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How to prepare financially for long-term care

Most people will need some type of long-term care as they age — from part-time assistance with the tasks of daily living, such as cooking, cleaning and transportation, to living full-time in a nursing facility. The cost can depend on a range of factors, from where you live to different services and resources you may need. But without a plan to pay for it, a major health issue could quickly deplete the savings you’ve worked so hard to build. These strategies can help ensure a plan is in place so you’ll be better prepared financially for your care as you age.

Plan early
Being proactive by educating yourself early about potential care options and funding sources can make it easier to put a solid plan in place. Commerce Trust Company Client Care Specialist Constance Moore, MA, CSA, CDP, CMC, emphasizes that planning financially for your health needs as you age should be just as high a priority as planning for other major life events, such as college, weddings and retirement. “Planning, or lack of planning, can make a difference between enjoying a high quality of life (think traveling, playing golf, spending time with grandkids) or being forced to choose between paying for medicine and paying for groceries,” she adds.

A major benefit to planning early is the ability to make important decisions when you’re calm and healthy, and before a health crisis hits. The first step you should take is to make sure you have an estate plan in place that includes a will, trustee and designated power of attorney for your healthcare and financial decisions. A power of attorney can ensure that medical decisions are made and bills get paid if you’re unable to do so. Moore recommends talking to those people you select to be trustees, executors and powers of attorney to confirm that they understand their roles and accept the responsibility.

Next, think about potential housing options. For instance, do you envision staying in your own home, moving into a senior or assisted living facility, or perhaps living with family members?

Leverage all of your available resources
Investigate your options for funding long-term care ahead of time. As you approach retirement, you may want to consider a long-term care insurance policy to help cover expenses related to at-home care, assisted living or nursing facilities. These policies can help with costs related to assistance with personal tasks — like housework and preparing meals — that health insurance, Medicare and Medicaid may not fully cover.

In addition to a long-term care policy, you can also use these sources to help pay for expenses:

  • VA benefits
  • Medicare or Medicaid (note that Medicare covers skilled services like rehabilitative and nursing home care, but does not cover assistance with daily living, which can make up a majority of long-term care needs)
  • Life insurance
  • Disability insurance
  • Trusts
  • Additional options like retirement accounts, pensions, real estate, savings and Social Security income


Take a team approach
Communicating your wishes and plans with loved ones well in advance of needing care is a crucial part of successful long-term care planning, explains Moore. “Having conversations and getting everyone on the same page can save families emotional and financial distress,” she adds.

In addition to family members and loved ones, be sure to communicate your plans with key contacts including financial, tax and insurance advisors, attorneys and members of your care team. Be sure people know how and where to access important documents like insurance policies, health records and financial accounts, in the event that you become incapacitated.

For additional information, checklists and resources on planning and paying for long-term care, visit these helpful resources:


We’re here to help. Contact Commerce Trust Company to connect with a member of our trust services team who can answer your questions and provide assistance with estate planning, eldercare services and more.

Also See

How to talk to aging parents about their finances.

Preserving your assets: Do you have the right estate plan in place?