How Women Approaching Retirement Should Plan for Long-Term Care Costs

As people live longer, the need for long-term care planning becomes more immediate, and more personal. A future need for help with daily activities, health care, or supervision can create practical challenges for families and significant pressure on retirement savings. Preparing early gives you more choices, more time to compare coverage options, and a clearer plan for protecting the life you have worked to build.

This is especially true for women approaching retirement, who statistically live longer than men and are more likely to need extended care, as well as for divorced women rebuilding a financial plan on their own and small business owners weighing how a future care need might affect the business they've built. Long-term care is not only a health care question. It is a financial planning and family-planning question that deserves thoughtful attention before a crisis forces decisions.

At KK Financial Solutions, I help clients in Surprise, Arizona, and beyond consider how potential care needs may fit into a broader retirement, insurance, and estate planning strategy.

What Long-Term Care Means

Long-term care refers to ongoing assistance for people who can no longer independently perform everyday activities such as bathing, dressing, eating, transferring safely, using the bathroom, or managing medications. It may also be needed because of cognitive decline, including Alzheimer's disease or another form of dementia.

Care can be temporary or extend over years. It is not limited to medical treatment in a hospital. Instead, it often involves personal support, supervision, and services that help a person remain safe and maintain quality of life as their needs change.

Why Costs Continue to Rise

The cost of care has been rising as demand grows, staffing remains difficult, and providers face higher operating expenses. An aging population means more households may need care services at the same time, while labor shortages and inflation can increase the cost of delivering that care.

According to the U.S. Department of Health and Human Services, someone turning 65 today has an almost 70% chance of needing some type of long-term care services and support during their remaining years. The duration and level of care vary widely, which is one reason a personalized plan matters.

National cost surveys regularly show that nursing home care can exceed $100,000 per year for a private room in many markets, based on national averages; actual costs vary by location and provider. Assisted living, in-home care, and home health services may cost less than full-time nursing care, but they can still place a substantial ongoing strain on income and assets. Local costs in Arizona and other states served by KK Financial Solutions can differ, so it is important to use current estimates when evaluating your options.

Common Types of Long-Term Care

• Nursing homes: These facilities provide around-the-clock skilled nursing care and personal assistance for individuals with significant medical or daily living needs.
• Assisted living facilities: Assisted living may offer housing, meals, medication support, supervision, and help with daily routines while allowing more independence than a nursing home.
• Home care and personal care: A caregiver may assist at home with bathing, dressing, meal preparation, transportation, companionship, and other daily tasks.
• Home health care: This care is generally more clinical and may include skilled nursing, therapy, or other health services ordered by a medical professional.
• Adult day care: Adult day programs can provide supervision, activities, meals, and social engagement during the day while also giving family caregivers time to work or rest.

What Medicare Does—and Does Not—Cover

One of the most common misconceptions is that Medicare will pay for long-term care indefinitely. In general, Medicare does not cover ongoing custodial care when that is the only care a person needs. Custodial care includes assistance with daily living activities, such as bathing or dressing.

Medicare may cover certain short-term skilled nursing facility care or medically necessary home health services when specific requirements are met. However, those benefits are limited and should not be treated as a long-term funding plan. Understanding this distinction can help you avoid building a retirement plan around coverage that may not be available when you need it most.

A Step-by-Step Plan for Managing Care Expenses

1. Estimate your potential care needs. Consider your health history, family longevity, living situation, and whether you would prefer to receive care at home or in a community setting.
2. Review income and available assets. Look at retirement income, savings, investments, pensions, Social Security, and assets under management. Identify how much of your resources could reasonably be directed toward care without undermining other financial goals.
3. Evaluate insurance options early. Long-term care insurance may help pay for qualifying care services. Hybrid life insurance policies with living benefits can also provide flexibility by offering a death benefit alongside access to funds for eligible chronic-care needs.
4. Understand Medicaid planning considerations. Medicaid may help cover qualifying long-term care expenses for eligible individuals, but eligibility rules involve income, assets, timing, and state-specific requirements. Early coordination with appropriate legal and financial professionals is essential.
5. Coordinate your estate plan. Wills, trusts, beneficiary designations, powers of attorney, and health care directives should work together with your care plan. These documents can help clarify who may make decisions if you cannot and how your assets should be managed.
6. Revisit the plan regularly. Insurance costs, health needs, family circumstances, and care preferences can change. Reviewing your strategy periodically helps keep it aligned with your goals.

Choosing a Strategy That Fits Your Life

There is no single solution that works for every household. Some people may use a combination of savings, investments, and insurance. Others may prefer to explore annuities designed to support predictable income, while some may prioritize life insurance with living benefits. The right approach depends on your age, health, financial resources, risk tolerance, and legacy goals.

For small business owners, planning may also include considering how business value, a future sale, or business valuations fit into retirement and care funding. For divorced women and others navigating a major life transition, a long-term care plan can be especially important for maintaining independence and reducing uncertainty about future support.

How KK Financial Solutions Can Help

At KK Financial Solutions, I take a holistic view of long-term care planning. Rather than looking at insurance or investments in isolation, I help clients consider how retirement planning, life insurance, annuities, estate planning documents, and managed assets can support one another.

My goal is to help you understand the tradeoffs, ask the right questions, and make informed decisions at a pace that feels manageable. Whether you live in Surprise, AZ, or elsewhere in Arizona, Washington, California, Idaho, Nebraska, Tennessee or surrounding regions, proactive planning can help you feel more prepared for what lies ahead.

FAQ

When should I start planning for long-term care?

It is generally best to begin before an immediate need arises. Planning earlier may provide more insurance choices and gives you time to integrate potential care costs into your retirement and estate planning goals.

Will Medicare pay for a nursing home?

Medicare may cover limited skilled nursing care when eligibility requirements are met, but it generally does not pay for ongoing custodial nursing home care. Long-term care planning should account for this limitation.

Can long-term care insurance pay for care at home?

Many long-term care policies cover qualifying in-home services, assisted living, and nursing home care, although benefits and requirements vary by policy. Reviewing the details before purchasing coverage is important.

How can a trust help with long-term care planning?

A trust may help organize asset management, provide instructions if you become incapacitated, and support broader estate planning goals. Trusts do not automatically protect assets from care costs, so it is important to seek individualized guidance.

What should I bring to a financial planning conversation?

Bring a summary of your income, savings, investments, insurance policies, debts, estate planning documents, and retirement goals. It is also helpful to think about where and how you would prefer to receive care if you needed it.

Rising long-term care costs can feel overwhelming, but waiting until care is needed often limits your options. By taking an early, informed approach, you can explore insurance, savings, income, and estate planning strategies that support your independence and the people you care about. 

KK Financial Solutions can help you build a personalized financial plan designed to address today's priorities while preparing thoughtfully for tomorrow's care needs.

Karen Koenig, MBA, is the founder of KK Financial Solutions, a financial advisory firm in Surprise, Arizona, helping women navigate divorce, retirement, and major life transitions. Learn more about Karen or connect on LinkedIn.