Long-term care planning is an important aspect of retirement planning that is often overlooked. As people are living longer and healthcare costs are increasing, it is crucial to consider the cost of long-term care in retirement planning.
According to Forbes, one of the major healthcare costs as we age is long-term care, which is the extra help we need when we can’t take care of ourselves fully anymore. Medicare covers some, but not all, healthcare costs, and long-term care is not covered by Medicare. Insurance for long-term care is suggested to prevent running out of money in retirement due to the costs of long-term care services.[1]
According to Investopedia, retirement planning should include addressing healthcare to ensure that quality of life is maintained throughout your retirement.[2] There are certainly risks to quality of life due to health reasons, but those can often be tied to financial concerns as well. Some people may be at risk for early retirement due to declining cognitive, psychomotor, physical, and sensory abilities required for their jobs, according to a new report. The report also suggests that working longer is not a reliable financial plan since many retirees leave their work early due to health problems.[3]
According to Reuters, experts predict that retirement healthcare costs will continue to increase, making long-term care planning more important than ever.[4] Blue-collar workers with physically demanding jobs are most susceptible to early retirement, but every occupation is vulnerable to a decline in at least one ability with age. The report recommends assessing individuals’ susceptibility to early retirement by talking to older workers in their field to get a sense of what their retirement timeline and financial costs and goals should entail.[5] This means that people are likely to require long-term care in some form or another.
There are different options for long-term care services, and costs can vary widely depending on the type of care and location. That’s why taking your quality of life in retirement seriously could mean investing in long-term care insurance. Starting early and considering factors such as age, health, financial stability, wealth, and care preferences can help you choose the right type of long-term care insurance coverage and care style before it becomes a surprise financial burden. Regardless, planning for long-term care can make a significant difference in the quality of life in your later years.
Financial professionals can help clients understand the importance of long-term care planning and develop individualized plans based on the client’s situation. If you are looking for a guide to retirement and long-term care, reach out to our financial professionals today for a complimentary review of your finances.
