long term care

Key Considerations for Long-term Care

Part of our job as financial planners is to look at your financial future and figure out what can go right and what might go wrong.  One of the major possibilities in the “wrong” category is the need for long-term care at some point in your life, typically as you age over 80.  For someone who is 50 or 60, this can be hard to imagine unless you have had some first-hand experience with someone in the family.

Nevertheless, a major part of planning is thinking about what the future might hold, assessing potential risks based on all available information, and then deciding how to prioritize what risks need to be managed and how to do so.

What does long-term care typically include?

Let’s first start by defining what “long-term care” (LTC) typically includes.  It covers nursing home care, assisted living, and in-home care, which may become necessary due to aging, health-related issues, or cognitive decline. Generally, it means that a person cannot be left on their own and needs help to dress, feed, toilet, bathe or get in/out of a bed or chair. These services are not covered by Medicare, which only covers hospital and skilled nursing care. Long-term care services generally do not require a nurse or highly trained medical professional.

Where do I find information on LTC?

As with many topics in financial planning, I first ask:  what are the facts, what is the probability of needing care, and what will the cost be?    Our own experiences often shape how we feel about these questions, so it is important to step back and determine what good-quality data we can unearth, with the understanding that your health will play a large factor in how you place your experience in the context of this data.

Our first stop in looking at the data is to look for an unbiased source.  Be careful in your internet searches to make sure you understand if the source is part of an insurance company or is related to an insurance professional organization.  They may have good data, but you’ll want to be cognizant of their potential bias.

Start by reviewing www.longtermcare.gov, where you will find a wealth of information, including guidance on what Medicare covers, who will need care, how the care can be provided, and ideas for finding local services.

As an advisor, I am most interested in what your risk is.  How probable is it that you will need care?  Is it 100%, 50%, or 10%?  How long will you likely need care, and what kind of care?  It goes without saying that for those of us who have parents and relatives who have needed care or have died, we are affected by their experiences.  While these experiences may provide some guidance on what you can expect, everyone’s experience is going to be unique.  In my own family, my father lived to 99 and was in good health, but his father died in his 30s. His family history did not guide him as to what he could expect.

Not surprisingly, the factors that increase your likelihood of needing care are:

  • Your age- the older you are, the more likely you’ll need care.
  • Your gender- women are more likely to need care than men.
  • Your health- chronic conditions such as diabetes, arthritis, COPD, or hypertension increase risk.
  • Family history- especially of chronic diseases in the elderly.
  • Poor diet and exercise.
  • Living arrangements- if living alone, you are more likely to need care and at an earlier age.


Are women at greater risk of needing LTC?

Research by the US Department of Health and Human Services (HHS), gives us some key facts to consider:

  • Someone turning 65 today has an almost 56% chance of needing some type of long-term care services and support in their remaining years.
  • Women are more likely to need care (64%) than men (49%).
  • Income makes little difference in how likely you are to need care, except for the lowest income category, which has the highest rate of need (63%).
  • Excellent health helps to reduce the duration of the need (2.8 yrs v 3.1 yrs) and the likelihood, but only modestly.
  • The average LTC need is 3.1 years, but women need care longer (3.6 years) than men (2.5. years)
  • Of the 56% needing care, 12% are expected to need less than a year of care, but 22% are expected to need care for more than five years.
  • Women are 50% more likely to need care in excess of five years than men.

The overwhelming message in the data is that women are at greatest risk for needing care and for needing care for a longer time period.

We encourage you to read part two of this series, How to Plan for Long-term Care, to learn more about planning for the possibility of needing care.

Robin Sherwood, CFP®

With over twenty years of experience, Robin assists clients in maximizing their financial well-being. She counsels clients in the areas of retirement, taxes, investments and estate planning.

Robin is a CERTIFIED FINANCIAL PLANNER™ practitioner and a registered member of NAPFA. She has an MBA in Finance from the Wharton School at the University of Pennsylvania, and a BA from Colby College.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
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