Suppose you suffer a debilitating accident or a devastating stroke (these affect both young and old) and you are unable to care for yourself, temporarily or permanently. You might think, “How would I handle that?” First, with the assistance of loved ones, and second, with pre-planning for long term care.

Long term care can be expensive and location-dependent. The median cost in the U.S. in 2024 was:

• $30-$40 per hour for in-home care
• $4,000 to $6,000 per month for assisted living
• $100,000 per year for nursing home care
  
  

This is not petty cash. Outlays such as these require careful planning. Fortunately, there are some ways to handle these expenses, such as:

Insurance Products

A long term care insurance policy may cover home care, adult day care, assisted living, and nursing facilities. Your age, health metrics, and amount of coverage desired establish the premium base. Both the premium and the coverage can have inflation increments built in. These premiums are much more affordable in the mid-40s or 50s ages.

Hybrid life insurance with a long term care rider may be purchased. The policy accelerates the death benefit as you use it. Any remaining policy value passes to beneficiaries as a death benefit.

[FROM MILITARY OFFICER MAGAZINE: Planning for Long Term Care]

Self-Funding

An annuity you own might offer a long term care payout or a guaranteed income stream that can be applied to health costs.

You could also use your personal savings, investment accounts, or retirement accounts to pay for care.

Another option might be converting your homestead and/or vacation home to a rental to create an income stream. These are emotional decisions. However, your home or vacation home might no longer be suitable for the new reality of your living needs. Use a professional to establish the lease, price, and conditions. It might be possible to preserve that family reunion tradition by carving out that time frame from the leases. Review any income tax complications this action may pose.

[RELATED: Medicare Trustees Report Estimates Next 9 Years of Part B Premiums]

Reverse mortgages are a possibility for those age 62 and over. These convert your home equity into tax-free income that you can use to pay for care. These products are extremely complicated depending on your long-term housing needs and financial situation. Ask a lot of questions.

Your assets are your tools to finance your new life situation. Most state and federal programs require you to spend them down before you use their aid. Please seek the advice of your family, a financial planner, or trusted advisor before you act.

Safety Nets

Medicaid is a federal government program administered by the states. It covers long-term care for those with limited income and assets. States have their unique guidelines, but most require a spend-down of assets before applying for aid. Speak to an elder law attorney or advisor. They might be able to help preserve some of your estate before qualifying for eligibility. The states have different requirements on assets, income caps, and state residency. Also, not all nursing facilities accept Medicaid.

The VA’s Aid and Attendance program is a means-tested benefit available to qualifying veterans and their spouses. This assistance should be explored with an accredited veterans service officer.

[RELATED: VA Aid and Attendance]

Thoughtful analysis of preparations and solutions for life’s possibilities can help you ask intelligent questions, make informed decisions, and attend to needs. Your actions will benefit you and your family.