Planning Ahead: What To Know About Long-Term Care

Recap of our event led by Joshua Garland, ChFC®, AIF®

Earlier this month, our team hosted a client education event on long-term care led by Josh Garland, one of our senior financial advisors. The conversation covered why long-term care may be an important consideration in a broader financial plan, the often-overlooked impact on family caregivers, and the range of approaches available for addressing the cost of care. Below is a recap of the key takeaways.

Why Long-Term Care Planning Matters

Long-term care is often pictured as a nursing home, but long-term care needs can begin well before that, including with care provided in the home by family or friends, long before anyone applies for benefits.

• Long-term care is best understood as a financial event to plan for, similar to funding retirement or a child’s education, rather than a single decision made in a crisis.
• Many individuals may need some form of long-term services and supports during their lifetime*. Without a plan in place, the cost of care can affect a family’s broader goals, including the lifestyle of a surviving spouse and the legacy a family hopes to leave.

The Realities Caregivers Face**

One of the most striking parts of the discussion was the impact long-term care has on caregivers themselves, most often a spouse, adult child, or close family member.

• Family caregiving can be a significant time commitment. Nearly one in four caregiver’s reports providing 40 or more hours of care per week, and one-third has been providing care for five years or longer.
• Caregiving frequently comes with real financial tradeoffs, including reduced work hours, delayed promotions, or leaving the workforce altogether, with effects that can extend well beyond the caregiving period itself.
• Women are disproportionately likely to take on caregiving roles and to shoulder the more demanding, hands-on aspects of care.
• The emotional and physical toll of caregiving is real, and having a plan in place may provide families with greater flexibility when making caregiving decisions.

Approaches to Funding Long-Term Care

There is no single right way to plan for the cost of long-term care, and the best approach depends on each family’s goals, resources, and circumstances. Broadly speaking, families tend to consider a combination of the following:

• Self-funding, or paying for care directly from savings and income, which may be a reasonable option for some families but deserves a close look at how a care event could affect a broader financial and legacy plan.
• Medicaid, a joint federal-state program that may cover certain long-term care services for eligible individuals, subject to financial and other eligibility requirements that vary by state.
• Traditional long-term care insurance, which is designed specifically to help cover the cost of care.
• Certain life insurance or annuity products may offer long-term care or similar benefits. Features, benefits, costs, eligibility requirements, limitations, and treatment of unused benefits vary by product and contract.

Every option involves tradeoffs around cost, flexibility, and how benefits are paid out. Because these details change over time and vary by provider and by individual health and circumstances, the appropriate approach, if any, depends on individual circumstances and should be evaluated with your advisor rather than a one size fits all answer.

A Simple Step You Can Take Today

One of the most valuable takeaways from the event did not involve insurance at all: making sure the people who may someday help care for you know where to find your important information. An elder care checklist, covering your financial accounts, healthcare information, and the contact details for your advisors, attorneys, and physicians, may make it easier for family members to locate important information if the need for care arises. You do not need to share account values to have this conversation, just make sure your loved ones know where the information lives.

If you would like to talk through how long-term care planning fits into your own financial picture, please reach out to your advisor to schedule a conversation.

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