How to Plan for Long-Term Care Without Wiping Out Your Savings

Here’s exactly how I would think about long-term care without having to wipe out my savings. I'm Tyler, a former financial advisor and portfolio manager, and I create financial content for free to help you navigate your planning.

1. Understanding Medicare Limitations

First, remember, Medicare doesn't cover long-term care. It only covers short rehab stays. If you need care at home or in a nursing facility in a country like the US that seems to dismiss its elders, you're on your own unless you qualify for Medicaid, which means you would have had to spend down your assets anyway.

2. Get Coverage Early

Second, get coverage earlier rather than later. Once you're over 60, long-term care gets ridiculously expensive. If you wait much longer, you might not even qualify for coverage. Consider a hybrid policy that combines life insurance with long-term care benefits. If you don’t use the care, your heirs could at least get the life insurance payout.

3. Self-Insurance Strategy

Third, know how much you might need for self-insurance. This is the route I plan to take, meaning your assets will cover your long-term care needs. By using a dedicated healthcare fund like an HSA or a taxable brokerage account, you’re likely in a much better position to self-insure. Just ensure some of those assets are liquid and stable.

4. The Importance of Planning

The only mistake you can make is not planning at all. If any of this information is helpful, please sign up for my free newsletter by clicking the link in my bio. Each Sunday, I’ll send you over some more insights to help you optimize your retirement planning.

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