Vital Financial Planning Tips to Prepare for Long-Term Care

Vital Financial Planning Tips to Prepare for Long-Term Care

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By Hazel Bridges

How to Prepare for Long-Term Care

Are you aware that Medicare does not cover assisted living or nursing home care? This is because long-term care involves help with the basic tasks of daily living rather than medical issues alone. So, it’s important that you plan to support your own (or your loved ones) long-term care. That way, you can receive the best assistance possible and maintain a high quality of life well into old age.

Start Planning Early

According to CNBC, you should start to prepare for long-term care needs in your 40’s and 50’s. Sure, this may be long before you think you’ll need long-term care, but over half of the people aged 65 and up will require care assistance at some point. Starting early will give you more time to assess your financial standing and make changes to your savings plans so you can be prepared. Early planning will also help you end up in an ideal geographic location where you have various care options. Some regions have little available services, which can make long-term care more difficult or expensive.

Choosing The Best Type of Care for Your Situation

There are many different types of long-term care offering various services at different price points. In-home care is ideal for elderly people who want to stay in their own home. Plus, it costs much less than facility-based care. This kind of care can be as simple as homemaker services helping with chores around the house. Or, it can involve home health aid if you need help with the activities of daily living, like bathing or taking medications.

The next step up from in-home care is adult day care or assisted living. This provides help for seniors in a facility, either permanently or during certain hours of the day. The care facilities provide meals, opportunities for socialization, and basic medical care. Nursing home care is even more expensive, providing medical care in addition to helping with daily living tasks. To cut costs in a nursing home, seniors can choose to stay in a semi-private or shared room.


Know Your Options for Funding

There are plenty of ways to fund long-term care. Some of the most common include self-funding and long-term care insurance. Self-funding requires you to have sufficient financial assets, including home equity and smart investments. Long-term care insurance may be a better option for people who find themselves unable to save the large sums of money required. If you or your spouse ends up requiring assisted living or nursing home care, the payouts of long-term care insurance should help you both maintain your standard of living.

Another viable option is to consider selling your life insurance policy to fund your care needs. Although not always possible, you may be able to sell your insurance policy for its present value in cash. You may also be able to acquire a viatical settlement, meaning you sell your life insurance policy to a third party for a percentage of your death benefit.

Keep Early Retirement Expenses Down

ElderCarelink recommends keeping your expenses to a minimum in early retirement so you can save more toward potential long-term care in the future. A great way to do this is to keep a record of everything you’re spending money on so you can see what little things are having an

impacting on your finances. Try to travel during the off-season to save money while on vacation. Finally, use your endless free time in retirement to tackle household maintenance yourself instead of paying someone else to do it.


Staying healthy is one of the easiest ways to prevent out-of-pocket health care costs. This involves getting plenty of exercises, eating a balanced diet and sleeping well. You can also prevent debilitating illness with immunizations for shingles, the flu and pneumonia.

Although Medicare helps many seniors fund the costs of health care in retirement, it does little to cover the costs of long-term care needs. Instead, seniors must find alternate ways to scrape together the funds for assisted living or nursing home facilities. Long-term care should improve your daily life, not add financial stress to it. Start planning now so you can avoid worrying about how you’ll cover costs.

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