As I talk to people who have accumulated substantial savings towards their goals and have protected their family financially, many often ask about the significance of long-term care insurance as a part of their financial plan as they age.

Here are a few common assumptions:

Medicare will pay for my long-term care expenses.
My children will take care of me; I won't need long-term care.
We can gift away our assets quickly so we can qualify for Medicaid.

According to the National Association of Insurance, the average annual cost of nursing care is $90,000, assisted living is $48,000, and home care is $34,000. If you are under age 70 or haven't had a friend, family member, or someone you know need long-term care, it's probably not on your radar.

Here are some important facts to consider:

70% of retirees will need long-term care at some point.
Medicare does not pay for long-term care. Medicaid only steps in when you become financially destitute.
Long-term care expenses can erode a lifetime of savings.
Children are often incapable of assuming care duties.
Long-term care premiums can and probably will increase. According to the American Association for Long-Term Care Insurance, annual rate increases are generally 2-4% in your 50's and 6 -8% in your 60's.

The bottom line, the expense will probably become a reality, and if your assets cannot cover your need, then insurance may be a viable option.

One strategy is to look at your budget and add the cost of care while removing some offsetting lifestyle expenses you may have to sacrifice. Next, calculate whether your retirement can generate the income you will need over time.

In conclusion, long-term care insurance is not for everyone. Many will choose to self-fund if they have the resources. However, long-term care is something we all need to consider as part of our financial strategy as we age.

If you want to talk more about your specific long-term care needs and how it fits into your financial plan, click the link below and let's schedule a time to talk.

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*These policies have exclusions and/or limitations. The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.