Long-Term Care: The Greatest Threat to Your Retirement Plan (and How to Protect Yourself Now)
October 31, 2025You’ve spent decades saving, investing, and preparing for a retirement filled with travel, family time, and peace of mind. But there’s one powerful threat that can undo all that planning — and most retirees never see it coming until it’s too late.
It’s not inflation. It’s not taxes. It’s long-term care.
November is Long-Term Care Awareness Month, and there’s no better time to face this issue head-on. According to the U.S. Department of Health and Human Services, 70% of Americans age 65 and older will need some form of long-term care before they pass away. Yet fewer than one in ten retirees have a plan to pay for it.
The result? Family strain, emotional exhaustion, and financial devastation that can drain a lifetime of savings in just a few short years.
The Numbers That Should Make Every Retiree Pause
The 2024 Genworth Cost of Care Survey paints a sobering picture:
- Nursing home private room: $120,000+ per year
- Home health aide (44 hours/week): $70,000 per year
- Assisted living facility: $64,000 per year
Multiply those costs over three to five years — and you’re talking about $300,000 to $500,000 of potential out-of-pocket expenses.
Even if you have a seven-figure portfolio, those numbers matter. Long-term care isn’t a one-time event; it’s a sustained financial drain that can easily erode retirement income streams and force families to make impossible choices.
Without a strategy, you risk turning your financial independence into financial dependence.
The Human Cost: A Family’s Wake-Up Call
I’ll never forget working with Susan and Mark, a couple in their late 60s. They had saved $1.4 million — disciplined, smart investors who thought they were set for life.
Then Susan’s mother developed Alzheimer’s. Her care began at home, but within two years she needed around-the-clock supervision. Over six years, nearly all her assets were consumed by care costs.
Watching that experience unfold changed Susan and Mark’s entire perspective. We ran their own projections and saw that a moderate care need could wipe out 40% of their retirement portfolio.
Together, we designed a hybrid long-term care plan — one that provides tax-free benefits if they need care, but also returns a death benefit to their heirs if they don’t.
That’s not just smart planning. That’s love in financial form — the peace of mind that comes from protecting your spouse, your children, and your dignity.
The Myths That Keep Retirees Unprepared
Far too many people ignore long-term care planning because of three costly myths:
Myth #1: “Medicare will cover it.”
It won’t. Medicare only pays for short-term rehabilitation — not ongoing custodial or in-home care.
Myth #2: “My kids will take care of me.”
They might want to, but caregiving takes a toll. Over 60% of family caregivers say their financial, physical, and emotional health suffered as a result of caregiving responsibilities.
Myth #3: “I’ll just pay for it myself.”
That approach assumes your retirement savings can handle a six-figure annual drain for several years. Even high-net-worth clients often underestimate the compounding impact of withdrawing large sums during a market downturn or inflationary period.
The truth is, self-funding without structure isn’t a plan — it’s a gamble.
The Four Smart Paths to Long-Term Care Planning
The good news? You have options — and the sooner you act, the better the results.
- Traditional Long-Term Care Insurance:
These policies reimburse care costs when you need them, whether at home or in a facility. Premiums can increase over time, but benefits can be substantial. - Hybrid Life + LTC Policies:
These combine life insurance with a long-term care rider. If you don’t use the benefits for care, your heirs receive a death benefit. If you do, you can access the policy’s value tax-free. - Annuities with LTC Riders:
For retirees holding low-interest annuities or CDs, an LTC rider can multiply available funds for care — often without requiring new premium payments. - Self-Funding with Structure:
If you have significant assets, you can dedicate a portion to a “care reserve” designed to protect income streams and manage risk. The key is to plan intentionally, not react emotionally when care is needed.
The best approach is often a custom combination, tailored to your risk tolerance, liquidity needs, and family goals.
Why Planning Early Matters
Long-term care planning works best when you’re healthy.
You lock in lower costs, have more choices, and avoid being forced into decisions under stress.
According to the American Association for Long-Term Care Insurance, premiums for a healthy 55-year-old can be 40–60% lower than for someone applying at age 65.
But beyond numbers, early planning provides something priceless: control.
You get to decide how and where you’ll be cared for, instead of letting circumstances make those choices for you.
Your Next Step: Protect Your Wealth, Dignity, and Legacy
Here’s my challenge to you — don’t let long-term care be the blind spot that wrecks your retirement.
Start the conversation today. Talk to your spouse. Reach out to your financial advisor. Run a care-cost projection and see how it fits into your retirement plan.
And as part of Long-Term Care Awareness Month, I’m offering a special gift to help you get started:
I’m giving away 50 free copies of my new book Retire Right to listeners and readers who email me with a referral — a friend, parent, or family member who could benefit from financial clarity and confidence.
Simply email [insert your email] with the subject line “Retire Right Giveaway.”
Because this isn’t just about protecting your money — it’s about protecting your freedom, your family, and your future.
Final Thoughts: The Wisdom to Act Now
Retirement isn’t just about income; it’s about independence.
The best plans don’t just grow wealth — they defend it from the unexpected.
Long-term care isn’t an easy subject to face, but neither is the alternative: watching decades of hard work vanish because of a lack of preparation.
As I often tell my clients, “You can’t predict the future, but you can plan for it.”
And when you do — you not only secure your financial stability, you also give your loved ones the ultimate gift: peace of mind.
