This week I’m talking about how much healthcare will cost in retirement. 

Today, I’m talking about long-term care which is an expensive need for many retirees later in life, and is in addition to the typical health care costs I mentioned this week. A 65 year old couple can expect to pay about $285,000 for healthcare related costs in retirement. But what about if you need long-term care? Long-term care is needed when you can no longer take care of yourself or meet the regular activities of daily living on your own.

The median annual cost for long-term care ranges from $18,000 for adult day care to $97,000 for a private room in a nursing home. 

If you require long-term care for an extended period or if you develop dementia or Altzheimer’s, the costs skyrocket. The estimated lifetime cost of care for someone with dementia is $341,840.

There’s about a 50/50 chance that you’ll need some form of long-term care in your lifetime, and 15% of Americans will spend more than $250,000 on long-term care in our lifetime. 

Those expenses can wipe out your wealth, which is why it’s so important to understand your options and protect yourself.

You can take your chances and self-fund, which is likely the way to go if you have millions in assets or if you haven’t saved much at all for retirement. The problem lies when you’re in the middle. If long-term care costs have the potential to wipe out your wealth in retirement and you need to preserve that wealth for your spouse, your kids, or for some other reason, you’ll want to look seriously at buying 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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