Long-Term Care Planning: 5 Items to Review Before It Becomes Urgent

Long-term care is one of the most important, and most overlooked, retirement planning topics. It is also one of the hardest to address after a health event, when time and options can narrow quickly.

When the conversation is postponed, families often make decisions under pressure. When it is addressed early, there is usually more flexibility, more control, and more opportunity to coordinate financial and family planning. Below are five practical items to review now, while decisions can be made on your timeline.

1) Define what “long-term care” means for your household

Long-term care is not a single place or a single service. It is a range of support when someone needs help with activities of daily living, such as bathing, dressing, using the bathroom, eating, or safe mobility. Care can take place at home, in an assisted living community, or in a nursing home setting.

A key planning point is distinguishing long-term custodial care from short-term medically necessary care. Medicare is clear that it does not cover custodial care if that is the only care you need. Medicare Part A may cover skilled nursing care when it is medically necessary, but that is different from ongoing assistance with daily living. If a retirement plan assumes Medicare will fund an extended custodial stay, that assumption should be reviewed.

It can also be helpful to define what you mean by “at home.” Some households picture a spouse providing most support, while others assume paid caregivers, a nearby adult child, or a combination. Clarifying these expectations early can reduce friction later.

2) Understand the likelihood and the “trigger” for needing care

Many families plan for market risk and longevity risk, but underestimate care risk. The U.S. Department of Health and Human Services states that about 70% of people turning 65 can expect to use some form of long-term care during their lives.

No statistic predicts any one person’s outcome, but it does highlight why long-term care belongs on the retirement checklist. It can arrive gradually, and in stages. Some people need light support at home first, then more structured care later. Planning is often more effective when it is flexible enough to adapt across these stages, rather than assuming an all-or-nothing outcome.

Another practical step is to discuss what would trigger a change in care level. For example, families may agree that a fall risk, cognitive decline, or caregiver burnout would warrant a different arrangement. Naming these triggers in advance can help decisions feel less reactive.

3) Map the cost range using current, realistic numbers

Costs vary widely by geography and level of care, so the goal is not to guess a single number. The goal is to understand a range of potential outcomes and what those outcomes could do to a retirement plan.

National median annual costs from the 2024 Genworth and CareScout Cost of Care Survey include $75,504 for homemaker services, $77,792 for a home health aide, $70,800 for assisted living, and $127,750 for a private room in a nursing home. Those figures are helpful as a starting point, but your local market can differ materially.

For example, the same survey lists California daily median costs that translate to higher annual totals, including $499 per day for a private nursing home room and $242 per day for assisted living. That difference alone can change how a plan is stress-tested.

Two reminders help keep this discussion grounded. First, these are medians, not maximums, and they can change over time. Second, a good plan does not require perfect estimates. It requires modeling and decision-making that can hold up across a realistic range.

4) Identify who would pay, and what the tradeoffs are

Most long-term care planning conversations come down to funding strategy. Common approaches include a blend of personal resources, family support, and insurance, depending on preferences and eligibility.

A few foundational facts help frame the decision. Medicare is limited for custodial long-term care, as noted above. Medicaid plays a major role nationally, and Medicaid.gov describes Medicaid as the primary payer across the nation for long-term care services. Separately, family caregiving is already common. AARP reports that 63 million Americans, nearly 1 in 4 adults, provided care in the past year.

From there, many households compare three broad paths. Some plan to self-fund, using cash flow, savings, or a dedicated reserve. This approach can preserve flexibility and choice, but it may increase the risk that care expenses reduce a surviving spouse’s lifestyle or affect legacy goals.

Others consider traditional long-term care insurance, which may transfer part of the financial risk to an insurer. With these policies, premiums, benefits, eligibility, and exclusions depend on the contract and underwriting. Policy design matters, and the details should be reviewed carefully.

A third category is hybrid solutions, where certain life insurance or annuity contracts may include long-term care or chronic illness features. These products are not interchangeable with traditional coverage, and features vary by carrier and by state. A careful side-by-side review is important before drawing conclusions.

Regardless of the approach, it is worth understanding key mechanics in plain English. One example is the elimination period, which is the waiting period before benefits begin. Washington’s insurance regulator notes elimination periods can range from zero to 180 days. Other mechanics include how benefits are paid, how long benefits can last, and whether benefits increase over time through an inflation feature.

5) Put the plan in writing, including the family logistics

Long-term care planning is not only a financial decision. It is also a family decision. A strong plan clarifies preferences and responsibilities before a crisis.

At a minimum, families benefit from writing down preferences for where care would occur, and what would trigger a move from one setting to another. It also helps to outline who would coordinate care, who would handle bills and paperwork, and how communication would work among family members.

Finally, consider keeping a simple, centralized list of critical information. That might include emergency contacts, medication lists, insurance policies, financial accounts, and the legal documents your attorney recommends. In many households, this step reduces stress because it turns uncertainty into a plan that can be followed.

If you are curious, schedule a Retirement Prism Diagnostic .

In that meeting, we can help you build your Whalen One Page Plan and identify your Freedom Number, which is an estimate of how much you may need to better prepare for potential long-term care needs. With those outputs, you can see long-term care risk in context, understand the tradeoffs of different funding approaches, and make decisions based on a clearer range of outcomes.