“… In this world nothing can be said to be certain, except death and taxes,” wrote Benjamin Franklin in 1789. Yet data from the U.S. Department of Health and Human Services suggests a third inevitability for many Americans: long-term care. The DHHS reports that roughly 70 percent of people who reach age 65 will need some form of long-term adult care during their lifetimes.
>> See more statistics on the odds of needing long-term care.
Despite these odds, many people underestimate their likelihood of needing assistance as they age. A recent PlanBeyond survey of adults aged 45 to 64 found that two-thirds of respondents underestimated the probability they would require long-term care. Even more concerning, one-third of people aged 55 to 64 believed Medicare would cover long-term care costs—when in fact Medicare generally does not. This misunderstanding helps explain why a significant portion of recent medical bankruptcies involved people 55 and older. Preparing both financially and logistically for long-term care is therefore essential.
The financial costs of long-term adult care
Long-term care costs vary widely by state and by the level of care required, which makes planning challenging. Tools such as AARP’s cost estimator can help you understand potential expenses in your area based on the type and intensity of care needed. Once you have a clearer picture of likely costs, you can evaluate how to cover them.
While some people qualify for public assistance, most will rely at least partly on personal resources. Common funding sources include:
- Long-term care insurance
- Personal income and retirement savings
- Universal life insurance policies
- Annuities
- Reverse mortgages
- Trusts
Long-term care insurance remains a popular way to manage risk, but as life expectancies rise, premiums have increased and policies have become more complex. If you already have a policy or are considering one, review the terms carefully to understand covered services, benefit periods, and inflation protection. For more background, see my previous post, A Concise Explanation of Long-Term Care Insurance—Part I.
>> Related: I’m Moving to a CCRC: Should I Keep My Long-Term Care Insurance?
The logistics of finding a caregiver
Beyond financial planning, identifying reliable caregiving—whether from family or professionals—poses another major challenge. Many assume family members will provide care to reduce costs, but unpaid caregiving carries significant economic and emotional costs. A 2015 AARP Public Policy Institute study found about 43.5 million Americans served as unpaid caregivers over a 12-month period, often losing wages and reducing retirement contributions. Nearly half of those family caregivers spent more than $5,000 of their own money annually on caregiving-related expenses like food, medicine, and household supplies.
>> Related: Senior Living: Is it Really “Cheaper” to Stay at Home?
Hiring non-family caregivers introduces different difficulties: workforce shortages, variable oversight, and cost. Reporting on these challenges, a Washington Post article described one family’s struggle to find trustworthy, consistent in-home care after an older relative experienced multiple falls. Shortages of qualified workers, limited regulation, and the expense of services made it hard to secure appropriate care.
On the positive side, demand for eldercare is increasing, and more agencies and services are emerging to meet that need. Increased competition can improve quality and availability, but it still pays to research providers carefully, check references, verify certifications, and consider trial periods before committing to a long-term arrangement.
Acceptance leads to better planning
Recognizing the likelihood of needing long-term care makes planning easier and more effective. Start thinking early about how you will finance care and who will provide it. Consider a range of possibilities—family caregiving, in-home assistance, assisted living, or continuing care retirement communities (CCRCs)—and weigh the pros and cons of each. Educating yourself and taking steps now can reduce stress and preserve financial security when care is needed.