Long-Term Care: Are You Planning or Just Hoping?
Most people spend years building financial security, but few plan for one of the most expensive and emotionally complex phases of life: custodial care. Whether it’s receiving help at home, moving into assisted living, or transitioning to a nursing facility, the cost of long-term care can be staggering. Yet many individuals assume they’ll “figure it out” when the time comes.
The Truth Hurts
Here’s the truth: if you haven’t planned for long-term care, you already have a plan by default. And it’s not a good one.
Without proactive planning, the financial burden of care typically falls on personal income and assets. Once your assets run out, you might need to apply for Medicaid, but only after you’ve reached poverty-level thresholds. At that point, the government may claim an interest in your remaining property, including your home, which probably isn’t the legacy you had in mind.
The True Cost of Waiting
According to recent data, the average annual cost of a private room in a nursing home exceeds $100,000, while assisted living facilities average around $73,000 per year. In-home care, though often more flexible, can still run thousands of dollars monthly depending on the level of support required. These expenses can quickly deplete retirement savings, especially if you need care for several years.
The emotional toll of custodial care planning, especially when done reactively, can be immense. Families may face difficult conversations, rushed decisions, and feelings of guilt or uncertainty. Planning ahead not only protects finances but also can help preserve dignity and financial wellness for everyone involved.
Building a Proactive Plan
Creating a custodial care plan doesn’t have feel daunting. Begin your plan with these key steps:
Assess your needs and preferences. Consider your health history, family support system, and lifestyle. Would you prefer to age in place with home care, or are you open to assisted living? Understanding your values can help guide future decisions.
Understand your financial picture. Review your assets, income sources, and insurance policies. Long-term care insurance, while not right for everyone, can be valuable if purchased early. Some life insurance policies also offer riders for custodial care.
Explore care options. Research local facilities, home care agencies, and community resources. Visit locations, ask questions, and compare costs. Knowing what’s available can help you make informed choices.
Create legal safeguards. Work with an attorney to establish powers of attorney, advance directives, and possibly a trust. These documents help ensure your wishes are honored and reduce the burden on loved ones.
Communicate with family. Share your plan with those who may be involved in your care. Open conversations now can prevent confusion and conflict later.
Review and update regularly. Life changes, and so should your plan. Revisit it every few years or after major life events to help ensure it still reflects your needs and goals.
How a Fiduciary Financial Advisor Can Help
A fiduciary financial advisor can help you build a long-term care plan that’s designed to help protect both your finances and your financial wellness. Because they’re legally obligated to act in your best interest, their guidance is tailored to your needs.
They assess your financial situation, model care scenarios, and recommend funding strategies, like long-term care insurance or asset reallocation. Financial advisors also coordinate with estate planning professionals to help ensure your legal documents align with your care goals.
Most importantly, they can help you plan proactively, so you’re not making rushed decisions during a crisis. With ongoing support, your plan stays flexible as your needs evolve.
Don’t default into a plan. Design one. Contact Savant Wealth Management today to begin your personalized long-term care planning process.