This Expense Could Wreck Your Retirement. Here’s How to Mitigate It

By Maurie Backman



Many people know to set aside money to pay for healthcare expenses in retirement. After all, as we age, health issues tend to emerge. And anyone who does any reading on Medicare will know full well that the program is by no means free, and that even with minimal issues, your costs under it could be expensive.

But while you may be padding your IRA or socking extra funds away in an HSA to pay for healthcare during your senior years, there’s a related expense you might be forgetting — long-term care. Unfortunately, long-term care is something you might have to pay for completely out of pocket. And the sooner you recognize that and put a plan in place to cover that expense, the less at risk you’ll be of depleting your savings later in life.

Don’t get caught by surprise

As costly as regular medical care might be, long-term care can be truly prohibitive. The average cost of a year’s stay at an assisted living facility is $54,000, according to Genworth’s most recent data. For a semi-private nursing home room, it’s $94,900 a year. And for a private room in a nursing home, it’s $108,405.

Also, these are just averages. Just as living costs in general tend to be higher in some parts of the country than others, so too might the cost of long-term care increase based on where you live.

Now, let’s say you manage to entire retirement with a $500,000 nest egg. That’s pretty impressive. But if you were to need assisted living care for 10 years, you’d effectively deplete that sum and then some, based on the number above.

That’s why it’s so important to start thinking about long-term care insurance in your 50s. Will you spend money to put a policy in place? Yes. But depending on your circumstances, your premium costs might pale in comparison to the costs you face at a nursing home — especially if you wind up having to reside in one for several years.

Now the optimal time to apply for long-term care insurance is generally your mid-50s. At that point, you’re young enough to lock in an affordable premium rate based on your age, but you’re not so young that you’re paying those premiums for a needlessly long period of time.

But don’t assume you won’t qualify for long-term care insurance if you apply at a later age. If you’re already in your 60s and are only now first realizing what a problem long-term care might be, shop around for rates and see what coverage options you have available.

Long-term care insurance may not cover your entire nursing home or assisted living bill. But it might cover the bulk of it. So if you want to avoid financial stress later in life, do yourself a favor and start exploring your options for buying a policy. If you don’t, you might end up not only having to spend down your life’s savings on your care, but potentially burdening your children financially when your money runs out on you.

The Motley Fool has a disclosure policy.


This article was written by Maurie Backman from The Motley Fool and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to


This article is being provided for educational purposes only. It does not constitute an endorsement, solicitation or offer of any particular insurance product or product type and is not intended, and should not be relied upon, as insurance, financial or tax advice.

GE- 5871514.1(8/23)(Exp.8/25)


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