Episode 100 of The Last Paycheck Podcast is a major milestone, and to mark the occasion, Rob and Archie Hoxton are diving into one of the most overlooked but financially critical topics in retirement planning: long-term care insurance.
Most people don’t like to think about it—but the truth is, many of us will need some form of long-term care as we age. In fact, the U.S. Department of Health and Human Services reports that 70% of Americans who reach age 65 will need care, and nearly half will require paid professional services. This episode breaks down what long-term care really costs, what it covers, and how to decide whether insurance is a smart option for your situation.
What Is Long-Term Care—and Who Needs It?
Long-term care refers to the services that support people who can no longer perform two or more Activities of Daily Living (ADLs), like bathing, eating, or dressing. It also includes care for cognitive decline caused by dementia or Alzheimer’s. This care can happen at home, in assisted living facilities, or in nursing homes—and it isn’t covered by Medicare beyond short-term rehab.
The costs? Eye-opening. Professional care can run into $10,000–$15,000 per month, and memory care in particular may be required for years. That’s a major hit to most retirement portfolios.
The Three Main Options for Managing Long-Term Care Risk
Rob and Archie outline three broad paths:
- Do Nothing – Hope you don’t need care. (Spoiler: This is not a plan.)
- Self-Insure – Pay out-of-pocket if the need arises, which only works if you have significant liquid assets.
- Buy Insurance – Transfer the risk to a carrier in exchange for premiums.
Insurance isn’t cheap, but neither is doing nothing. If you don’t have children, a spouse, or someone willing and able to care for you, the lack of a support system could make this insurance essential. Even if you do, relying on family comes with emotional and logistical challenges that should be considered carefully.
When Long-Term Care Insurance Makes Sense
Rob and Archie recommend looking seriously at long-term care insurance if:
- You’re in your 50s and financially stable (the “sweet spot” for underwriting and affordability)
- You don’t have children or a spouse to act as a caregiver
- You want to protect your assets for a surviving spouse or your heirs
- You have a family history of cognitive decline or chronic illness
- You’ve witnessed a loved one’s care experience and want to avoid similar stress
In short, long-term care insurance gives you more control over your future and can prevent your family from having to make difficult decisions under financial pressure.
When It Might Not Be Right
Insurance isn’t a fit for everyone. It might not make sense if:
- You have limited income and can’t afford premiums
- You’re wealthy enough to self-insure without compromising your legacy
- You’re already in poor health and likely won’t qualify or will face very high premiums
In some cases, a hybrid policy (life insurance with a long-term care rider) or partial insurance (covering part of the expected cost) may be the middle ground.
Practical Next Steps
The episode encourages listeners to:
- Research care costs in their area using resources like Genworth.com
- Talk to a fiduciary advisor about how long-term care fits into their broader plan
- Request insurance quotes to compare costs and benefits
- Consider the emotional and financial impact on spouses and children
Long-term care planning isn’t just about risk—it’s about preserving dignity, control, and peace of mind.