The Cost of Long-Term Care

Posted By The Nalls Sherbakoff Group, LLC on May 2, 2022


“Not all of us can do great things.  But we can do small things with great love.”

Mother Teresa – Catholic Saint

For many people, it is difficult to think about the possibility of needing long-term care.  According to a recent study by the U.S. Department of Health, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services in their remaining years.  When it comes to planning a safe and secure retirement, long-term care remains a confusing and unaddressed challenge to many people’s financial security. 

What is Long-Term Care?

Long-term care is a range of services designed to support people who need hands-on help with basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs).  These activities include bathing, dressing, toileting, transferring (from bed to chair), and eating.  Other common long-term care services include assistance with everyday tasks such as housework, taking medication, shopping for groceries, and caring for pets.

Long-term care can take place in a variety of settings:

  • At-home: with the help of family, home health aides, visiting nurses, or therapists
  • Community-based: adult day care service centers, transportation services, home care agencies
  • Facility-based: independent or assisted living, continuing care retirement community (CCRC)
  • Nursing home: nursing care and 24-hour supervision

How Much Does Long-Term Care Cost?

The cost varies based on care setting, geographic location, and level of care required.  Using Genworth’s Cost of Care Survey for Knoxville, Tennessee (Zip Code 37919) annual in-home care costs for 2021 averaged $57,086 while assisted living averaged $45,870. 

Who Pays for Long-Term Care?

One of the most common misconceptions is that Medicare will pay for long-term care expenses.  Medicare pays for limited, short-term care (less than 90 days) that includes skilling nursing and/or therapy.  Medicare does not pay for independent or assisted living support services.

Other options include personal savings, long-term care insurance, reverse mortgages, life insurance options, and annuities.  Medicaid may be used by low-income people with under $2,000 in assets.

What Should I Consider?

To feel safe and secure about your retirement plan, you need a custom approach for how you will pay for long-term care.  Your financial goal plan should include the possibility of needing long-term care during your or your spouse’s lifetime.  We recommend considering these questions:

  1. Who will provide the care?
  2. Where do you want the care?
  3. How will you pay for the care?

Please reach out to your advisor if you would like to discuss the three questions above, your long-term care plan, or if you have any other questions or concerns.