Patten Financial Group | Valparaiso, Indiana | Serving Northwest Indiana and Greater Chicagoland
Quick Answer
Long-term care is one of the largest and least planned-for costs in retirement. Someone turning 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years, according to the U.S. Administration for Community Living. Most of that care isn’t covered by Medicare. That makes long-term care a retirement income question as much as a health question: if care is needed, where will the money come from, and what happens to the rest of the plan? November is Long-Term Care Awareness Month, and with families gathering for the holidays, it’s a natural time for parents and adult children to start that conversation.
Why This Conversation Belongs at the Kitchen Table
Most families don’t talk about long-term care until a fall, a diagnosis, or a hospital stay forces the conversation. By then, decisions get made quickly, under stress, and often with fewer options.
November is recognized as Long-Term Care Awareness Month, and it lands right before Thanksgiving. Two things are true at once this time of year: families are together, and long-term care is in the news. That makes it one of the best windows all year to have a calm, unhurried conversation about what everyone would want if care is ever needed.
This article is written for both sides of that table. If you’re nearing or in retirement, it’s about planning for your own care. If you’re an adult child, it’s about understanding your parents’ plan before you’re the one making phone calls.
What Long-Term Care Is, and What Medicare Won’t Cover
Long-term care is mostly help with everyday activities like bathing, dressing, eating, and moving around, rather than medical treatment. It can happen at home, in an adult day program, in assisted living, or in a nursing home.
Here’s the part that surprises many families: Medicare’s own coverage page says plainly that Medicare doesn’t pay for long-term care, and you pay all costs for non-covered services, including most long-term care. Medicare can cover limited skilled nursing or rehab after a qualifying hospital stay, but Medicare doesn’t cover custodial care if it’s the only care you need. Medicare supplement (Medigap) policies don’t fill that gap either. For more on how Medicare fits into the bigger picture, see our article on using Medicare Open Enrollment as a retirement planning checkpoint.
The Numbers Families Should Know
How likely care is. Most people will need some help eventually, but how much varies widely. According to the ACL, one-third of today’s 65-year-olds may never need long-term care support, but 20 percent will need it for longer than 5 years. Women need care longer (3.7 years) than men (2.2 years).
Who provides it. Families carry much of the load. 80% of care at home is provided by an unpaid caregiver, such as a family member, partner, friend or neighbor. That’s a cost too, just not one that shows up on a bill.
What care costs. According to CareScout’s 2025 Cost of Care Survey, national median costs look like this:
What Long-Term Care Costs: 2025 National Medians
| Type of Care | Annual Cost |
|---|---|
| In-home non-medical caregiver44 hours per week | $80,080 |
| Adult day health care5 days per week | $24,700 |
| Assisted livingPrivate, one bedroom | $74,400 |
| Nursing homeSemi-private room | $114,975 |
| Nursing homePrivate room | $129,575 |
Source: CareScout 2025 Cost of Care Survey. Actual costs vary by location, provider, and level of care needed.
The national median hourly rate for non-medical caregiver services increased 3% year-over-year to $35 per hour, and the national median daily rate for a private nursing home room rose 1% to $355 per day. Costs in Northwest Indiana and the Chicago area can differ from these national figures. CareScout’s online tool lets families look up local medians.
Why Long-Term Care Is Really a Retirement Income Question
A retirement income plan is built around expected spending: housing, travel, healthcare premiums, and the things that make retirement enjoyable. A long-term care need can add tens of thousands of dollars a year in new spending, often with little warning. That creates ripple effects most families don’t think about until they’re in the middle of it:
Withdrawals can spike. Paying for care often means pulling much more from savings than the plan assumed. If that happens during a market downturn, it can mean selling investments at the wrong time.
Taxes can jump. Large withdrawals from traditional IRAs or 401(k)s are generally taxable income. A big withdrawal in a single year can push a household into a higher tax bracket and may affect Medicare premiums.
The healthy spouse still needs income. When one spouse needs care, the household still has to fund the other spouse’s living expenses, possibly for many years. A plan that works for two people living at home may not work when one is paying for care.
Legacy goals can shift. For families who hope to leave something to children, grandchildren, or charity, an extended care need can significantly reduce what’s left.
That’s why our firm treats long-term care as part of the income plan, not a separate product decision. The key question isn’t “Should I buy a policy?” It’s “If care is needed, how does the whole plan hold up?”
How Families Typically Plan to Pay for Care
There’s no single right answer, and many families use a combination of these approaches. The goal is to decide in advance, so the decision isn’t made in a crisis.
Self-funding from savings. Some households have enough assets to cover care costs out of pocket. This works best when it’s planned, for example by earmarking specific assets as a care reserve and testing the income plan against a multi-year care scenario.
Traditional long-term care insurance. These policies are designed specifically to help pay for care. Premiums, benefits, and underwriting vary, and buying earlier generally means more options. Indiana also offers a state Long-Term Care Insurance Program, a “Partnership” program, which is worth asking about.
Hybrid life insurance or annuities with long-term care benefits. Some life insurance policies and annuities include benefits that can be used for qualifying long-term care expenses. If care is never needed, they may still provide a death benefit or other value. Features, costs, and guarantees vary by contract.
Medicaid. Medicaid is the largest payer of long-term care in the U.S., but eligibility depends on strict income and asset limits. The rules include a look-back period on asset transfers and vary by state. Families considering this path should work with an elder law attorney well in advance.
Family caregiving. Many families plan for a spouse or adult child to provide some care. It’s worth talking openly about what’s realistic, including the impact on the caregiver’s own job, health, and finances.
The Family Conversation: Questions to Ask This Holiday Season
For parents and pre-retirees to think through:
If I needed help at home, who would I want providing it, and where would I want to receive care?
How would we pay for care, and which accounts or resources would we draw on first?
If one of us needs care, does the plan still work for the other spouse?
Are my power of attorney, healthcare directive, and beneficiary designations current?
For adult children to ask, gently:
Do you have a plan for long-term care, and is it written down anywhere?
Who are your financial advisor, attorney, and insurance agent, and how would we reach them?
Where are your important documents kept?
What would you want us to know or do if you ever needed help?
The goal of this first conversation isn’t to solve everything. It’s to get the topic on the table, learn where things stand, and agree on next steps. If documents are part of that conversation, our beneficiary designation review checklist is a good place to start.
Frequently Asked Questions
Does Medicare pay for long-term care?
Generally, no. Medicare does not pay for custodial care, which is help with daily activities like bathing, dressing, and eating, when that’s the only care you need. It may cover limited skilled nursing or rehabilitation for a short period after a qualifying hospital stay.
What are the chances I’ll need long-term care?
According to the U.S. Administration for Community Living, someone turning 65 today has almost a 70% chance of needing some type of long-term care. About one-third may never need it, while 20% may need it for more than five years.
How much does long-term care cost?
According to CareScout’s 2025 Cost of Care Survey, national median annual costs are about $80,080 for in-home care, $74,400 for assisted living, and $129,575 for a private nursing home room. Costs vary by location and level of care.
How does long-term care affect my retirement income plan?
A long-term care need can significantly increase withdrawals from savings, which may raise taxes, force investment sales at inopportune times, and strain the income needed for a healthy spouse. Planning for care in advance helps the overall retirement plan hold up.
When should families start planning for long-term care?
Ideally, well before care is needed, often in your 50s or early 60s. Planning earlier generally provides more options and allows decisions to be made calmly rather than in a crisis.
The Bottom Line
Long-term care is one of the few retirement risks that’s both highly likely and largely uncovered by Medicare. The families who handle it best aren’t necessarily the ones with the most money. They’re the ones who talked about it early, wrote down a plan, and made sure their retirement income strategy could absorb the cost. This November, a single conversation around the holiday table can be the most valuable planning step of the year.
Let’s Build Care Into Your Plan, Not Around It
If you’d like help seeing how a long-term care need would affect your retirement income, or you want to start the conversation as a family, we’d welcome the chance to help. Patten Financial Group works with pre-retirees, retirees, and families across Valparaiso, Northwest Indiana, and Greater Chicagoland to build plans that account for the costs most people overlook.
Schedule a complimentary consultation or call us at (219) 312-4128.
Want to dig deeper first? Download our complimentary eBook, A Guide to Retirement Income Planning: Strategies for Sustainable Income by Aaron Patten. It’s a seven-chapter guide to coordinating your income sources and adjusting your strategy as life and markets change.
Patten Financial Group’s retirement income planning press release was featured on NBC, CBS, and ABC affiliate news sites and more than 200 news outlets.
Sources
U.S. Administration for Community Living, “How Much Care Will You Need?” https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
Medicare.gov, “Long-term care.” https://www.medicare.gov/coverage/long-term-care.Html
Medicare.gov, “Nursing home care.” https://www.medicare.gov/coverage/nursing-home-care.html
CareScout, “CareScout Releases 2025 Cost of Care Survey Results.” https://www.businesswire.com/news/home/20260302283881/en/CareScout-Releases-2025-Cost-of-Care-Survey-Results
CareScout, “Cost of Care Survey.” https://www.carescout.com/cost-of-care.html
Florida Today via AOL, “Most people will need long-term care in their lifetime. Here’s what to know” (citing ACL data). https://www.aol.com/news/one-senior-place-youll-likely-090114892.html
This article is for educational purposes only and should not be considered investment, tax, legal, or insurance advice. Long-term care costs are national medians and vary by location and level of care. Insurance product features, benefits, and costs vary by contract and state, and any guarantees are subject to the claims-paying ability of the issuing insurance company. Please consult your tax, legal, or insurance professional regarding your specific situation.
Investment advisory services offered through Redhawk Wealth Advisors, Inc., an SEC-Registered Investment Advisor. SEC registration does not imply any level of skill or understanding. Redhawk Wealth Advisors and Patten Financial Group are unaffiliated and separate legal entities.
