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Do You Have a Long-Term Care Plan?

By Michael Nedreski

Sometimes in life, it pays to take a chance—especially when negotiating a big contract, expanding the business, or hiring a key employee. But there is one area where taking a risk typically won't pay off: failing to establish a long-term care plan.

Let's face it, most of us don't daydream about getting older. But between aging family members and aching joints, we're constantly reminded of the reality of aging. The truth is, these golden years could be some of the best and most beautiful times in your life if you take the time to create a solid long-term care plan before you need it. 

True long-term planning is designed so you'll have comfort and flexibility for the future—without sacrificing today. Let's discuss the potential benefits of long-term care planning and some additional considerations to keep in mind should you need assistance later in life.

What Is Long-Term Care?

Long-term care refers to a wide range of services designed to aid individuals with chronic illnesses or disabilities. It goes beyond medical care and includes assistance with daily activities like bathing, dressing, eating, or even managing medications.

If you aren't able to do these on your own, you'll need assistance. While research shows that 7 out of 10 of people will need long-term care services at some point in their lives, (1) many adults haven't thought ahead to plan for those later years. The need for these services can be sudden, and the associated costs can be high. No one wants to rely on family or government programs for long-term healthcare—nor do they want to stress about every what-if scenario. 

But before we talk about planning strategies, let's discuss what not to do.

Avoid these Common Mistakes

One of the biggest mistakes you can make is underestimating just how much it will cost. The average national monthly cost for an in-home health aide is $5,625 and assisted living facilities cost $4,917 a month on average. (2) Since the types of future ailments any of us may have vary greatly, the cost associated with that care will also vary. 

Another common mistake is assuming that your spouse or children will take care of you. The truth is your spouse will likely struggle to handle the physical demands of this care, and your kids will have their own lives and responsibilities to manage, even if they want to help.

Plus, there's a common misconception that long-term care only applies to the elderly. In reality, anyone might need it due to an unexpected illness or accident, making it a crucial aspect of comprehensive financial planning.

Lastly, even if you do invest in a LTC care policy, it's key to know exactly what it includes and what it doesn't. Don't assume it covers everything—there might be limitations. If you understand these details upfront, you can make more informed decisions about your coverage.

How to Cover Your Long-Term Care Needs

Long-term care insurance offers financial protection by reimbursing policyholders for a portion of the expenses incurred for long-term care services. LTC policies can provide the resources needed to prevent being a burden and allow you to choose how, when, and where you receive care. 

Many people think LTC insurance is only for traditional nursing homes or skilled care facilities. Most policies today cover much more. These policies often come with various coverage options and benefit levels, which allow you to customize your coverage based on your individual needs and budget. Plus, if you plan early, you could invest in more comprehensive coverage at potentially lower costs.

Since there are many factors to consider when evaluating policies, it's important to work with an independent financial advisor to tailor a solution to your specific needs. With such a wide variety of options in the marketplace, this isn't an investment you should make without proper due diligence.

Potential Tax Benefits

If you're a business owner, it's important to consider the potential tax advantages of owning a long-term care policy. LTC plans offer tax-qualified benefits, meaning premiums may be deductible as a business expense. 

Additionally, if a business sponsors an LTC policy for employees, it can lead to tax benefits for both the employer and the employee. This can be a strategic move for business owners looking to safeguard personal assets and plan for future care needs, while also benefiting from tax deductions.

What About the Medicaid Partnership Program?

Several states offer LTC insurance partnership programs alongside Medicaid, providing a unique opportunity to shield assets. If your state backs the State LTC Insurance Partnership Program, getting an LTC policy is a win-win. Once you exhaust the policy benefits, you can then apply for Medicaid, without having to drain down your assets to meet their strict criteria.

What's more, this strategic move may preserve your estate—up to the value of the LTC benefit—from Medicaid Estate Recovery. This means you can safeguard your assets, keep them intact for your heirs, and gain access to Medicaid assistance when required. It's a balance of maintaining your legacy and securing essential support in times of need while providing a solid foundation for your family's financial future.

Let's Put Your Plan in Place

If you start to plan your long-term care needs today, you can give yourself the comfort and confidence you deserve. With proper consideration, your LTC plan can play out in the background, while you live out the golden years of your life. 

At White Oak Wealth Partners, our mission is to help people live a balanced and fulfilled life through smarter financial planning. We understand planning goes far deeper than the numbers on paper—especially when it comes to your long-term care needs.

Why wait until later in life to start planning for your long-term healthcare? To get started, contact us by calling 814-835-4551, emailing MICHAEL.NEDRESKI@LPL.COM, or scheduling an appointment here.

About Michael

Michael Nedreski is managing partner at White Oak Wealth Partners, a specialized financial lifestyle and wealth management firm serving entrepreneurs, business owners, executives, and their families. Mike has 30-plus years of experience in the financial services industry and is committed to serving his clients through holistic financial planning, disciplined investment strategies, and proactive personal service. Mike and his team are continuously looking for innovative and proactive ways in which to serve their clients, acting as their independent wealth coach and personal CFO. 

A native of Erie, Pennsylvania, Mike began his career in the financial services industry in 1988. He has earned the Chartered Retirement Planning CounselorSM (CRPC®) conferred by College for Financial Planning and Life Underwriting Training Council Fellow (LUTCF) designations. Mike is also an active member of the Financial Services Institute (FSI) and Financial Planning Association (FPA).

When not working, Mike enjoys spending time with his wife, Amy, and their children. He volunteers in his community and at his church and his children's schools. An outdoors enthusiast, Mike loves hunting, fishing, golfing, and spending time near or on the water. He also enjoys working out and watching some of his favorite sports teams, the Pittsburgh Pirates and the Cleveland Browns. To learn more about Michael, connect with him on LinkedIn.

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(1) LongTermCare.gov, February 18, 2020

(2) Genworth, 2023