The Overlooked Threat to Your Financial Plan

Why Every Professional Needs a Long-Term Care Strategy

By Eric S. Miller

Most people spend decades building wealth, paying down debt, and saving for retirement—only to watch it unravel in the final years of life. It’s not from a bad investment or market crash. It’s from something far more predictable: the cost of long-term care.

In this article, I’m going to break down what long-term care actually is, why most households fail to prepare for it, and how to protect your hard-earned wealth without relying on government programs or luck. This is one of the least-discussed but most financially devastating blind spots I see among professionals in their 40s, 50s, and 60s—and it’s time to fix it.

What Exactly Is Long-Term Care?

When most people hear “long-term care,” they picture nursing homes or hospice facilities. That’s part of it, but long-term care covers a much broader range of services—everything from home health aides who visit several times a week to full-time assisted-living or memory-care centers.

The technical definition: long-term care is required when someone cannot independently perform two of the six activities of daily living (ADLs)—basic functions such as eating, dressing, bathing, using the bathroom, moving from a chair, or maintaining continence. Once you need help with two of those, you officially qualify for long-term care.

It’s not necessarily “end-of-life” care. Many people need assistance for years before they pass. But it is expensive, and most of the time, those costs fall entirely on the household—not health insurance, not Medicare.

The Hidden Financial Risk

At Econologics Financial Advisors, we teach that every household financial plan must be built around protection, production, and prosperity—and long-term care falls squarely under protection. You insure your practice, your car, and your home, but many ignore the single largest unfunded financial risk in retirement: the potential need for extended care.

Here’s the truth:
Health insurance and Medicare will not cover long-term care. Once you require ongoing help with daily activities, you pay 100 percent of those costs out of pocket until you have almost nothing left.

Only after you’ve spent down nearly all your assets—literally down to about $2,000 of investable savings—does Medicaid step in. Even then, the government will recover what it paid by clawing funds back from your estate after you die. That means the house you planned to leave to your kids may end up sold to pay for your nursing home stay.

The Real Costs of Long-Term Care

Let’s look at some hard numbers. According to the Cost of Care Survey, the average price tag in Florida (2023) was:

• Nursing home (semi-private room): $9,885 per month
• Home health aide: $5,700 per month

Project those costs out 20 years with modest inflation, and you’re easily looking at $18,000 per month for a nursing facility and $10,000 per month for home care. Multiply that by a typical stay of 3.2 years, and you’re talking about $400,000 to $600,000—per person.

Now picture a married couple where one spouse requires care and the other still needs money to live. That’s a potential $20,000–$25,000 leaving your accounts every month. Unless you have several million dollars saved, that pace will drain your assets quickly.

Who Actually Needs Long-Term Care?

Here’s the statistic that shocks most people:

Seven out of ten adults age 65 and older will need some form of long-term care.

That’s not a fringe risk. That’s the majority of us.
And it’s not getting better—longevity is up, chronic illness is up, and the cost of care continues to outpace inflation.

Medicaid currently covers about 42 percent of the nation’s $475 billion annual long-term care bill, but only for those who have already spent through their life savings. Everyone else pays privately.

The average stay in a long-term care facility is just over three years, but one in five residents remains for five years or longer. If you’re structuring a policy, five years of coverage should be the baseline—not the ceiling.

Why Women Are at Greater Risk

Here’s another important reality: long-term care is largely a women’s issue.

Statistically, women live longer than men. They make up two-thirds of all long-term care residents, and they stay an average of 3.7 years compared to 2.2 years for men.

Think about that dynamic within a household. The husband may pass suddenly—heart attack, accident, or illness—leaving the wife to face years of care alone. Without proper planning, that’s when the estate begins to unravel. Protecting her quality of life is one of the most overlooked yet loving financial decisions a couple can make.

A Real-World Story: When Planning Comes Too Late

Let me share a quick story that mirrors what we see often.

A client’s mother entered a memory-care facility at age 87. She had a good pension, Social Security, and roughly a quarter-million dollars saved. Within five years, every dollar was gone. The pension and Social Security went straight to the facility, and when she passed, the estate had nothing left for the family.

It wasn’t because of poor investing or overspending—it was the cost of care. The family later told me, “If we had just known about this ten years earlier, we would have set something up.”

That’s the point. Long-term care planning isn’t about pessimism—it’s about preserving control. You worked too hard to build wealth just to let the system dictate how it gets spent.

The Evolution of Long-Term Care Policies

The long-term care insurance industry has changed dramatically over the last 30 years.

1. Traditional Long-Term Care Insurance

In the 1980s and ’90s, policies worked like auto insurance: you paid an annual premium, and if you ever needed care, the insurer paid benefits. Simple—but with one major problem.

Insurance companies underestimated how many people would actually use it and how long they would need benefits. As costs rose, premiums skyrocketed—often doubling or tripling after retirement. Many policyholders couldn’t afford the increases, so they dropped coverage right before they were likely to need it. And because it had no cash value, all those years of payments vanished.

Traditional policies still exist, but they’ve largely fallen out of favor for that reason.

2. The Rise of Hybrid or Asset-Based Long-Term Care

Today, a smarter solution has emerged: hybrid or asset-based long-term care policies.

Instead of paying indefinite premiums, you commit a fixed amount—usually starting around $50,000—funded all at once or over several years. That contribution buys a pool of long-term care benefits that grow each year, typically with a 3 percent annual cost-of-living adjustment.

For example, a 42-year-old who contributes $50,000 could secure an initial $4,000 monthly benefit, which grows to more than $11,000 per month by age 78. The benefit lasts six years, providing about $900,000 of tax-free coverage when needed.For example, a 42-year-old who contributes $50,000 could secure an initial $4,000 monthly benefit, which grows to more than $11,000 per month by age 78. The benefit lasts six years, providing about $900,000 of tax-free coverage when needed.

If you wait until your late 50s or 60s, the numbers change dramatically. The same contribution might only generate $400,000 of total benefits. The earlier you act, the more leverage you get.

Why Asset-Based Coverage Makes Sense

Fixed Premiums—No Surprises

Your cost is locked in. There are no future rate increases, unlike traditional policies that balloon when you can least afford them.

Tax-Free Benefits

All long-term care payouts are income-tax-free, making them one of the most efficient uses of after-tax dollars.

A Guaranteed Return (If You Never Use It)

If you never need care, your family receives a death benefit, usually equal to or slightly above what you paid in. It’s not about making a profit—it’s about ensuring the money never disappears.

Complete Control

If your circumstances change, most hybrid policies offer surrender value. You can’t “lose everything” unless you voluntarily cancel the contract early.

Protects Both Spouses

Many policies can be structured to cover both spouses under one plan, making it cost-effective for married professionals.

When Should You Get Long-Term Care Coverage?

The best time to secure long-term care protection is while you’re healthy and earning strongly—typically in your early-to-mid 40s.

Why so early?
Because underwriting is strict. Insurers review your full medical history and cognitive function. Even a pending doctor visit can delay or derail approval. Common reasons for denial include high cholesterol, diabetes, or unresolved medical issues. Waiting until your 60s significantly increases both the price and the risk of being declined altogether.

Remember: you can’t buy long-term care insurance when you need it. You must qualify for it first.

The Math Behind the Decision

Let’s do a simple comparison.

The younger you are, the more benefit your dollars buy—and the longer your coverage grows with inflation. That’s why professionals in their 40s and early 50s are in the prime window for planning.

Integrating Long-Term Care Into Your Financial System

At Econologics, we view long-term care planning as part of an integrated financial system—not a one-off product. The goal isn’t just to buy insurance; it’s to align protection with your broader financial strategy.

Here’s how it fits:

1. Protect Your Household Income Stream.
   If one spouse needs care, the other must maintain stability. Asset-based LTC ensures your household doesn’t collapse financially under dual expenses.
2. Preserve the Practice as an Investment.
   Without proper planning, you may be forced to liquidate business assets or take on debt to cover care. Long-term care coverage protects the equity you’ve built.
3. Safeguard Your Legacy.
   You spent decades building wealth for your family. Without protection, a few years of care could erase that in months.
4. Simplify Estate and Tax Planning.
   Having a policy in place reduces estate complications and provides predictable funding sources—vital for fiduciary and family planning.

Common Misconceptions About Long-Term Care

Let’s clear up a few myths we hear often:

“I’ll self-insure.”
Maybe—but do the math. Could you comfortably write $18,000 checks every month for several years while still supporting your spouse, taxes, and retirement? Most can’t without liquidating investments or practice equity.

“Medicare will cover it.”
It won’t. Medicare covers short-term rehab or skilled nursing for up to 100 days—not ongoing custodial care.

“I’m healthy; I won’t need it.”
Health is unpredictable. Long-term care isn’t just about illness—it’s about aging. Even the fittest individuals eventually slow down.

“It’s too expensive.”
Relative to the risk, it’s one of the best-valued forms of protection available. Paying $5,000 a year for 10 years to protect $900,000 of tax-free benefits is a trade any business owner would make.

How Long-Term Care Policies Pay Out

Once you’re certified as unable to perform two ADLs, your benefits activate. Most asset-based policies provide cash benefits directly to you—no reimbursement forms or receipts required. Funds are deposited monthly, giving you flexibility to choose the care you prefer, whether in-home, assisted-living, or facility-based.

If you pass away after using only part of your benefits, your family still receives the remaining balance of the death benefit. Either way, every dollar you contributed returns to your household in one form or another.

The Emotional and Financial Payoff

Long-term care planning isn’t just a financial decision—it’s an act of clarity and compassion.

It means your spouse won’t have to scramble to sell assets under stress. It means your kids won’t shoulder impossible caregiving or financial choices. It means the wealth you built—the practice, the home, the savings—will serve your family, not a facility.

Most importantly, it gives you peace of mind. You know you’ve handled one of the last big unknowns in retirement planning. That confidence is priceless.

Key Takeaways

1. 70% of adults 65 and older will need long-term care.
2. Average annual costs exceed $100,000, rising 6% per year.
3. Medicare and health insurance don’t cover it.
4. Asset-based long-term care provides tax-free protection and a death benefit if unused.
5. The optimal window to secure coverage is between ages 40 and 55.

The Bottom Line

Financial success isn’t just about how much you earn or invest—it’s about how well you protect what you’ve built. Ignoring long-term care is like building a mansion without a roof; one storm can destroy everything inside.

If you’re in your 40s or 50s and haven’t addressed this yet, now is the time. Sit down with a fiduciary advisor who understands how to integrate protection, income, and asset growth into a single, coordinated system.

At Econologics Financial Advisors, we call that integration: connecting your business and household finances so every decision strengthens both. Long-term care planning is simply one essential piece of that system.

Because financial peace of mind isn’t achieved by chance—it’s achieved by design.

Ready to find out if your household is truly protected? Take the Financial Prosperity Index Assessment and schedule your complimentary strategy session with an Econologics Specialist to review your results and explore options for long-term care planning.

Take the Financial Prosperity Index Assessment →

Listen to The Financial Beast podcast episode associated with this article: 
Strategies to Shield Your Savings from Long-Term Care Expenses

Explore more Financial Beast Podcast episodes

Additional Resources:
Econologics Roadmap Financial Plan
Genworth Cost of Care Survey
U.S. Department of Health and Human Services – LongTermCare.gov