Long-term care and retirement planning

By: Kimberly Lankford

As reach your 50s and 60s, your retirement goals can come into clearer focus. Rather than thinking of retirement in terms a large amount of money to accumulate, you can start to envision your ideal retirement and estimate your expenses more carefully. Which of your monthly expenses will continue after you retire? Will you still have your mortgage? Do you have other financial goals, such as traveling or gifts to children or grandchildren? Do you want to downsize or move to a new area?

Another key question to ask yourself is what you’d like to do if you end up needing long-term care — and how you’d pay for those expenses. Even though you may never need the care, 70% of people over age 65 end up needing some kind of long-term care services during their lifetime. That care can take a variety of forms. Some of the people only need short-term care from family caregivers in their homes. But others may need care for months or years in a nursing home, in an assisted-living facility, or from professional home-care workers.

Those kinds of care can be very expensive. The median cost of a private room in a nursing home in 2019 was $102,200, according to the Genworth Cost of Care Survey. The median cost for a year in an assisted-living facility was $48,612, and a year of full-time care by a home-care worker was $52,624 (based on 44 hours per week).

No matter what kind of care you end up needing — if any — incorporating potential long-term care costs into your retirement plans early on will give you more options if you do end up needing care as you get older.

Just as you start to envision your retirement in your 50s or 60s, it’s also a good idea to start thinking about where you’d like to live later in retirement and how you’d like to receive care. You can’t control the type of care you may need by then, but at least you can start to think about your options and how to afford the cost. It also helps to let your adult children know your wishes so they’ll have a guide if they have to find care for you in an emergency.

Would you like to stay in your home and hire a home health aide if needed? Would you like to move to a retirement community that starts with independent living but also has assisted living and nursing home care? Do you want to move to be closer to your kids and grandkids as you get older? Does care cost a lot more or less in an area where you’d like to live?

You can look up median care costs by city and state in the Genworth Cost-of-Care study, and the range can be quite large. For example, the median cost of a private room in a nursing home is about $85,000 in Des Moines, but more than $155,000 in San Francisco. The median cost of a year of full-time care from a home health aide is about $60,000 in Des Moines, but more than $75,000 in San Francisco. Interestingly, the median cost of a year in an assisted-living facility is closer in both cities — $52,200 vs. $57,000.

The earlier you start thinking about these questions, the more time you’ll have to prepare financially and to start searching for a place where you’ll feel the most comfortable — which will give you a lot more control over what happens if you need care, even if that doesn’t happen until years in the future.

If you’d like to stay in your home as you get older, it can help to have a remodeler who specializes in aging in place visit your home and let you know about renovations that can help make your house accessible as you age and how much the upgrades would cost. It’s better to figure that out sooner rather than later so you can start to spread out the improvements (and cost) over a longer time — or discover that it might be too expensive to make those changes to your current house. You can find a remodeler with a Certified Aging-in-Place designation (CAPS) through the National Association of Home Builders (you can go to the NAHB’s directories page at and click on “Professionals with Home Building Designations” to find members with the CAPS certification).

Or you can start exploring your options if you’re thinking about moving to a new area or a retirement community as you get older, and to also find out about assisted living facilities, too. Many communities are creating virtual tours that make it easy to start searching anonymously from anywhere.

Finally, when you have a better idea about the costs, you can start thinking about how you’d pay for them. It helps to break down the costs into monthly expenses, rather than looking at a lump sum each year. Add up your sources of income in retirement (such as Social Security and any pension) and figure out how much you could afford to pay from your monthly cash flow and how much you could withdraw from your savings, and consider getting insurance to fill in the gap.

You have several options: You could buy a standalone long-term care insurance policy that pays out a monthly benefit for nursing home, assisted living or home care for several years (a three-year benefit period covers the average need for care). Or you can get a hybrid life insurance/long-term care policy that pays a monthly benefit if you need long-term care, or a death benefit if you die before needing care or if you only need care for a short time. Another option is to get a deferred-income annuity that pays out a guaranteed monthly income starting at the age when you’re likely to need care (in your 80s, for example), whether or not you end up needing care.

It’s best to consider getting this coverage in your 50s or early 60s, when you’re still saving for retirement and the premiums are more affordable (the older you are when you buy the policy, the higher the annual premiums). You’ll also pay less if you buy coverage before you develop any major health issues. Since you may not end up needing care for 20 years or more, however, don’t forget to add inflation protection to help the policy keep up with the rising cost of care — 3% annual compound inflation protection is common.

For more information about about how long-term care insurance works and how much might be right for you, try out the Saturday Insurance Long-Term Care Insurance Assessment Tool or request a free consultation with a long-term care expert at Saturday below.

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Schedule a call with a friendly long-term care expert at Saturday. We can answer your questions and help you decide if insurance is (or isn't) a fit for you.

Saturday Insurance Services, LLC (“Saturday” or “Saturday Insurance”) is a licensed, digital insurance advisor. All tools, quotes, and information provided by Saturday are for educational purposes only and based on the limited information, if any, provided by you. We urge you to consult with your financial and tax advisors before making any purchase decisions. All quotes and estimates are non-binding and are not to be construed as a guarantee you will be able to purchase insurance. Availability of insurance and final pricing is determined solely by our insurer partners and subject to their review and acceptance of a completed application. All product guarantees are subject to the claims-paying ability of your insurer.