Retirement Planning
Planning for Long-Term Care Costs
Long-term care costs can alter even strong retirement plans. Planning does not require perfect prediction, but it does require clear funding tiers and contingencies.
Why this risk is different
- Potentially high cost with uncertain timing.
- Can affect one spouse first and then both.
- May require coordinated family and legal planning decisions.
Funding approaches
- Self-funding with designated reserve assets.
- Insurance solutions where suitable.
- Hybrid approach combining reserve plus insurance protection.
Practical move: The most important step is acknowledging the risk early and assigning a specific funding plan.
Planning checklist
- Estimate potential care-cost range in today’s dollars.
- Assign which assets would fund each stage.
- Review legal documents and care directives regularly.
Stress-Test Retirement for Care Costs