Would it surprise you to hear that the cost of healthcare is the #1 financial concern in retirement, ahead of running out of money and inflation?  It shouldn't be given the overwhelming avoidance of the topic throughout the advisory community.  That concern was validated by a March 2024 survey by Retirable and eHealth, and it's easy to see why when it's paired with Fidelity's 2024 Retiree Health Care Cost Estimate.  According to Fidelity, a 65-year-old retiring this year can expect to spend an average of $165,000 - 5% increase from 2023 - on health care and medical expenses throughout retirement, including MedSupp premiums, co-pays, deductible, and other related out-of-pocket costs.  There's a significant caveat, however, as that projection excludes potential Long-Term Care (LTC) costs, which could easily double or triple that figure depending on how and when care is needed.

Whether it's Healthcare In Retirement or LTC Planning, most Americans remain unprepared, as most in the advisory community are still unwilling or unable to prioritize either topic.  That avoidance may not be sustainable much longer.  By 2030, more than 75 million Americans will be near or in retirement as the Silver Tsunami crests.  The pressure on families, advisors, and the broader financial system will be impossible to ignore.  The surveys already reflect consumer attitudes, and they're looking for advisors and institutions willing to engage on these topics now because the financial cost of waiting keeps rising.

The harsh reality is found in a hypothetical client we'll call Sally Saver, who's a widow, age 55, with three kids and a deep concern about how she'll pay for healthcare and LTC for aging parents when the time comes.  She keeps asking her advisor about LTC Planning, but instead of addressing her concerns, he’s told that her parents can simply 'self-fund' future care, and that she’s too young for formal LTC Planning.  What's being ignored, though, is the critical distinction and reality that paying for care and planning for care are NOT the same discussion or exercise, and the cost of waiting to act can be significant.

The Cost of Delaying Self-Funding

Self-funding is the default for those without a formal plan, and it might seem like a viable strategy for clients like Sally, who has accumulated assets and a sizable income.  But delaying the decision to formally plan for LTC, even with the intent to self-fund, can carry substantial costs.  The longer Sally waits, the greater the risk that her assets won't be enough to cover future care needs.  Market volatility, inflation, and unexpected health issues can erode her wealth, making self-funding a far less secure strategy than it may initially appear.

What's missing is structure.  Tools like the HALO™ Assessment quantify risk, project care needs, estimate realistic costs, and stress-test assumptions across a range of care scenarios.  Without that planning framework, self-funding becomes a vague intention—not a defined strategy.  For Sally, delaying action while relying on self-funding exposes her to unnecessary financial risk.  And the cost isn't just in dollars—it's in the potential inability to age in place, the loss of control over her future, and the very real possibility of becoming a burden on her family... just as she's staring that same reality in the face with her own aging parents.

The Availability of Friends and Family for Caregiving

One often overlooked aspect of LTC Planning is the assumption that friends and family will always be available to provide care.  But that assumption rarely holds up over time.  Sally is already facing the possibility of becoming a caregiver—or at minimum, a care manager—for her aging parents.  It's a role she never asked for and never planned to take on.  And as her children grow older and move on, she knows this cycle could repeat.  Even well-intentioned family members develop personal health issues or relocate for personal or professional reasons, making it more challenging — or impossible — to provide necessary care.  

Relying on an informal caregiving network without a formal plan leads to gaps in care, resentment throughout the family, increased stress for those involved, and eventually a scramble to find outside help — usually at a higher cost and with fewer choices.  This "unintended consequence" underscores the need to plan for professional care options as part of a comprehensive LTC strategy.   Without that preparation, Sally could find herself without the family support she was counting on—facing unanticipated expenses, limited choices, and potentially lower quality of care when it matters most.

The Cost of Relying on Medicaid 

Another critical factor in LTC Planning is the assumption that Medicaid will be there as a fallback to cover care costs.  Medicaid is designed to be a safety net for those who qualify—but relying on it is a gamble, because eligibility rules can and do change.  If Sally delays her planning (or her parents') and later discovers that Medicaid requirements have tightened, they may no longer qualify for the benefits they were counting on.  Formal planning removes the guesswork and eliminates the need for last-minute pivots.

Even for those who do qualify, relying on Medicaid means giving up control.  Facilities that accept Medicaid rarely align with expectations when it comes to quality of care, provider choice, or even geographic access.  That's the trade-off for government benefits.  Proper planning gives Sally and her loved ones flexibility, control, and options instead of hoping the rules don't change or settling for care on someone else's terms if they do.

The Cost of Waiting Is Real & Substantial

Recognizing the inherent risks, prudent planners like Sally recognize the value in exploring options and working with a specialist to discuss LTC Planning and insurance-based strategies.  Sally's HALO Report provided a planning target of four years of care, with an initial, inflation-protected LTC benefit of $6,500 per month. She's decided that if she never needs care, she wants all of her premium dollars to come back to her family as a life insurance death benefit (TAX-FREE), and she wants to have the policy paid up in ten years rather than pay annual premiums for the rest of her life for a stand-alone LTC insurance policy.

Over the years, the initial LTC benefit will need to be larger (more expensive), so the question is when to proceed, not if, and her LTC specialist provides a simple data-driven analysis to answer when.....TODAY!