The Basics Of Long-Term Care And How To Plan For It

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Published by Mark Ring, Managing Partner, Founding Partner, and Wealth Advisor


You’ve spent decades carefully planning and saving. You’ve made sacrifices, you’ve invested, and you’ve done everything within your power to secure a strong financial future in retirement.

But maybe you have overlooked one of the most common hazards to long-term financial security: being prepared for long-term healthcare situations.

What Is Long-Term Care?

Susan was making coffee on a Thursday morning, and she was running late. In her haste to get out the door, she tripped over what she decided later was a poorly placed umbrella stand. Her mind told her to catch her fall, but her heart told her to save the coffee.

She took a hard knock to her lower back. She was shaken, but she got up and hurried on; she had to beat the traffic. Susan had no idea that as a result of that injury, she was going to need assisted living at age 78. From ages 78-94, she lived in an assisted living home for $4,000/mo.

Long-term care is the service offered to anyone who (at any age) becomes unable to care for themselves independently. This could be caused by a decreased mobility due to arthritis, care needed for dementia, Alzheimer’s, or any other number of debilitating situations.


What Is The Risk?

If a retiree is put in a position of needing long-term care and they are not prepared for it, the risk is possibly putting their entire nest egg in jeopardy.

Let’s talk about Susan again. Before the incident, she was living fairly comfortably off of a $500,000 retirement account and Social Security. Now she has an extra $48,000/year coming off the nest egg, and she could be short of funds in only a few years.

The immediate danger is simply that even the most robust retirement account is going to struggle under the strain of a hefty long-term care expense. You are one health incident away from a financial disaster.

Secondarily, the danger expands to your loved ones. In the best case, they will see their inheritance eaten up and diminished. In a worst-case scenario, your loved ones may even need to shoulder the financial burden of continuing to pay for long-term care after your resources have dried up.


How To Plan To Protect Your Future

There is an insurance product available that is designed to mitigate the risk of long-term care. It is cleverly called “long-term care insurance.”

No well-rounded financial plan is complete if it fails to address risk management on this level. It is a serious risk and needs to be evaluated as early in the financial planning stages as possible.

Most people don’t feel any great urgency to get this ironed out when they are young, but there are a few important factors to consider.

  • Rates for long-term care insurance are significantly lower when you are young than when you are pushing 65.
  • There is no guarantee that you won’t encounter a disqualifying event that prevents you from being able to get long-term care insurance at any age.
  • There is a possibility that long-term care might be needed long before retirement, and you do not want to be caught without it at any age.


If you haven’t secured coverage for long-term care, don’t procrastinate and put your future at risk. Schedule an appointment today to sit down with one of our advisors and walk through your risk management plan as soon as possible.

Contact our office by calling 410-821-6724 or emailing


About Jacob William Advisory

Jacob William Advisory’s mission is to empower their clients toward pursuing their financial objectives through the principles of proactive communication, education, and disciplined processes and service. They are a wealth management firm focused on leading their clients toward their definition of True Wealth. Located in Timonium, Maryland, and having a local and national presence, their team provides the highest level of service for affluent families, business owners, executives, and institutions.

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