Jeremy Keil compares long-term care insurance to self-funding long-term care through the lens of 3 clarifying questions.

When most people start planning for retirement, they’re focused on investment returns, income, and taxes. But one of the biggest financial and emotional challenges retirees face isn’t about markets or money — it’s about health. Specifically, it’s about how to plan for long-term care.

I get this question all the time:

“Should I buy long-term care insurance or should I self-insure?”

Here’s the truth — I don’t like the term “self-insure.”

You can’t actually insure yourself. Insurance means pooling risk with other people, each paying a small amount to protect against a large potential loss. When you’re on your own, there’s no pool, no spreading of risk — you’re not “self-insuring,” you’re self-funding.

If you’re going to self-fund, it needs to be part of a plan — not just an afterthought. Everyone needs a long-term care plan, even if not everyone needs long-term care insurance.

When you’re creating your long-term care plan, there are three essential questions to answer:

Let’s walk through each.

This is both a question of geography and lifestyle. Do you want to receive care at home, in a facility, or somewhere near family?

Many retirees live far from their adult children, which can make in-home or family-supported care difficult. If your goal is to stay close to family support, you might want to plan for a move before care is needed.

And if your goal is to age in place, make sure your home will work for that. Adding features like a zero-entry shower, ramps instead of stairs, or widened doorways can make life easier down the road. The best time to make those upgrades is before a health crisis, not after.

This question is deeply personal. Some people assume their spouse or adult children will step in. Others would rather hire professional help to avoid burdening family members.

Neither approach is wrong, but you need to talk about it. If you’re relying on family, have that conversation today. Make sure they’re willing — and able — to provide that help.

A quote I once heard sums this up well:
“Your family can still care for you, even if they’re not the ones taking care of you.”

That distinction matters. Paid caregivers can provide hands-on support, while your family focuses on emotional and relational care. Whatever route you choose, don’t leave it unspoken.

This is where most people get stuck — and where the insurance vs. self-funding debate really comes in.

If you choose to self-fund, make it intentional. Set aside a specific “long-term care fund” within your retirement plan. Maybe that’s $200,000 of your portfolio earmarked for care costs, invested conservatively and available if needed.

If you choose to buy insurance, remember that it’s not about getting a perfect return. Long-term care insurance can help protect your savings and provide flexibility when you need help most.

Here’s how I like to think of it:

There’s no math formula that can tell you which one will be better for you. It’s about peace of mind. Ask yourself:

“Which would I regret more — buying insurance I never use, or needing care I can’t afford?”

That’s often the best guide.

I’ve seen both sides. Some of my clients feel more confident knowing they have a policy that will step in if they need care. Others prefer to rely on their own savings.

Personally, I lean toward having some level of insurance coverage. Not necessarily because it’s cheaper — but because of the mindset it creates.

When you’ve paid premiums for years, and later in life you need care, it might be easier to say, “It’s time for this policy to do its job.” You might find it easier to get the help you need when you need it.

Long-term care planning isn’t about predicting the future. It’s about preparing for it. Whether you self-fund or buy insurance, the goal is the same: to protect your independence and your loved ones from unnecessary stress.

So ask yourself those three key questions — Where? Who? How? — and start shaping your plan today.

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About the Author:

Jeremy Keil, CFP®, CFA® is a financial advisor in Milwaukee, WI, author of the bestseller Retire Today: Create Your Retirement Master Plan in 5 Simple Steps and host of both the Retire Today Podcast and Mr. Retirement YouTube channel

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