Planning for Elder Care: Are You Financially Ready?

 In Financial Planning

Long-term care helps seniors receive the support they need as they age and experience health issues. Many people are unprepared for the cost of personal and medical care.

One in five Americans don’t save for retirement or emergencies, let alone future care.1 Yet, half of all seniors will need long-term care at some point in their lives.2

How can you and your family plan for care?

Learn more about the cost of elder care and how you can be ready for the future.

Know Your Care Options & Costs

It’s never too early to start planning for future care. The average 65-year-old American will spend an estimated $138,000 in long-term care costs.2 

Genworth’s annual Cost of Care Survey averages care costs across the nation. In 2019, monthly care expenses were estimated to be:

  • $4,385 for home health aides
  • $4,051 for assisted living
  • $7,513 for nursing home care3

It may be less expensive for you to employ a home health aide if you only need a few hours of care each week. For more advanced or regular care, you may need to move into an assisted living community or nursing home.

Take some time to reflect on your wishes.

If you needed care, would you want to stay at home for as long as possible? Would you want to move into assisted living?

Once you know what your priorities are, you’ll be better able to plan for the care you may need. 

Ways to Pay for Long-term Care

How will you afford care? Thinking about how to pay for long-term care can be daunting.

Many people believe Medicare and Social Security will cover their care needs when the time comes. However, most long-term care expenses are not covered by these programs.

  • Medicare does not pay for assistance with daily activities, like bathing, dressing, or eating.4 Often, this is the type of supplemental care seniors need.
  • Medicaid covers some long-term care costs, but you must meet specific low-income requirements to be eligible. Missouri’s Medicaid program is called MO HealthNet, and it includes personal care, home health care services, and nursing home care.5
  • Veteran’s Administration health plans can help you meet the cost of elder care. You may receive certain medical or Aid and Attendance benefits. If you qualify, you may have copays for these services.6
  • Private insurance can cover elder care, depending on your plan. If you are interested in long-term care coverage, you should talk with your provider to see what options are available.

Long-term Care Insurance

Long-term care insurance can help you pay for care. The earlier you buy long-term care insurance, the cheaper it will be.

What’s the average cost of long-term insurance?

The American Association for Long-term Care Insurance found that couples at age 55 paid an average of $3,050 a year for their policies in 2019. Couples five years older spent slightly more at $3,400 a year.7 Often, Long-term Care Insurance isn’t purchased until much later.

Long-term insurance policies vary. You’ll want to check that yours covers the type of care you think you’ll want or need. Every policy will have a daily benefit amount, ranging from $50 to $500 per day. Some policies may provide a benefit of up to five years.

Life Insurance 

If you have life insurance, you may be able to use your death benefit to pay for long-term care. Hybrid life insurance policies may include an accelerated death benefit or long-term care rider.

You should keep in mind that paying for care this way will reduce your death benefit. Your beneficiaries will receive the remaining amount after you pass away.


An annuity provides you with a steady source of income down the line. Many people use annuities to plan for retirement, but you can use annuities as income for future care as well.

How does an annuity work?

Similar to a pension, you’ll pay your insurance company a series of installments over time or a lump sum. In exchange, the insurance company can set up withdrawal payments when you need it.

Annuities bolster your income which can help you pay for care. You can choose to receive your money yearly or set up regular payments.

Estate Planning Options

Through comprehensive estate planning strategies, The Resource Center, in partnership with Will Worsham of Worsham Law Firm, may be able to adjust your situation which may allow you to be eligible for Medicare.  RSVP for our free monthly estate planning meeting for more information or to get started.  By structuring your estate differently you may be able to save your assets for your beneficiaries instead of paying the high costs of nursing care.

Design Your Long-term Care Strategy 

A financial strategy can help ensure that you can afford long-term care if you need it.

Do you have questions about paying for long-term care?

Contact our local professionals at The Resource Center in Springfield and Branson, MO. We can help you create a custom financial strategy, so you can be ready to pay for care when the time comes.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and The Resource Center are not affiliated companies. Our firm is not affiliated with the U.S. government or the federal Medicare program. Annuities are insurance products that may be subject to restrictions, surrender charges, holding periods, or early withdrawal fees which vary by carrier. Riders are generally optional and have an additional associated cost. Life insurance policies are contracts between your client and an insurance company. Life insurance and annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Income riders are generally optional and have an additional associated cost. Neither the firm nor its agents or representatives may give legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Tax laws are subject to change and you should consult a tax professional.  00428874


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