By Brandon Miller–
Let’s talk about something that’s not exactly fun but is super important: long-term care. Millions of older adults and folks with disabilities need help with everyday tasks—things like getting dressed, making meals, or managing medications. This isn’t like nursing a hangover kind of help, but continued, ongoing care. And if you think Medicare’s got your back, well … we need to chat.
But first, if you think you won’t need it, here are some sobering stats according to LongTermCare.gov:
• 7 in 10 people turning 65 today will need some form of long-term care.
• Women tend to need care longer (3.7 years) than men (2.2 years).
• 1 in 5 will require long-term care for more than five years.
If you are one of the 7 of 10, you may be thinking that surely Medicare will cover long-term care—but that’s not the case. A recent survey by KFF (Kaiser Family Foundation) found nearly 1 in 4 adults think Medicare pays for nursing home care (it doesn’t) and 45% of folks 65+ believe Medicare covers long-term care costs (also nope).
Perhaps surprisingly, Medicare does not cover custodial long-term care. It covers hospital stays, doctor visits, limited rehab care, and short-term stays in skilled nursing facilities following hospitalization.
What can cover medical costs, including long-term care, is Medicaid. It’s a state and federal program for people with limited income and assets. It’s also tricky to qualify for. In most states, Medicaid has a 5-year “look-back” period, meaning they’ll check financial transactions to make sure you didn’t give away assets to qualify. In California, this period is shrinking to 30 months and will be completely phased out by July 2026.
Even so, most folks need to look at other options.
Health Savings Account (HSA)Got a high-deductible health plan? You may be able to save in an HSA, which can be used to cover medical costs, including some long-term care insurance premiums. Contributions lower taxable income and grow tax-free. HSA withdrawals for LTC expenses are tax-free, and after 65, you can use HSA funds for anything without penalty (though non-medical withdrawals are taxed as income).
Long-Term Care Insurance (LTCI) LTCI can help cover long-term care costs, but it’s pricey, and you need to be in relatively good health to qualify. We recommend folks seek it out in early to mid 50s. Most policies kick in when you can’t perform at least two of these six activities of daily living (ADLs): Bathing |Using the bathroom | Dressing | Getting in/out of bed | Eating | Managing continence.
Downside? Premiums are rising, and if you can’t afford them later, you could lose your coverage. Be sure to check with your current life insurance provider for add-on options or accelerated benefits too!
Long-Term Care Annuity
Think of this as a hybrid between LTC insurance and a savings plan. You invest a lump sum or make payments over time, and the policy provides a long-term care benefit. If you don’t end up needing care, the money can go to your heirs. Heads up: These products can be complicated and may not provide immediate coverage.
Self-Funding
If you have the means, you can pay for long-term care out of pocket—but let’s break down the 2023 median costs:
Assisted living: $64,200/year
Semi-private nursing home room: $104,000/year
Private nursing home room: $116,800/year
These are low-ball figures if you are aging in the Bay Area. And the tricky part? You don’t know how long you’ll need care. General recommendation is to budget for 3–5 years of care. For memory-care patients, it is more like 8–10. If you burn through savings, Medicaid might be your fallback.
Roth IRA
Unlike a traditional IRA, a Roth IRA has no required withdrawals, meaning you can keep the money growing until you need it for care or LTC insurance. Withdrawals are tax-free if you’re 59½+ and have had the Roth for 5+ years with no restrictions on how you use the money.
Using Home Equity – Reverse Mortgage or HELOC
If you own a home, you might be able to tap into home equity to help fund long-term care. With a reverse mortgage, you get monthly payments while staying in your home. The loan is repaid when you move out or pass away.
HELOC (Home Equity Line of Credit) isn’t just a way to finance a remodel; it’s a flexible way to borrow against home equity, but you must make payments, or you risk foreclosure.
Family & Community Support – Get Creative
LGBTQ+ older adults may have chosen families, and leaning on friends or community resources can be an important part of the plan. Some people cohabitate with friends or join LGBTQ-friendly retirement communities. Don’t overlook local aging services; many offer support tailored to LGBTQ+ elders.
Your long-term care plan should fit your life, your finances, and your values. There’s no one-size-fits-all approach, but thinking ahead now can save you (and your loved ones) a lot of stress down the road. Want to chat about your options? We’re here for you.
The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.
Brio Financial Group is a registered investment adviser. SEC Registration does not constitute an endorsement of Brio by the SEC nor does it indicate that Brio has attained a particular level of skill or ability Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.
Brandon Miller, CFP®, is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals. For more information: https://www.briofg.com/
Money Matters
Published on March 27, 2025
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