How to Protect Your Savings from Long-Term Care Expenses

When planning for retirement, most people focus on creating income that lasts, enjoying life, and leaving a legacy. But there's a hidden threat that can quietly derail even the most carefully laid plans: long-term care expenses.

Few retirees want to think about the possibility of needing help with daily activities like bathing, dressing, or eating—but the reality is, around 70% of people over age 65 will need some form of long-term care during their lifetime. And it’s not cheap.

The good news? With proper planning, you can protect your life savings, your independence, and your family from the financial and emotional stress of long-term care. Here's how.

What Is Long-Term Care?

Long-term care refers to a range of services that help people with chronic illness, disability, or cognitive impairment. These services can be provided in a variety of settings:

• At home, through personal aides or nurses

• In an assisted living facility

• In a nursing home or skilled care center

• Through adult day care or memory care programs

Long-term care is not medical care in the traditional sense. It focuses more on help with daily living than treating acute medical conditions.

The Cost of Long-Term Care

Long-term care services are expensive—and they’re only getting pricier. National averages show that:

• A home health aide can cost over $5,000 per month

• Assisted living facilities average $4,500–$6,000 per month

• A private room in a nursing home can exceed $9,000 per month

These costs can quickly drain a retirement account if you’re unprepared. And the worst part? Most health plans don’t cover long-term care.

Without a strategy in place, your retirement savings could be wiped out within a few years of needing care.

Who Pays for Long-Term Care?

Many people assume that health coverage or government programs will cover these costs, but that's not always the case.

Here’s a quick breakdown:

• Traditional health insurance: Covers medical treatment, not long-term care services

• Health coverage for those over 65: May pay for short-term rehab after a hospital stay, but not custodial care

• Out-of-pocket: The most common method—until assets are depleted

• Government aid: Often requires you to spend down nearly all your assets to qualify

This means protecting your savings is up to you—but that doesn’t mean you’re on your own.

4 Ways to Prepare and Protect Your Retirement Savings

1. Consider Long-Term Care Insurance

Long-term care insurance is designed specifically to cover services that traditional insurance does not. Policies can cover home care, assisted living, and nursing homes. While premiums vary based on age and health, applying early can improve your options and affordability.

2. Explore Hybrid Life Insurance Policies

Some life insurance policies come with long-term care benefits built in. These "hybrid" policies allow you to use a portion of the death benefit to pay for long-term care expenses, offering flexibility without the "use-it-or-lose-it" risk of traditional long-term care policies.

3. Use Annuities with Long-Term Care Riders

Certain annuities now include long-term care riders that provide extra income if you need care. This can be a strategic way to create a dual-purpose tool: one that generates income and adds protection at the same time.

4. Set Aside a Dedicated Care Fund

Even if you don’t purchase insurance, it’s wise to create a separate fund just for long-term care. This shows intentionality and ensures that those funds aren’t accidentally used for everyday expenses or travel.

Why It’s Better to Plan Early

Long-term care planning is most effective when done in advance—before a diagnosis or crisis. Waiting too long can limit your choices and increase costs. Starting the conversation in your 50s or early 60s opens more doors, including better pricing, more flexibility, and less stress for your family.

The Role of a Retirement Planner

A retirement planner helps you look beyond income streams and account balances. They help you prepare for real-life challenges—like the possibility of needing care—and build a strategy that protects your health and your savings.

With the right plan in place, you can enjoy your retirement with peace of mind, knowing you won’t become a financial burden to your loved ones or risk running out of money due to an unexpected care need.

Let’s Protect Your Future—Together

At Sound Retirement Solutions, we believe true retirement planning means preparing for life’s “what-ifs.” Our retirement planners can help you explore long-term care options, understand the costs, and build a plan that protects your assets—without sacrificing your quality of life.

📞 Schedule your planning session today and take the first step toward a more secure retirement, no matter what the future brings.