The Talk No One Wants to Have: Planning for Long-Term Care

The Talk No One Wants to Have: Planning for Long-Term Care

No one wants to think about old age, incapacitation, and the long, slow slide toward the grave.

God forbid it should happen to you, or to your loved ones. But as the Baby Boomers age, more and more Americans are retiring, and these retirees are expected to live longer than their parents did. They’ll spend more years in retirement than any generation ever. And this has some very significant implications.

Longevity has its price, and that price is an increasing likelihood of debilitating chronic conditions that can render a person unable to live on their own or meet all of their self-care needs. A person who lives past 100, or even into their nineties, could potentially need a decade or more of care. A study by Lincoln Financial found that retirees who experience an unplanned need for long-term care spend down their savings two to three times faster than expected. That is an unpleasant surprise indeed.

With such potential for a significant and draining expense, long-term care should clearly be an important component in any retirement plan. However, Lincoln Financial’s survey found that while nine out of ten respondents believe that it is important to plan for long-term care expenses, only just shy of half (49%) have made any steps in this direction. Families are overwhelmingly concerned about the potentially huge burden of long-term care costs, but only a third of the survey respondents believe that they will have the financial resources to meet long-term care needs.

Despite the seriousness of this issue, families frequently fail to discuss how to plan for long-term care needs. It’s a difficult conversation, fraught on every side. Older generations fear becoming a burden on their families even more than the consequences of depleting their savings. In fact, 65% of survey respondents cited fears of becoming a burden, while only 35% cited the fear of spending all their savings as their greatest concern.

Given the hesitance of both parents and children to discuss a painful topic, families end up making many dangerous assumptions. Many retirees assume their children will care for them, but that may not be possible for any number of reasons. Without discussion and planning, a family member may end up in a situation they never envisioned and didn’t plan for, a situation that could be inimical to their personal wishes and needs.

There are important questions that need to be addressed by every member of the family. For aging family members, making preferences known is crucial. Is remaining in the family home a priority? What about moving to a smaller home? Is an assisted living facility a possibility, or is in-home care the goal? If both spouses are alive, will one be able to care for the other? Does the aging family member want to be cared for by family, or by professional aides? What would be the emotional impact of being cared for by a child? By strangers?

For the child with aging parents, there are also very serious questions to be answered. In the Lincoln Financial survey, 63% of family caregivers surveyed admitted they had no idea how demanding such a role would be. Of all respondents, 73% expressed fears that they wouldn’t be able to provide an adequate level of care should family members require their assistance. Caregiving is deeply demanding, both physically and emotionally, and would require taking time away from career and family. A child must balance the demands of caregiving against the competing demands of making a living and caring for their own children.

In addition to the physical act of caregiving, there are other issues that require deep consideration too. As a person ages, they may become cognitively as well as physically impaired, and incapable of making decisions about their own care. With whom will the responsibility of making health care decisions lie? It’s important to make sure that families complete an advanced healthcare directive that makes the patient’s wishes known and assigns decision-making responsibility.

Once the healthcare directive is in place, there’s also the issue of finances. Families need to have a frank discussion regarding how costs will be covered. Research is important, as families need a realistic picture of what care costs, what Medicare covers, and how care can be integrated into the retiree’s financial plan. Families should be aware that Medicare doesn’t pay for most long-term care related costs, and Medicaid is only available when assets have been spent down and income is limited.

Planning for long-term care needs should start early. While there’s no firmly set age, many advisors agree that 50 is the right age to begin thinking about long-term needs. While financial planning is critical, it’s also imperative to make sure that important legal documents are in order. A living will, a durable power of attorney, a healthcare proxy and a will are the minimum documents that everyone should have in place.

A financial advisor can play a critical role in helping families plan for future long-term care needs. Nine out of ten Lincoln Financial survey respondents agree that financial advisors should be included in conversations between aging parents and their children. An advisor can offer insight into strategies that can protect retirement assets from the ravages of long-term care costs. Moreover, an advisor can help facilitate conversations between families and guide them through the planning process to create long-term financial plans that will contribute to a lifetime of financial security.


*Survey from Versta Research, “2017 LTC Marketing and Thought Leadership Research, Findings from Surveys of Advisors and Consumers,

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