3 Strategies To Prepare For Long-Term Care Costs In Retirement

When planning for retirement, many people focus on the amount of Social Security they'll receive or whether their 401(k) and other investments will be sufficient. However, it's equally important to consider the potential costs of long-term care. Unanticipated medical expenses and the need for nursing homes or assisted living facilities can lead to significant costs.

Unfortunately, many individuals avoid considering long-term care because they're worried about affordability. However, this is a crucial consideration since most people will require long-term care in their lifetime. Statistics show that a person turning 65 today has about a 70% chance of needing some long-term care service or support in their remaining years.

Here are three ways to prepare:

Explore Long-Term Care Options

With the life expectancy in the U.S. rising to 77.5 years, according to the CDC, it's vital to explore the various long-term care options available. Understanding these options and discussing your preferences with your spouse and family can help ensure your wishes are known when the time comes.

Consider a Health Savings Account (HSA)

If you're still working and planning for retirement, opening a Health Savings Account (HSA) might be wise. An HSA is a tax-advantaged account that can be used at any age to cover qualifying healthcare expenses. To contribute to an HSA, you need to have a high-deductible health plan.

Plan Your Social Security Benefits Wisely

As you approach retirement, it might be tempting to start claiming Social Security benefits as soon as you are eligible at age 62. However, many people are unaware of how their benefits are calculated based on their 35 highest-earning years. Delaying the start of your Social Security benefits can potentially increase your monthly payments, offering a strategic advantage for covering long-term care expenses in the future.