Few conversations are more difficult than talking about long-term care. Whether you’re helping aging parents navigate these decisions or planning ahead for your own future, the choices often involve more than finances. They involve family, independence, and honoring someone’s wishes.
One of the greatest gifts you can give your family is making your wishes known before a crisis occurs. If you’re planning for your own future, don’t assume your children know what you would want. Would you prefer to remain in your home as long as possible? Under what circumstances would you be comfortable moving to an assisted living community? Having these conversations early can spare your loved ones from having to guess during an already difficult time.
Questions about long-term care can feel overwhelming. How do you know it’s time for extra help? What are your options? How will you pay for them? At Flynn Wealth Partners, we’ve helped many families navigate these conversations as part of their broader financial and estate planning. While every family’s situation is unique, planning ahead can provide greater clarity, preserve more options, and help ensure your wishes are honored. This guide walks through some of the key issues to consider.
1. Recognize When Long-Term Care Is Needed
Recognizing when additional care is needed isn’t always easy. Whether you’re concerned about a parent or beginning to think about your own future, it’s important to recognize the signs that extra support may improve both safety and quality of life.
How to Know It’s Time for Extra Help
Often, the need for long-term care develops gradually rather than all at once. Paying attention to small changes can help families address concerns before they become a crisis.
It’s not always obvious when a loved one needs additional care. Some signs to look for include:
- Physical difficulties: Struggling with daily tasks like cooking, bathing, or dressing
- Cognitive changes: Memory loss, confusion, or difficulty making decisions
- Emotional shifts: Increased isolation, mood swings, or signs of depression
- Medical concerns: Frequent falls, worsening chronic conditions, or repeated hospital visits
Understanding Levels of Care
Not all care looks the same. Depending on the level of care your loved one needs, you have several options for support levels:
- In-Home Care: Support with everyday tasks while staying in the comfort of home
- Assisted Living: A community setting offering meals, personal care, and social activities
- Memory Care: Specialized facilities for loved ones with dementia or Alzheimer’s
- Skilled Nursing Facilities: Around-the-clock medical care for more complex health needs
- Continuing Care Retirement Communities: Offer a variety of living options and care services that allow residents to remain in the same community as their care needs change
As you evaluate these options with your healthcare providers and family, Flynn Wealth Partners can help you evaluate the financial implications of these life transitions and how they fit within your overall financial plan.
2. Understand the Costs of Long-Term Care and How to Plan Ahead
Anyone looking for long-term care for a loved one has likely had to address the potential for expensive facilities and wonder how they’ll pay for them. But how much does it really cost? As of today, these are average costs for long-term care in Michigan.
- In-Home Care: While this can typically cost $10-$28 per hour, the total can vary depending on the level of service.
- Assisted Living: The national average is around $4,500 per month, but Michigan’s costs vary by city.
- Skilled Nursing: A private room in Michigan costs over $9,000 per month on average
- Continuing Care Retirement Communities: Generally, there is a one-time entrance fee and then a monthly fee.
3. Have Conversations Early
One of the greatest gifts you can give your family is having these conversations before they’re needed. When everyone is calm, it’s much easier to talk openly, understand one another’s wishes, and make thoughtful decisions together. While these conversations aren’t always easy, planning ahead can provide greater peace of mind for everyone involved.
How to Approach the Topic
Because this is such a sensitive topic for many, we recommend discussing long-term care decisions long before you need the services:
- Choose the right moment: Bring up the topic during a quiet, low-stress time.
- Focus on their preferences: “What would make you feel most comfortable as you age?”
- Address fears gently: Reassure them you want to plan for the future, not take away their independence.
Documents You’ll Need
Once you’ve had this important discussion and understand your loved one’s wishes, it’s important to put the appropriate legal documents in place while they’re still able to do so. If cognitive decline progresses too far, they may no longer have the legal capacity to sign powers of attorney or other key planning documents.
You’ll need legal documents such as:
- Powers of attorney (financial and healthcare).
- A living will that outlines their medical preferences.
- A last will and testament to organize their estate.
Taking these steps early provides clarity, helps ensure your wishes can be carried out, and avoids last-minute scrambling. Having these documents organized and readily accessible can make an already difficult situation much easier for your family.
4. Choose the Right Facility
If your loved one needs a level of long-term care that involves relocating to a facility, taking time to choose the right one can make a meaningful difference. While it may be tempting to select the first available option or the one closest to home, it’s worth taking time to research and compare your choices.
What to Look for in a Care Facility
When looking for a long-term care facility, you’ll want to research potential locations and visit each one in person. Whenever possible, involve your loved one in the decision-making process. Giving them a voice in the conversation can help preserve their dignity and make the transition a little easier.
When selecting a facility, you’ll want to consider:
- Location: Is it close enough for family visits?
- Quality of care: Check reviews and ask about staff training and turnover rates.
- Amenities: What activities and services are available?
- Environment: Does it feel welcoming and safe?
- Staff responsiveness: How quickly do they respond to your queries? Who’s available if you have questions?
Again, it helps to start looking early because many facilities have long waitlists.
Questions to Ask on Tours
After narrowing your search to a few potential candidates, request tours of each. During your tour, don’t hesitate to ask questions, and find out who to contact if additional questions come up afterward. Here are a few to get you started:
- How do you handle medical emergencies?
- What’s included in the monthly fee? What costs extra?
- What social activities and engagement opportunities do you offer?
- What level of care can the facility support, and what happens if your loved one later requires a higher level of care?
Flynn Wealth Partners can help you understand the financial implications of each option and how they fit within your overall financial plan.
How to Plan Financially
Regardless of which long-term care option your loved one needs, these are not small costs. That makes it all the more important to have a financial plan together long before you need it.
Regardless of which long-term care option your loved one needs, these are not small costs. That makes it all the more important to have a financial plan in place. Flynn Wealth Partners can help you understand your options and prepare for the financial impact of long-term care while keeping your broader financial goals in mind.
Some planning options include:
Long-Term Care Insurance
Unlike health care insurance, which focuses on promoting good health and treatment, long-term care insurance helps your loved one maintain their levels of physical and mental health as much as possible. Long-term health insurance can be bought on the private market or as an employee benefit.
Long-term care insurance can be an effective planning tool for some families, but because premiums can be expensive and eligibility depends on your health, it isn’t the right solution for everyone.
Purchasing long-term care insurance provides for the cost of your loved one’s care, including bathing, dressing, eating, toileting, and transferring from a seat or wheelchair to bed. Long-term care insurance covers a variety of types of care, such as:
- Nursing care
- Home health care
- Adult day care
- Respite care
- Assisted Living
- Rehabilitation
- Hospice
Savings and Investments
Families who plan to self-fund long-term care often need substantial liquid assets. Some experts suggest having between $300,000 and $700,000 in liquid, accessible assets. This may include funds from traditional and Roth IRAs, 401(k) plans, and taxable investment accounts. While your home value doesn’t count as a liquid asset, calculating how selling it (or downsizing) could boost your ability to pay for long-term care.
Long-Term Care Annuities
Another option gaining popularity is a long-term care annuity. This hybrid approach combines elements of insurance and savings. A single premium payment creates a pool of money that can be used to help cover qualified long-term care expenses.
Health Savings Accounts (HSAs)
Tax-advantaged accounts, like health savings accounts (HSAs), can help ease the financial burden of long-term care. For example, HSA funds can be used to pay a portion of long-term care insurance premiums. The allowable amount is graduated according to age. The tax-free limit is $450 for those 40 or younger, $850 for 40-50 year olds, and up to $5,640 for those 71 or older.
Veterans Benefits
Additional programs exist for eligible veterans and their families through the Department of Veterans Affairs (VA). If you’re a veteran or a family member, these programs allow you to access long-term care benefits like in-home care, residential settings, and nursing home care.
- In-home care includes services like home health aides, homemaker services, and respite care to support veterans in their own homes.
- Community living centers operate as nursing homes for veterans and their families; however, the VA can also help with placement in other community nursing homes.
- While the VA doesn’t cover room and board in assisted living facilities, it can provide some at-home services while the veteran lives in one of these facilities.
Each option comes with its own pros and cons. That’s why it’s so important to speak with a professional financial advisor about your unique situation to determine which options would make the most sense for you.
Taking Action: Your Next Steps
Understanding your long-term care options is an important first step toward making informed decisions for yourself or your loved ones.
To Review:
- Assess current needs: Is your loved one showing signs that additional care is necessary?
- Understand the costs: Learn how different care options may affect your financial plan.
- Start the conversation: Begin discussing preferences with your loved one.
- Explore options: Visit facilities, research costs, and learn about financial assistance programs.
- Create a financial plan: Work with an advisor to determine how you’ll pay for care.
Why Work with Flynn Wealth Partners?
Deciding how to pay for long-term care is a balancing act. You want to prepare for the financial impact while helping your loved one receive the care they need. Flynn Wealth Partners can help you evaluate your options and understand how long-term care fits within your overall financial plan.
At Flynn Wealth Partners, we help Michigan families navigate the financial aspects of long-term care planning. If you have questions about costs or how long-term care fits into your financial plan, we’re here to help.
Start building a plan that gives your family greater confidence and peace of mind. Contact Flynn Wealth Partners today.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
Investing includes risks, including fluctuating prices and loss of principal. No strategy assures success or protects against loss.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.