long term care advisors

The Long-Term Care Crisis: Are you prepared?

As the long-term care crisis worsens, here’s what you need to know to make sure you’re not caught off guard when it comes to your retirement.

It is easy to feel pessimistic about the looming challenge of long-term care for the nearly 71 million baby boomers heading into their golden years. Last March, a major study of public attitudes towards long-term care found that most Americans are largely clueless about the financial risk of needing care in old age.

Furthermore, home care and other long-term care is low-paid and undervalued work, and there is understandably a shortage of people to do it. 

Long-Term Care in Numbers

Nearly 70 percent of Americans who reach age 65 will someday require help from others to get through their day. On average women will need help for 3.7 years, and men for 2.2 years.

In 2023 without insurance, monthly long-term care costs could see you paying: 

  • $5,148 for a home health aide
  • $1,690 for adult day care
  • $4,500 for assisted living
  • $7,908 for a semi-private room in a nursing home
  • $9,034 for a private room in a nursing home

Still not too concerned? How about these staggering numbers?

  • There are currently 14 million people receiving some form of long-term care. That number will double by 2050, according to estimates from the U.S. Centers for Medicare and Medicaid Services.
  • Despite an aging population, only 7 percent of adults over 50 have an LTC insurance policy.

Now we REALLY have your attention, how can you plan for the monumental costs of care in retirement? Here are a few things to consider.

Long-term Care Insurance

Because Medicare has very limited coverage for these services, having long-term care insurance helps protect your savings and assets while giving you better options for care. Long-term care insurance helps cover the costs of care in the event that you or a loved one requires assistance with activities of daily living such as bathing, dressing, or eating. This type of insurance can be an important part of planning for the potential costs of care in retirement. It can help protect your savings and assets from being depleted by long-term care expenses.

There are different types of long-term care insurance policies available, but they generally fall into two categories: 

  1. Traditional long-term care insurance: Traditional long-term care insurance policies provide coverage for long-term care expenses, such as nursing home care or in-home care. 
  2. Hybrid long-term care insurance: Hybrid long-term care insurance policies combine long-term care coverage with other types of insurance. Such as life insurance or annuities.

When purchasing long-term care insurance, it is important to consider factors such as the length of coverage, the daily/monthly benefit amount, and the elimination period. Long-term care insurance can be costly. Long-term care insurance on average costs $2,068 – $7,695 per month

While this is just the average, each insurance policy varies from person to person. It’s important to familiarize yourself with the exclusions, limitations, and conditions of the policy you’re signing up for.

Short-Term Care Insurance

Short-term care insurance is a type of insurance that helps cover the costs of short-term medical care, typically in a nursing home or assisted living facility. It can also help cover in-home care costs.

This insurance typically pays out a set daily or monthly amount for a specific period of time, usually a few months to a year. The cost of short-term care insurance can vary depending on your age, health, and the benefits you choose. It is generally less expensive than long-term care insurance.

To plan for short-term care insurance, it’s important to research different policies and compare their costs and coverage options. This can be a cost-effective option for many people, as a significant portion of long-term care claims, approximately 49%, are for one year or less. 

These policies typically have a 0-day elimination period, meaning benefits begin on the first day of coverage, unlike traditional long-term care insurance policies which often have a 90-day elimination period. Additionally, short-term care insurance policies can provide benefits in addition to Medicare, while traditional long-term care insurance policies cannot.

As an added precaution, you should carefully review the policy’s exclusions and limitations to ensure that it meets your needs.

Look into Government Programs

Medicaid and Medicare are two government funded programs that are extremely beneficial to retirees. However, both programs have different rules and regulations depending on which state you live in.

There are two ways to get Medicaid: by meeting your state’s income and resource rules, or by spending down the amount of your income that’s above the state’s Medicaid limit. When you apply for Medicaid, you must generally meet your state’s rules for your income and resources. 

Medicare is composed of 4 parts, but Part A and Part B are the most popular. Part A which is hospital insurance and Part B which is medical insurance. With Part A you don’t have to pay a monthly premium if your spouse is paying medicare taxes (while working for a certain amount of time). Whereas part B is paid at a standard premium amount. 

Medicare doesn’t cover long-term care, if that’s the only care you need. Meaning you pay 100% for non-covered services, including most long-term care.

If you need help deciphering which program would benefit you the most, speak with your trusted financial advisor.

Have the Conversation With Your Family

It’s important to have a conversation with your family about your future care needs and how you plan to pay for them. This will help ensure that everyone is on the same page and that your wishes are respected.

You may also want to consider talking about what happens to your estate should you become incapacitated.

Final Thoughts

In the next decade, one of America’s biggest challenges is to overcome the long-term care crisis. With baby boomers living longer than ever, more retirees are needing long-term care. Combine the lack of financial preparedness with the lack of available care workers, America simply isn’t prepared… But you can be.

By factoring in long-term care costs and suitable insurance coverage into your retirement plan, you’ll help be prepared for needing long-term care one day.

APO Financial is where security and opportunity come together to work for you. Our team is devoted to staying one step ahead of financial concerns, and finding innovative ways to grow your financial assets through the long-term care crisis and beyond.

Schedule a complimentary call or meeting with us here today.

© 2022 APO Financial. All rights reserved.


Communications such as this are not impartial and are provided in connection with advertising and marketing. This material is not suggesting a specific course of action or any action at all.. Prior to making any investment, insurance, financial or legal decision, you should always seek individualized advice from a financial, insurance, legal or tax professional that takes into account all of the particular facts and circumstances of your individual own situation

Investment advice is offered through APO Financial Services, LLC (“APO") 10155 Westmoor Drive, Suite 175, Westminster, Colorado 80021-2627, an investment adviser registered with the Securities and Exchange Commission. Registration with the SEC should not be construed to imply that the SEC has approved or endorsed qualifications or the services offered or that its personnel possess a particular level of skill, expertise or training. Important information and disclosures related to APO are available at https://apofinancial1.wpengine.com. Additional information pertaining to APO’s registration status, its business operations, services and fees, and its current written disclosure statement is available on the SEC’s investment adviser public website at https://www.adviserinfo.sec.gov.

Information relating to annuities is intended for educational purposes only and should not be construed as comprehensive or all-inclusive. Therefore, it should not be regarded as a complete analysis of the subjects discussed and should not be used to make an investment decision.

Annuities can be an important part of an overall portfolio but may not be appropriate for everyone. Before purchasing an annuity, it is important to understand the details of the product. Certain products may not be available in your state. The terms of each indexed annuity varies. It is always important to speak to a financial professional. about an annuity’s features, benefits and fees, and whether an annuity is appropriate for you, based on your financial situation and objectives. Participation rates, cap rates and/or index spreads may be subject to change by the insurance company according to the annuity contract provisions. If the insurance company makes such changes, this could adversely affect the return. Guarantees of an indexed annuity are backed by the claims-paying ability of the underwriting insurance company. The surrender charge period for a product may be longer, and the surrender charges may be higher than other annuity products. Indexed annuities are long-term investments. If the annuity contract is surrendered early, there is the possibility of a surrender charge being imposed and/or the funds may be subject to income taxes. The IRS may also impose a 10% penalty on withdrawals prior to age 59 ½, depending on the circumstances. With indexed annuities, there is the potential to lose money, depending on the product charges and minimum guarantee contract provisions. For additional information on annuities, reference the following websites: The FINRA (www.FINRA.org), the Securities and Exchange Commission (www.SEC.gov), Insured Retirement Institute (www.irionline.org), the National Association of Insurance Commissioners (www.NAIC.org) or your state's insurance department.