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Financial Considerations for Housing and Long-Term Care

Updated: Nov 14, 2018


How Much Will It Cost?

It’s important to note, most people have not had much experience with the cost of Long Term Care. Surveys asking how much it costs come back with an average answer of $417 per month or $5,000 per year.

The fact is the costs vary wildly depending upon the state and the type of care.

In Massachusetts, the annual averages are as follows:

Adult DayCare: $15,000

Home Services: up to $60,000

Assisted Living Facility: $67,000

Nursing Home: $144,000


There are of course many different types of care facilities. Some charge a monthly charge of $2,000-$5,000 per month plus food, then require a mostly refundable deposit from $200,000 to $600,000 that could be used for advanced care as well.

How will you pay for care?

Since almost ½ of us need Long term care at one point or another, the cost is a real risk to your financial plan.

Type of Funding:

Self-Insurance: Allow your funds and income such as Social Security to cover your expenses. There is a state Medicaid system called Mass Health that will help you pay for costs in some facilities once you are out of money. The real danger here (besides the obvious, running out of money) is the effect it could have on your spouse financially as they do everything they can to care for you.

Traditional Long-Term Care Insurance: This covers you for the amount you purchase when you can’t perform certain functions without help.The downside- it gets more expensive if you wait to purchase it. Also, there is a “use it or lose it” aspect to it.

Hybrid Long Term Care Riders: These are traditional insurance products such as Life Insurance or Annuities that provide regular benefits such as protecting your family or growing your assets. Should you need long-term care, they can convert into coverage often many times what you put into it. You also may benefit from being able to get money back if you don’t use it.

Many considerations include inflation protection and years of coverage.

Family Members Covering Service or Cost: If this is something you feel is realistic in your family, you should have the discussion of who and how and what the impact to the others will be. Throwing it out there to have your kids handle is usually a recipe for disaster as each of their families and circumstance probably differ substantially.

What do you really want to do?

Who knows, right? Well, for our clients, it usually has a lot to do with preparing your future self to have options when the time comes. That involves preparing yourself financially for whatever path you take. There is no doubt that the risk is there. Some choose to retain that risk and others transfer it.

More to Know

This is a brief overview of the considerations. If you are curious about your options when it comes to housing, join our next Life on Purpose Education Session- Planning for Housing. Click to learn more. Or- give us a call/shoot us a message. We are here to help!

For more information visit:

https://www.genworth.com/aging-and-you/finances/cost-of-care.html