Hi friend,
Here’s the number most financial advisors don’t put in the brochure: the median annual cost of a home health aide is $75,504. A private nursing home room: $116,800 per year.
And research shows that 60% of older adults could not afford two years of in-home long-term services even if they sold all their assets. That’s not just low-income seniors — that’s most of us.
This week, let’s talk about long-term care honestly. Not to be alarming, but because the gap between reality and planning is wide enough to drive a truck through.
🏥 One big idea: long-term care is the largest unplanned expense in retirement
Most people plan for housing. They plan for healthcare basics. They roughly estimate travel and food. Very few plan specifically for extended care — the months or years when they may need help with the basic tasks of daily living: bathing, dressing, eating, mobility.
The statistics are striking:
- 60% of older adults cannot afford two years of in-home long-term services, even liquidating all assets
- The bottom 20% of older adults have no assets at all going into this
- Even the middle tier — working-class families who saved modestly — often runs out of money within months of a significant care event
Medicare doesn’t cover most long-term care. It covers acute, medically necessary care in skilled nursing facilities for a limited time. Medicaid covers long-term care, but only after most assets are spent down — and navigating that process is complicated and often emotionally devastating for families.
🌟 One win: options exist at every income level
If you have significant assets: Long-term care insurance (ideally purchased in your 50s) or hybrid life/LTC policies can transfer the risk. An elder law attorney can help structure assets for Medicaid planning while preserving what’s possible for a spouse or heirs.
If you have modest assets: Medicaid planning becomes central. An elder law attorney — not just a regular financial advisor — is essential here. Spousal protection rules exist that most people don’t know about.
If you have very few assets: Medicaid is the program designed for you. Your local Area Agency on Aging can connect you with free legal assistance in most states to navigate the application process.
In all cases: BenefitsCheckUp.org includes a search for programs that help with home-based care, personal care services, and caregiver support — programs that can delay or prevent costly nursing home placement.
🎯 One thing to try this week
If you haven’t had a specific conversation about long-term care — with a spouse, with adult children, with a financial advisor — this is the week to put it on the calendar. Ask yourself three questions:
- Who would care for me if I needed help for an extended period?
- Where would that care happen?
- How would it be paid for?
If you don’t have clear answers to all three, that’s the direction to walk. The earlier you start the conversation, the more options stay available.
Age boldly, Robert
Sources: Genworth Financial, Cost of Care Survey (2023); National Council on Aging, economic security research (2024); Kaiser Family Foundation, Medicaid and long-term services and supports overview.