is covered. Still, most coverage is limited, so you will want to look at getting long-term care insurance in order to prepare yourselves for any costs that may arise in your future if you need care.

Choosing a long-term care policy will depend on the type of care that you want to receive in the future. If you want to receive care and assistance while in your home, then you might want to compare the costs to get a policy that works best for that type of care, whereas if you would like to receive long-term care in a retirement facility, then you might need a different type of policy. It can be difficult to get a long-term care insurance policy if you already have a serious illness or disorder, so you will want to get a policy while you are still healthy.

*Note: Nurse Next Door provides private home care and charges a fee for our services. We are not affiliated with any government programs. We do not accept Medicare or Medicaid.

Add a Rider to Your Life Insurance

Look at your current life insurance policy to see if you can add on a “terminally ill” rider that allows you to use your life insurance to pay for long-term care. You will have to read the language in your rider and the terms and conditions, as there are likely criteria regarding when you can start accessing your policy, such as terminal illness or cognitive impairment.

Most riders will allow you to use up to a certain percentage of your benefits toward your long-term care. However, whatever funds you pull out of your life insurance policy will be taken from the benefits that will be paid out after your death.

Health Savings Account (HSA)

If you have a High Deductible healthcare plan, then you are eligible to create a Health Savings Account. This account allows you to save money tax-free that can go toward qualified healthcare costs, such as long-term care.

The money you place in your HSA rolls over each year and will continue to grow as you add to it, preparing you to pay for any healthcare costs that come up in your future.


While depending on Medicaid* is not ideal, primarily because Medicaid will only kick in if you have a very low income and few assets, it is an option that can keep you afloat with your long-term care costs. When all of your other options have been exhausted, Medicaid will kick in and can provide coverage for you for specific services. However, it is important to know that your Medicaid coverage is limited and after 100 days, you are on your own for the rest of your costs.

There are other options you can look into such as veterans’ benefits (if applicable), personal savings, social security, etc. but the most important thing to keep in mind while financially planning for senior care is to start planning now. The earlier you start, the more time you will have to save up and find the right resources to give yourself or your family members coverage in the future. By preparing and taking advantage of all of your options, the more opportunities you will have and the better choices you will have in your long-term care.

*Note: Nurse Next Door provides private home care and charges a fee for our services. We are not affiliated with any government programs. We do not accept Medicare or Medicaid.

Interested in learning more about the option of home care? Give us a call at 1-877-588-8609 to learn how Nurse Next Door home care services can support you or a loved one today.

Or read our Caring Blog for more articles on senior topics!

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