November marks Long‑Term Care Awareness Month, a time dedicated to raising public understanding about the challenges and planning needs associated with long-term care (LTC).
For individuals preparing for, or already living in, retirement, this month offers an ideal moment to examine how LTC interlocks with a broader retirement strategy.
With life expectancies increasing, the shifting cost structures of healthcare and care services, and the evolving role of retirement savings, it’s more important than ever to integrate long-term care considerations into your retirement roadmap.
What is Long-Term Care and Why It’s a Retirement Planning Must
Long-term care refers to services and supports needed when an individual can no longer independently perform everyday tasks such as bathing, dressing, eating, moving about, or managing medications (often called Activities of Daily Living, or ADLs) or when cognitive impairment requires supervision.
Importantly:
- LTC isn’t just for a few weeks after a hospital stay; it can involve years of support in home-based settings, assisted living, or nursing facilities.
- It is not primarily covered by Medicare. Many believe Medicare will cover all their care if needed, but that is incorrect.
- Because of its high cost and the unpredictability of timing and duration, LTC represents one of the most significant retirement planning risks, one that is often overlooked.
For retirees and pre-retirees, the key takeaway: Ignoring long-term care is akin to ignoring a large, uncertain expense that can derail even a well-funded retirement plan. Recognizing LTC as a “what-if” scenario (but with high consequences) helps you build resilience.
The Scope of the Challenge: Statistics That Demand Attention
Let’s look at some of the most relevant data shaping the long-term care and retirement planning landscape.
Need & Duration
- A person turning age 65 today has nearly a 70% chance of needing some form of long-term services and supports (LTSS) during the remainder of their life.
- One-third of 65-year-olds may never need LTC, but about 20% will need it for more than five years.
- Women face higher odds and longer durations: for example, it’s estimated that women 65+ have a 51% lifetime risk of needing paid LTC, compared to 39% for men.
Impact on Retirement Finances
- Because LTC is largely excluded from standard retirement cost estimates, it is often a “blind spot” in planning. Some financial experts even say that failing to plan for LTC expenses “can be more detrimental to your portfolio than any market downturn.“
- From a funding perspective, you can roughly estimate three years of services: one source notes average durations of around 3 years and sometimes more than five.
What this tells us: LTC is common, expensive, often unplanned for, and deeply intertwined with retirement security. It is exactly the kind of risk your retirement plan should account for.
How Long-Term Care Fits into Retirement Planning
At Agemy Financial Strategies, we view a retirement plan as having multiple layers: income sustainability, longevity management, legacy goals, lifestyle fulfillment, and risk mitigation. Long-term care intersects several of these layers.
Income & Expense Forecasting
A core retirement planning step is estimating your annual expenses and sources of income. But many expense forecasts assume “healthy aging” and only baseline healthcare costs; they often omit a significant LTC event.
In reality, incorporating LTC means adding a “what-if” scenario: What if I need care for X years at cost Y? Incorporating possible long‐term care costs into an income plan can help investors understand whether they’re prepared to deal with these costs.
By acknowledging LTC, you strengthen your income plan’s resilience.
Longevity & Health Span
Increasing life spans mean more retirees will live into their 80s or 90s. With that comes increased risk of needing care. A strong retirement plan needs to flex for longer lifetimes, and the longer you live, the higher the chance LTC will be part of your financial story.
Asset Preservation & Legacy
If a retiree underestimates LTC costs, they may draw down retirement savings prematurely or face the prospect of asset erosion. That can compromise legacy ambitions. Planning ahead – and funding an LTC “reserve” or coverage – can help preserve whether you’re aiming to leave an inheritance, support children, or donate to causes.
Lifestyle & Choice of Care Setting
When you plan proactively, you gain more flexibility in the choice of care (in-home, assisted living, nursing home, etc.). Waiting until a crisis reduces your options and often increases cost. The ability to choose how and where you receive care is part of maintaining quality of life in retirement.
Risk Management: Self-Insurance vs. Transfer
Approaches to LTC mirror broader retirement risk strategies: do you self-insure (accept the risk, fund it yourself) or transfer the risk (via insurance, hybrid products, other vehicles)?A coordinated retirement plan explicitly addresses this decision.
Key Strategies to Help You Prepare for Long-Term Care in Retirement
1. Early Awareness & Estimation
- Begin by estimating your likely LTC need: chances, duration, and approximate cost. For example: 70% chance of needing some care, about 3 years average, but with 20% needing five years or more.
- Research the cost of care in your region (home care, assisted living, nursing homes).
- Factor inflation in care costs (care cost inflation often exceeds general inflation).
- Include a “stress-test” scenario: longer duration, higher cost, earlier onset.
2. Integrating LTC into Your Retirement Income Plan
- Treat LTC like other major risks (market volatility, longevity, health deterioration).
- Model your cash flows: Suppose you begin retirement at 65, expect 25–30 years of spending, then include a possible LTC expense at age 80 for 3–5 years at cost X. See if your portfolio and income sources hold.
- Use tools such as Health Savings Accounts (HSAs), Roth conversions, and strategic withdrawals to help preserve flexibility. For example, HSAs can be used tax-efficiently for qualified LTC expenses.
- Coordinate with Social Security, pensions, and other guaranteed income sources to free up assets that can serve as LTC reserves.
3. Insurance and Risk Transfer Options
- Traditional long-term care insurance: Standalone LTC policies that pay a daily or monthly benefit when you meet policy trigger(s). Need to purchase earlier (often 50s–60s) to lock in better health and lower premiums.
- Hybrid life insurance with LTC rider: Combines life insurance and LTC coverage; if care isn’t needed, heirs receive the death benefit. This transfers risk while offering a potential legacy benefit.
- Self-insuring (funding yourself): For those with substantial assets, you may decide not to purchase insurance and instead keep sufficient reserves/investment flexibility to cover LTC if needed. But this route demands discipline and careful asset-liability matching.
4. Tax & Funding Considerations
- HSAs: Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical/LTC expenses are tax-free. Use of HSAs for LTC gives significant tax advantages if you plan ahead.
- Roth conversions: Converting traditional IRAs/401(k)s to Roth can help reduce taxable distributions during periods of care, offering more net flexibility.
- Deductibility of LTC insurance premiums: Under IRS rules, some LTC insurance premiums are deductible (subject to age-based limits) if they meet certain definitions.
- Estate planning & trust design: LTC planning often intersects with Medicaid eligibility, asset protection, and legacy transfer.
5. Lifestyle & Preventive Measures
- While we cannot eliminate the risk of needing care, research suggests many aging-related issues are influenced by modifiable factors (exercise, diet, sleep, social connections).
- Planning for “aging in place” (home modifications, accessibility features, local support services) can help reduce the severity and cost of care required.
- Early conversations with family about care preferences, trusted decision-makers (durable power of attorney, healthcare proxy), and options help ensure choices align with values and reduce emotional/financial stress later.
Specific Long-Term Care Costs in Connecticut
The state of Connecticut represents one of the higher-cost markets for long-term care in the U.S., and that has important implications for retirement planning. Here are key figures and what they mean for retirement strategies.
Key Cost Figures:
- In Connecticut, the average cost of 3 years of LTC was $549,099 (which works out to around $181,033 per year) for full nursing-home level private-room care.
- For assisted living in Connecticut, the average cost is about $66,207 per year.
What this Means for Retirement Planning:
- Because nursing-home level care in Connecticut can easily exceed $15,000 per month, retirees must recognize that even a moderate duration (say 2-3 years) of such care could consume $360K–$540K or more, depending on exact duration and type of room.
- Assisted living, while less costly than full nursing home care, still runs at several thousand dollars per month, making it a significant draw on retirement savings if not planned.
- Geographic variation matters: costs in the Bridgeport-Stamford area tend to be higher than in more rural or less-expensive regions of the state.
- For a retirement plan to be resilient in Connecticut, it’s prudent to run a scenario that assumes a cost of around $200,000/year if full nursing care is required, then evaluate how that interacts with your income, portfolio, guaranteed income sources, and legacy goals.
Specific Long-Term Care Costs in Colorado
For our clients in or considering retirement in Colorado, the cost profile is more moderate than in Connecticut, but still very material. Let’s look at the latest data and implications.
Key Cost Figures:
- Assisted living in Colorado averages about $5,392 per month across the state, with a range of roughly $4,600 to $5,433 depending on the region.
- The cost of nursing home care in Colorado has been reported at around $9,944 per month.
What this Means for Retirement Planning:
- While the cost in Colorado is lower compared to the high-end states like Connecticut, even $5,000-plus/month for assisted living or $10,000/month+ for nursing home care adds up rapidly. For example, $10,000/month is $120,000/year, over just a few years, that becomes $300K+.
- For a 3-5 year care event, a retiree in Colorado might anticipate $300K–$600K of potential expense, depending on type, timing, and location.
- Geographic variation again matters: costs are higher in metro areas like Denver or Boulder; a retiree in a more rural part of Colorado may pay less.
- Because of the moderate cost environment, clients may consider a blend of self-insurance and risk transfer: perhaps setting aside a dedicated LTC reserve funded via portfolio or tax-advantaged accounts, combined with targeted insurance for “worst-case” duration.
How Agemy Financial Strategies Can Help You This Month
At Agemy Financial Strategies, we believe that Long-Term Care Awareness Month is more than a calendar marker; it’s a call to action. Here are ways we support our clients:
- Retirement readiness assessments: We include an LTC “what-if” scenario as part of your retirement simulation, estimating impact, drawing insights, and recommending adjustments.
- Customized funding plans: Based on your asset base, risk tolerance, health profile, and legacy goals, we help evaluate self-insurance vs. transfer strategies to suit your situation.
- Tax-efficient strategies: We help you explore HSAs, Roth planning, and other tax-efficient vehicles in the context of LTC and retirement income.
- Ongoing education & review: Care costs, policy landscapes, and personal health evolve. We schedule periodic reviews to update your LTC assumptions and adjust your plan accordingly.
Your next steps this month:
- Schedule a meeting with us to run your LTC-inclusive retirement scenario.
- Identify your preliminary estimate of care need: age, duration, setting (home/assisted/nursing).
- Collect local cost information for your region (we can provide benchmarking).
- Discuss with your family your preferences and identify decision-makers.
- Review current coverage (if any) and determine whether you need to explore LTC insurance or hybrid options.
- Ensure your HSAs, IRAs/401(k)s, and estate plan are aligned so that LTC exposure won’t undermine your income, assets, or legacy.
Final Thoughts
Long-Term Care Awareness Month is a valuable prompt, but the real work happens when you translate awareness into action. For retirees and pre-retirees, recognizing the significant likelihood of needing long-term care, understanding the cost implications, and integrating those considerations into your retirement blueprint can be indispensable when it comes to your financial future.
By viewing LTC not as a remote worry but as a manageable element of your retirement strategy, you can reinforce your financial confidence, protect your lifestyle, and preserve your legacy. At Agemy Financial Strategies, we’re here to guide you through the complexities, tailor a plan that fits your unique needs, and help you move forward with clarity and purpose.
Let’s use this November to make long-term care planning an integral part of your retirement preparation, not just a footnote.
Contact us today to schedule your LTC-inclusive retirement review and discover how we can help you reduce the uncertainty, protect your income, and secure your future.
Investment advisory services are offered through Agemy Wealth Advisors, LLC, a Registered Investment Advisor and fiduciary to its clients. Agemy Financial Strategies, Inc. is a franchisee of Retirement Income Source®, LLC. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC are associated entities. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC entities are not associated with Retirement Income Source®, LLC
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