Aging Options

Some Tips to Help You Self-Insure for Long Term Care

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Here’s a “good news, bad news” pair of statistics. If you’re 65 years old, the odds are excellent that you’ll live about two more decades. That’s the good news. The bad news: the odds are slightly better than 50/50 that at some point you’ll need some form of long term care and support.

So the solution is to buy long-term care insurance, right? Theoretically, LTC insurance is the best way to protect against the cost of care, which averages nearly $140,000 per patient, almost none of which is covered by Medicare. But for many low and middle income adults, long term care insurance premiums are prohibitively high. Consider the fact that, last year, the industry sold about 100,000 long term care insurance policies, even though more than 3 million Americans celebrated their 65th birthday. Clearly many boomers are choosing to (or being forced to) remain insured for what can be a catastrophic expense.

We found this recent article on the website It asks the question, “Can you self-insure for long term care?” The answer is “maybe” – but only if you get started with a solid plan, something we strongly advocate. Here are some of the ideas the NextAvenue author suggests. See if any of these might work in your situation.

Self-funding for long term care is a daunting prospect but you can make headway if you have a laser-like focus on both spending and saving. When it comes to saving, even if you’re in your 50’s or 60’s, you still have two or three more decades to set aside some funds, since long term care expenses typically don’t begin until patients are in their 80’s. ​Find every possible way to save – which for many of means finding every possible way to cut our spending.

Start with where and how you live. When it comes to housing expense, generally the biggest category of spending for seniors, experts quoted in the NextAvenue article say it pays to get rid of your mortgage if you can, and to save your home equity until you really need it. (This is where a Home Equity Conversion Mortgage line of credit can come in handy — click here to read a very recent article from our blog about this helpful financial tool.) But you may also want to consider a different kind of living situation entirely. The NextAvenue article explains some relatively new concepts including co-housing, home-sharing, and other communal living arrangements that reduce your living costs. We expect more of these types of housing innovations to come on the scene as boomers age.

After you’ve maximized your savings and minimized your expenses in order to set aside some long term care funds, you can still live quite happily and enjoy your retirement years. According to a 2014 study by T. Rowe Price, 40% of recently retired boomers reported living a very satisfying life on 60% or less of their pre-retirement earnings.

Even if you’re trying to self-insure, there may still be a place in your financial plan for long term care insurance. The NextAvenue article suggests you might want “add a thin layer of coverage on top of your DIY plan.” Shortening the benefit period and reducing the monthly benefit can significantly reduce premiums and fill in some gaps in your coverage.

Here at AgingOptions we can help you make a plan that takes all these long term care considerations into account. There are ways, for example, to make certain you qualify for Medicaid without having to impoverish yourself. There are long term care strategies you may want to consider, and veterans’ benefits for which you may qualify. If your goal, like that of almost every client we deal with, is to avoid unplanned institutional care and escape the pain of being a burden to your loved ones, let us help you. Together we’ll put together a plan (called a LifePlan) that helps you prepare for retirement with confidence.

The perfect first step is to attend one of our free information-packed LifePlanning Seminars. These are held in locations throughout the area. Space is limited, though, so click on the Upcoming Events tab for dates and times, and register today. It will be our pleasure working with you on an individualized retirement plan that’s perfect for your situation.

(originally reported at

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