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How long-term care planning can help your loved ones

Key takeaways

  • Relying on family to provide care can place an emotional and financial burden on loved ones.
  • Planning care for a couple is even more complex than for an individual, due to uncertainties regarding the couples’ ability to provide care for one another.
  • Insurance can help maintain quality of life for both you and your family should you need long-term care yourself.
  • Your financial advisor can help you plan for your long-term care needs.

It may be difficult for healthy people in their 40s, 50s, and 60s to envision a time in the future when they need long-term help to care for themselves or their spouse. Contemplating losing the ability to live independently later in life is also likely to raise anxiety, both about what may happen to you and about the financial implications. With COVID now adding more uncertainty to what the future holds, many realize that being able to afford and receive care in the privacy of their own home–near family members–is a significant component of financial planning.

The more you know

It's important to know how to recognize early indicators that care might be needed. One sign to watch for is increased difficulty performing the "instrumental activities of daily living"—or IADLs. These activities are integral to independent living, including housekeeping, managing money, taking medications, preparing meals, shopping for the household, communicating via phone and email, caring for pets, and being able to respond to urgent situations. Difficulties with these activities typically precede the need for long-term care assistance, which is typically when one can no longer perform 2 "ADLs," or Activities of Daily Living (e.g., eating, bathing, dressing) without help.

Complexity for couples

Though at first it may seem easier, long-term care planning for couples is more complex than planning for an individual. That’s because there may be a temptation to assume, “If one of us needs help, the other will provide it.” However, both partners may need long-term care, and potentially even at the same time. This creates a risk that one spouse won’t be able to take care of the other when the need arises.

Another consideration is even if one spouse is still physically capable, they may find it difficult to provide the required level of care. Assistance with activities of daily living does not require clinical skills, but it is a major undertaking. The healthy spouse needs to make an emotional commitment and have the mental fortitude required to care for a disabled spouse.

To help put the variable aspects into perspective for planning purposes, consider that at any time each spouse will be in one of the following 4 health categories:

  • Healthy: Able to care for oneself and a spouse, if the spouse were to become disabled.
  • Frail: Able to care for oneself, but unable to care for a disabled spouse. For example, if the disabled spouse fell, the frail partner might not have the strength required to help the disabled person get back on their feet.
  • Disabled: Unable to perform at least 2 ADLs, or cognitively impaired, thus requiring long-term care assistance.
  • Deceased.

The need for professional care (i.e., someone other than a spouse), is prompted by how the couple moves among these 4 health states. As the following graphic shows, outside care for one or both spouses is needed whenever at least one spouse is disabled and the other spouse is not healthy:

Because it is difficult to predict the future health of each spouse, consider the following example which shows one couple and their experience as they transition through needing assistance and then professional care:

Beyond the specific path an individual couple may experience, another important source of uncertainty is the amount of time each spouse will spend in each stage. The effort needed to provide care depends not only on the path taken through the above matrix, but also the amount of time each spouse spends in the disabled stage. If one or both spouses are disabled for a number of years, the effort required to provide their care can be substantial.

As indicated, this example is just one of many possible life paths for a couple. In some cases, both spouses could go directly from healthy to deceased – perhaps as the result of an accident or acute disease (such as cancer or cardiovascular disease) that does not trigger a need for extended assistance. But as people become more aware of how to live a healthy lifestyle, they increase the likelihood that they will survive to an age when cognitive impairment or inability to perform ADLs become more likely.

Another part of understanding long-term care is to know the varieties and costs of long-term care as well as what long-term care insurance, regular insurance, and government insurance programs cover. The average person needs long-term care for 3 years, and 7 out of 10 people will need long-term care in their lifetime.1 Professional care can be a substitute for relying on your partner or family.

Visit What is long-term care?

While professional long-term care is expensive, using insurance as part of a plan for care can make a difference in everyone's quality of life as a person ages. The key to good decision-making is to weigh everyone’s needs against the costs and potential benefits of the options. According to data from Genworth Financial, the annual national median cost of hiring a home health aide—the most common type of care arrangement—was $61,776 in 2021.2

In addition to traditional long-term care insurance policies, newer "hybrid" policies are designed to provide a benefit even in the event that the policyholder does not file a claim. Be sure to ask about these options when you meet with your financial advisor.

Read Viewpoints on Long-term care: Options and considerations

Faced with these costs, some families might prefer to shoulder the burden of caring for a loved one themselves. Almost 7 out of 10 people surveyed by the Nationwide Retirement Institute said they would prefer to receive long-term care at home and rely on a spouse or family member for care–but would not expect a family member to provide long-term care if they were unable to compensate them.3 Indeed, doing so places a significant burden on family members who spend 56 hours per week as caregivers on average. In addition, Genworth's research shows that doing so places significant demands on their lives—and finances—and often requires sacrificing their own families and careers.

Read Viewpoints on How to take care of aging parents and yourself

A thoughtful long-term care plan is all about balance—weighing what you can afford, the kind of care you expect, and the risks you might face. It is not just a financial decision because using insurance may help meet the emotional and physical needs of caregivers such as family members and friends. Made carefully, it's a decision that may help provide you with some peace of mind for your retirement.

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1. 2021 U.S. Department of Health and Human Services ( 2. Genworth 2021 Cost of Care Survey 3. "Long-Term Care Consumer Survey," Nationwide/Harris Poll survey (2021).‐21387AO.pdf

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Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

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