This week, we’re talking about long-term care and why it’s important to make some decisions today about how you’re going to pay for long-term care in retirement.

Yesterday we talked about the harsh reality of the long-term care landscape - there’s a decent chance (about 50/50) that you’ll need long-term care in your lifetime, and it can be very expensive to pay for - potentially wiping out your retirement nest egg.

Today we’re talking about how you can protect yourself financially if you need long-term care.

I have a client, we’ll call her Lucy, who’s husband battled Alzheimer's for 9 years. The first 7 of those 9 years, she cared for him in their home, but the last 2 years, she could no longer care for him on her own and he moved to a memory care facility.

The care Lucy was providing for those 7 years was an incredible burden, but when he moved to memory care, it began to take a serious financial toll on Lucy. And I became genuinely concerned she was going to run out of money.

Their investment portfolio was not large enough to support the large withdrawals she was taking out to pay for his care. And they didn’t have long-term care insurance. As long as they still had assets, Medicaid wasn’t going to kick in. So Lucy was left with draining their savings to pay for her husband’s care.  All the while worrying if there would be anything left for her.

Thankfully in the end, she did not run out of money after paying for her late husband’s long-term care. But the cost of long-term care did some damage to her nest egg, and it caused enormous financial stress and worry for Lucy that she would be left with nothing.

This story illustrates how important it is for those of you in the middle to take a serious look at long-term care insurance. The poor will be covered by medicaid and the rich have plenty of assets to pay for long-term care. But if your retirement will be wiped out if you need to spend upwards of $200,000 on long-term care over your lifetime, then you’ll want to look seriously at long-term care insurance.

That’s it for today. Thanks for listening!

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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