Long-Term Care: What Is the Risk, and How Can You Plan for It?

By Andrew Joski, NSSA®, Founder of Joski Financial

Most of us picture retirement in terms of travel, time with family, and the freedom to choose how we spend our days. A retirement plan also needs to consider a less comfortable question: What happens if you or your spouse need help with everyday activities?

That help is called long-term care. It might mean assistance with bathing or dressing at home, supervision for someone with dementia, or care in an assisted living community or nursing home. It can begin gradually, and it does not always mean moving into a facility.

The problem: Care can be expensive, and Medicare has limits

The Administration for Community Living estimates that someone turning 65 has almost a 70% chance of needing some form of long-term care services during their remaining years. Needs vary widely: some people require limited help, while others need years of support.

The cost can change a retirement plan quickly. CareScout’s 2025 Cost of Care Survey reports a national median of $74,400 per year for assisted living and more than $129,000 per year for a private nursing home room. Those are national figures; local costs and the level of care needed will differ.

A common assumption is that Medicare will pay if care becomes necessary. Medicare may cover qualifying short-term skilled care, but it generally does not pay for ongoing help with daily activities. That is the gap many families discover only after a need arises.

There is a second cost that is harder to put on a statement: the time and work provided by a spouse or adult child. Family may want to help, but a plan that relies entirely on them can affect their jobs, finances, and well-being.

What are the options?

There is no single answer that fits every household. Most plans use some combination of family support, personal savings, insurance, and public programs.

1. Set aside assets to pay for care. Some families choose to fund potential care costs from investments, savings, or income. This preserves flexibility: the money remains available for other needs if care is never required. The question is whether the plan can absorb a large expense, especially if one spouse still needs income and housing.

2. Consider long-term care insurance. A traditional policy may help pay for eligible care at home, in assisted living, or in a nursing home, depending on its terms. Coverage can help protect other retirement assets, but premiums, eligibility, benefit limits, waiting periods, and inflation protection all matter. Premiums may also rise over time.

3. Review policies that combine benefits. Some life insurance policies and annuities offer long-term care benefits or riders. These can appeal to people who want another potential use for their money if they never need care. The tradeoffs can include cost, reduced death benefits, limited care benefits, and restrictions on access to the money. The details vary substantially by contract, so it is important to compare what actually triggers a benefit and how much the policy would pay.

4. Understand Medicaid’s role. Medicaid can cover certain long-term care services for people who meet its financial and care requirements. Eligibility rules and available services vary by state. It is a valuable safety net, but qualifying may require significant financial changes, and estate recovery rules may apply. In Idaho, certain qualifying long-term care policies can also participate in the Long-Term Care Partnership Program.

Start with the decisions, then compare products

Before choosing a policy or deciding to pay out of pocket, I would start with a few practical questions:

• If care were needed, would you prefer to remain at home as long as possible?

• Who could realistically help, and for how long?

• How much could your retirement plan pay without disrupting the other spouse’s income?

• What would happen if care lasted several years or both spouses eventually needed help?

• Would you rather retain the risk, transfer some of it through insurance, or use a combination?

Long-term care planning is about more than covering a bill. It is about protecting choices, reducing pressure on family, and understanding how a care need could affect the rest of your retirement plan.

At Joski Financial, we can help you look at the potential costs alongside your income, savings, insurance, and goals so you can make a deliberate decision before a crisis makes one for you.

This article is for general educational purposes. Insurance benefits and costs depend on the specific policy, and Medicaid eligibility depends on individual circumstances and applicable rules.