Lengthy-term care is among the greatest wild playing cards in retirement planning. The prices may be staggering, but conventional long-term care insurance coverage has turn out to be more and more costly, difficult, and troublesome to qualify for. Many individuals need safety, however hesitate to lock themselves into insurance policies which will by no means be used — or that pressure their retirement finances. The excellent news? There are viable options to long-term care insurance coverage.
Why You Want a Plan for Lengthy Time period Care
About 70% of people that flip age 65 will want some sort of long-term care of their lifetime, in accordance with the U.S. Division of Well being and Human Providers, however few are ready to pay for that care.
The prices of long-term care are exorbitant – ranging, on common, from $26,000 to $128,000 a 12 months in accordance with this 2024 survey – and aren’t coated by Medicare.
Regardless of that actuality, most purchasers are “just about in denial” about long run care planning, says San Francisco-based licensed monetary planner and public accountant Larry Weiss, with NEXT Monetary Group. Usually, the one folks all for long run care insurance coverage (LTC insurance coverage) have needed to handle their mother and father.
“Most purchasers aren’t conscious of the wants or chance they’ll want long run care; they solely know that long run care insurance coverage, from their perspective, is simply too costly,” says Weiss. It may also be ineffective.
11 Options to Lengthy Time period Care Insurance coverage
On this information, we’ll stroll by 11 options to long-term care insurance coverage — approaches that may assist you to defend your future, protect your independence, and really feel extra assured about what lies forward.
Most of those choices may be modeled within the Boldin Retirement Planner. It’s straightforward to match your choices and see what actually works for you.
1. Staying wholesome and by no means needing long run care
Sure — the best-case situation is that you simply stay wholesome and by no means want long-term care in any respect. It’s the “plan” everybody hopes for. However the actuality is that well being wants are unpredictable, and there aren’t any ensures. Relying solely on success is just not a technique.
Fast Takeaway: Hoping for the most effective is pure, however planning for the “what ifs” is crucial.
2. Self Fund with Financial savings
For those who’ve constructed vital financial savings, chances are you’ll choose to fund a possible long-term care want instantly somewhat than buy insurance coverage. This strategy offers you full management over how your cash is used. You’ll be able to even earmark particular belongings and make investments them with this objective in thoughts.
The Boldin Planner makes it simpler to stress-test this feature. You’ll be able to mannequin a long-term care occasion in your plan, see how a lot you may have to spend and when, and consider the impression in your total belongings and way of life.
Execs: Most flexibility and management over your cash.
Cons: Relying in your well being and size of care, prices can shortly add up. In some instances, self-funding might find yourself draining extra wealth than different approaches reminiscent of insurance coverage, hybrid insurance policies, or annuities.
Fast Takeaway: Self-funding works finest you probably have ample assets and wish flexibility — nevertheless it comes with the chance of spending excess of anticipated.
3. Keep Life Insurance coverage with a Lengthy-Time period Care Rider
For folks hesitant to pay premiums for a product they might by no means use, hybrid life insurance coverage can supply a center floor. By including a long-term care (LTC) rider to a life insurance coverage coverage, your cash pulls double obligation: in case you want care, the rider helps cowl prices; if not, your heirs nonetheless obtain the dying profit.
As insurance coverage skilled Weiss explains: “Shopping for a rider that will increase the LTC advantages will help you get more cash over time. It’s not the right resolution, however these insurance policies may be structured in versatile methods — single life, joint life, and extra.”
Execs: You get flexibility and a assured profit — both LTC protection or a dying profit. This will really feel extra environment friendly than paying into a standard coverage chances are you’ll by no means use.
Cons: These insurance policies may be costly, and advantages might not at all times maintain tempo with inflation. Liquidity may also be a difficulty, that means your cash could also be tied up within the coverage.
Fast Takeaway: Hybrid life insurance coverage gives peace of thoughts that your premiums received’t go to waste — however the trade-offs are value, complexity, and probably restricted protection.
4. Get a Deferred Lifetime Annuity
A lifetime annuity is basically earnings you purchase — a gradual stream of funds in alternate for a lump sum. One more and more common technique for masking a possible long-term care want is buying a deferred lifetime annuity, which begins paying out at a future date if you’re extra more likely to want long-term care.
Right here’s the way it works: you make investments a portion of your financial savings in the present day, and in return, you lock in month-to-month earnings that begins later in life. If you find yourself needing long-term care, that earnings will help cowl prices. For those who don’t, the funds can nonetheless improve your way of life. Many annuities additionally supply riders reminiscent of cost-of-living changes, principal ensures, or survivor advantages for added safety.
With Boldin’s Retirement Planner, you may mannequin how a deferred annuity suits into your plan — or use the lifetime annuity calculator to see precisely how a lot earnings your financial savings may generate.
Execs: Twin-purpose advantages — the annuity gives earnings whether or not or not you want care. Plus, the assure of lifetime earnings brings peace of thoughts regardless of how lengthy you reside.
Cons: Restricted liquidity, probably increased prices and costs, and decrease development potential in comparison with different investments. With out inflation safety, your buying energy may erode over time.
Fast Takeaway: A deferred lifetime annuity can present worthwhile “simply in case” protection and assured earnings for all times — nevertheless it comes with trade-offs in flexibility and development.
5. Promote Your Residence to Money in on Residence Fairness
For many individuals, their house is their single most precious asset — and it may also be a robust supply of funding for long-term care. Promoting a house outright can generate vital money to pay for care, particularly for people with no partner, associate, or dependent residing there. Even downsizing to a smaller residence can liberate fairness whereas nonetheless offering a cushty place for family members.
Execs: Promoting a house helps you to faucet into an present asset to fund care, probably defending your retirement financial savings and investments. Downsizing can even simplify your way of life whereas releasing fairness.
Cons: Promoting a house is a significant life occasion — tense, time-consuming, and infrequently impractical throughout a well being disaster. It’s not one thing you need to be pressured into on the final minute.
Fast Takeaway: Your house generally is a monetary security internet, however promoting must be a part of a proactive plan — not a rushed resolution in the course of a care emergency.
6. Faucet Residence Fairness with a Mortgage or Line of Credit score
Your house isn’t only a place to reside — it’s additionally a supply of borrowing energy. Two widespread methods to unlock that worth are a Residence Fairness Line of Credit score (HELOC) or a residence fairness mortgage.
- A HELOC acts like a revolving line of credit score: you borrow as wanted and pay curiosity solely on what you employ.
- A residence fairness mortgage (generally referred to as a second mortgage) offers you a lump sum upfront, with mounted month-to-month funds over time.
Execs: Each choices can present versatile or instant money to cowl long-term care prices with out forcing you to promote your house. Many retirees open a HELOC earlier than retirement, conserving it in reserve as a security internet for future bills.
Cons: You’ll have to qualify primarily based on earnings and credit score — which may be more durable when you’re retired. Month-to-month funds additionally create a brand new monetary obligation, and curiosity prices can add up.
Fast Takeaway: A house fairness mortgage or HELOC generally is a sensible backup plan for funding care, nevertheless it works finest if secured early — when you nonetheless have the earnings and credit score profile to qualify.
7. Promote Different Beneficial Property
Past retirement accounts and financial savings, some households maintain worthwhile belongings — paintings, collectibles, jewellery, antiques, land, or perhaps a second residence — that might be offered to assist cowl long-term care prices.
Execs: Promoting a high-value asset can generate a big lump sum comparatively shortly, offering one other layer of monetary safety with out tapping into core retirement financial savings.
Cons: These belongings are sometimes tied to household historical past or sentimental worth, making the choice emotionally troublesome. As well as, non-financial belongings may be exhausting to promote shortly, and their market worth might fluctuate much more than shares or bonds.
Fast Takeaway: Different belongings can function a monetary backstop, however promoting them typically comes with emotional trade-offs and unsure timing. It’s finest to contemplate this as a last-resort possibility somewhat than a main funding technique.
8. Get a Reverse Mortgage
In case your long-term care wants may be met at residence — typically a less expensive and comfy possibility — a reverse mortgage might assist cowl the prices.
Most reverse mortgages are provided by the federally insured Residence Fairness Conversion Mortgage (HECM) program. They permit owners age 62+ to faucet their residence fairness as a non-recourse mortgage, that means you may’t owe greater than the house’s worth.
The bottom line is ensuring your house is appropriate for growing old in place. As Weiss explains:
“For those who’re going to do a reverse mortgage, you have to actually be sure to can reside in your own home for a protracted time period in order that it is sensible.”
Execs: A reverse mortgage can present money whereas letting you stay in your house. For some, it’s a perfect strategy to fund care with out promoting.
Cons: Reverse mortgages include prices and costs that may really feel steep, and you should reside within the residence to maintain the mortgage in good standing. That makes them much less versatile in case you later want to maneuver right into a facility.
Fast Takeaway: A reverse mortgage can flip your house right into a monetary security internet for in-home care — nevertheless it solely is sensible if your own home actually works for growing old in place.
9. Run Via Financial savings and Qualify for Medicaid
For a lot of People, that is the default path: use private financial savings till they’re depleted, then flip to Medicaid for help. In reality, in accordance with the Kaiser Household Basis, Medicaid is the main payer of long-term care, masking about 60% of all nursing residence residents.
Execs: This strategy ensures that you’ll not be left fully with out care — Medicaid gives a security internet as soon as your assets are exhausted.
Cons: The spend-down course of may be financially devastating, eroding belongings you could have needed to protect for a partner or heirs. As well as, Medicaid usually limits your selection of services and providers, which can imply accepting an ordinary of care under what you would favor.
Fast Takeaway: Medicaid is an important backstop, however counting on it means dropping management over each your funds and your care choices. It’s finest thought-about a final resort somewhat than a main plan.
Be taught extra about this feature.
10. Depend on Household Members
For a lot of households, long-term care is shouldered by household. Spouses, grownup youngsters, and generally prolonged kinfolk typically step in to supply help — from every day duties to full-time caregiving.
Execs: Counting on household can maintain care extra private, acquainted, and inexpensive. It could help you stay at residence and keep away from institutional settings.
Cons: Caregiving can place heavy emotional, bodily, and monetary pressure on family members. It could possibly have an effect on their careers, well being, and relationships. If that is your plan, it’s vital to have open conversations prematurely and ensure everybody understands the obligations concerned.
Fast Takeaway: Household care is widespread, nevertheless it isn’t free. It comes with actual trade-offs, so be trustworthy about whether or not it’s practical in your state of affairs — for each you and your family members.
11. Dwell in Cohousing
For individuals who need to age in place, senior cohousing gives a community-driven different. Charles Durrett, architect and writer of Senior Cohousing: A Group Strategy to Unbiased Residing, describes it as a contemporary model of small-town care — neighbors supporting neighbors.
In cohousing communities, seniors typically pool assets to rent caregivers who serve a number of residents. This shared strategy makes skilled help extra inexpensive than hiring particular person caregivers. Durrett notes the distinction: his father’s personal caregiver value $7,000 a month, whereas assisted residing for his mom ran $4,500 a month. By comparability, residents in cohousing communities typically report saving $200 to $2,400 monthly, due to decrease housing, vitality, and transportation prices.
Execs: Cohousing can decrease prices, cut back isolation, and supply day-to-day help that improves high quality of life.
Cons: These communities may be exhausting to seek out, might lack constant regulation, and require a robust dedication to collective residing.
Fast Takeaway: Cohousing isn’t for everybody, however for many who worth neighborhood, collaboration, and independence, it may possibly present each significant connections and a extra inexpensive strategy to navigate long-term care wants.
Whereas there are month-to-month charges to reside in a cohousing neighborhood, it’s usually cheaper than facility-based long-term care, contemplating Genworth’s Price of Care Survey.
Have a Plan, Make Certain it Works with Your Funds, and Talk it to Household Members
The entire above choices are viable methods to take care of a future long run care want. Use the Boldin Retirement Planner and run eventualities that can assist you assess which choices is finest for you.
And, no matter different to long run care insurance coverage you select, be sure your needs are communicated to relations.
When the necessity for long-term care arises, it’s an emotional expertise for everybody concerned. It’s best that everybody know and have purchase in in your wishes.
Up to date October 2025