by Rick Kahler

About 70% of us will need long term care eventually. Even those who don’t need long term care insurance need a long term care plan. Here’s how to create one.

When most of us hear “long-term health care plan,” we think of insurance. While a long-term care insurance policy may be part of your health care planning, it isn’t a plan. Even those who don’t need such insurance need a long-term health care plan.

I recently heard a presentation by Carolyn McClanahan, MD, CFP. She said about 70% of Americans will need some type of long-term care. Your odds of needing it increase as you get older and are also higher if you are female, have a family history of chronic health conditions, have a poor diet, don’t exercise, or live alone.

Two major issues to consider in creating your own long-term care plan are where you will live and how you will pay for the care you are likely to need.

Most seniors want to live in their own homes “until their toenails turn blue,” as Dr. McClanahan puts it. No matter how appealing this is, it may not be realistic. Here are some important items she says to consider that can make your home old-age friendly:

1. Close proximity and access to needed services like grocery stores, restaurants, and medical facilities
2. Available interaction with others
3. A plan for home maintenance
4. Accessibility for wheelchairs and walkers
5. Minimal stairs, level surfaces, and the ability to accommodate ramps inside and out
6. Non-skid floors, baths, and showers
7. Grab bars and easy to reach utilities (See Bathroom Remodeling Tips for Aging In Place.)
8. Cameras at floor levels (the least intrusive) to monitor your activity
9. Whether the home can be dementia proofed
10. Whether in-home medical and support services are available, you are willing to use them, and you can afford them

Even with a goal of staying in your home, your plan should specify how to determine if it’s time to move into a long-term care facility. Perhaps it would be when friends or family feel it’s a safety issue, you can no longer perform certain functions, or transportation becomes an issue.

The second large concern, of course, is how to pay for long-term health care. This is where LTC insurance can come in handy, but it is expensive and often doesn’t cover all the costs. Paid care includes nursing facilities, which are the most expensive alternatives, followed by assisted living facilities, independent living apartments, adult day care, and in-home care. (See Do I Need Long Term Care Insurance?)

However, most long-term health care is unpaid. In 2015 (the latest numbers available), 34.2 million adults provided unpaid health care services to seniors with a value of $522 billion. Half of them, or 17.1 million people, do so because they had no other choice. The average caregiver spends 24 hours a week providing care with 25% of them spending over 40 hours a week and will serve in this role for an average of four years. The average cost to caregivers in lost wages, benefits, and out-of-pocket expenses is $300,000 to $700,000.

The more retirement savings you have, the more you can avoid placing this burden on your family members. If you are approaching retirement without adequate income, you may want to consider working longer and/or reducing spending now in order to provide for your long-term needs.

Obviously, we are a nation that isn’t planning well for old age. Many of us feel that by not talking about long-term care planning, it somehow won’t become a reality. The ultimate reality is that by not planning, most elders and their caregivers will have few to no options when they need care. Creating your own long-term health care plan before you need it can increase your options and help you live out your life with more comfort and dignity.

• What You Need to Know About Long Term Care Insurance Before You Retire
• Determine Your Long Term Care Needs
• What You Should Know about Medicare Before Age 65
• How Will You Pay for Dental Care after Age 65?

Reviewed August 2021

About the Author

Rick Kahler, MSFP, ChFC, CFP, is a fee-only financial planner and author. Find more information at KahlerFinancial.com. Contact him at Rick@KahlerFinancial.com.