I hear it all the time from AMAC members: “Frank, I take care of myself; why would I ever need long-term care?” It’s a fair question. And the answer may surprise you.
Here’s the truth: the healthier you are, the more likely you are to need long-term care. Good health means a longer life, and the longer we live, the higher the odds that we’ll need help at some point. According to current data, three out of four Americans who reach age 65 will require some form of long-term care. And the fastest-growing age group in America? Those over 90. At that stage, needing assistance with daily life isn’t a possibility; it’s a probability.
What Long-Term Care Actually Covers
Long-term care isn’t what most people picture. It’s not a hospital stay or a surgery. It’s the ongoing, everyday help that Medicare won’t pay for—things like bathing, dressing, getting around, or managing the effects of cognitive decline. Medicare covers up to 100 days of skilled nursing care, and only after a qualifying hospital stay. After that, the bill is yours.
The Real Cost of Care
Take a look at what care actually costs annually in today’s dollars.
- California — Home Care: $91,038 · Assisted Living: $88,599 · Nursing Home: $144,233
- Texas — Home Care: $67,670 · Assisted Living: $62,762 · Nursing Home: $72,708
- Florida — Home Care: $69,510 · Assisted Living: $63,929 · Nursing Home: $129,457
These aren’t worst-case projections. This is the going rate, right now. And even relying on family members for care carries real financial costs that often go uncounted.
The Hidden Tax Trap No One Talks About
In my last article, I wrote about the importance of managing Required Minimum Distributions (RMDs) for better tax efficiency in retirement. Long-term care planning fits directly into that conversation—because for many of you, it’s where the two issues collide.
Many AMAC members have built the bulk of their retirement savings inside tax-deferred accounts like IRAs and 401(k)s. These are powerful tools, but they come with a serious vulnerability: when care is needed and no plan is in place, retirees are often forced to make large, unplanned withdrawals to cover the cost. Every dollar pulled out is taxed as ordinary income. That can push you into a higher bracket at the exact moment you can least afford it, accelerating the drain on the savings you’ve spent a lifetime building.
Rising care costs. Rising tax burden. At the same time. That’s the compounding problem no one plans for, until it’s too late to avoid it.
The Best Time to Plan Is Before You Need To
For AMAC members, the goal has always been the same: preserve your independence, protect your dignity, and safeguard the assets you’ve worked so hard to build. That’s exactly what proactive long-term care planning makes possible.
There’s no single solution that works for everyone. The right approach may involve repositioning existing assets, setting aside dedicated reserves, or incorporating insurance-based strategies. But here’s what I know for certain: your options are greatest when you’re still healthy, and they narrow quickly once you’re not.
Don’t wait until a health event makes this decision for you. The cost of waiting is high financially, emotionally, and for the people you love. If you haven’t had this conversation yet, now is the time. For more information on Long Term Care planning, please visit amac.us/LTC.
God Bless,
Frank Kestler
Financial Advisor, Rosemark Advisors
Join the conversation
Comments