How to Fund Long-Term Care Without Derailing Your Retirement Plan

Written By Knapsack

Planning for a long and fulfilling retirement involves more than just growing your savings. It means protecting them, too. One of the biggest threats to your retirement security is not market volatility or inflation. It is something far more personal: the rising cost of long-term care.

At One Advisory Partners, we believe that preparing for long-term care is not about fear. It is about foresight. With the right strategies in place, you can safeguard your lifestyle, preserve your legacy, and ensure surprise costs do not burden your loved ones.

Why Long-Term Care Planning Matters

According to recent studies, nearly 70 percent of people turning 65 today will need some form of long-term care during their lifetime. That care—whether it is home health assistance, assisted living, or nursing care—can be expensive. Costs vary widely by location, but it is not unusual for extended care to cost between $5,000 and $10,000 per month.

Medicare does not typically cover these expenses. Without proper planning, long-term care can quickly erode your retirement nest egg, derail your financial goals, and create stress for your family.

Common Mistakes to Avoid

Let’s start with what not to do:

  • Assuming Medicare will cover it – Medicare only covers short-term rehab, not long-term custodial care.

  • Relying solely on family – While many families want to help, the emotional, physical, and financial toll of caregiving can be immense.

  • Waiting too long to plan – The earlier you prepare, the more options you will have and the more affordable they may be.

Smart Strategies to Fund Long-Term Care

At One Advisory Partners, we take a proactive, personalized approach to helping clients prepare. Here are some of the most effective tools and tactics we recommend:

1. Long-Term Care Insurance

Traditional LTC insurance can be a good fit if purchased early enough. It provides coverage for qualified care services and may reduce the need to tap into retirement savings. However, premiums can be expensive and are not guaranteed to remain level.

2. Hybrid Life and LTC Policies

Also known as asset-based or linked benefit policies, these combine life insurance with long-term care coverage. If you do not end up needing care, your beneficiaries still receive a death benefit. These policies are often funded with a lump sum or short-term payments.

3. Health Savings Accounts

If you are still working and eligible, an HSA is a tax-advantaged way to prepare for future healthcare costs. You can use HSA funds tax-free for qualified long-term care services and insurance premiums (within IRS limits).

4. Medicaid Planning

For some, structuring assets to qualify for Medicaid may be appropriate. But it must be done years in advance and with expert guidance. This strategy often involves irrevocable trusts, gifting strategies, or annuities.

5. Self-Funding with Strategic Withdrawals

Some retirees choose to self-fund care using a portion of their portfolio. This requires careful modeling to ensure long-term sustainability. We help clients set aside designated care reserves without jeopardizing their broader goals.

Integrated Planning Makes the Difference

No matter which path you take, what matters most is coordination. Long-term care should not be planned in a silo. It needs to fit within your broader retirement strategy—including income planning, tax management, estate considerations, and investment risk tolerance.

At One Advisory Partners, we help clients:

  • Analyze future care costs based on location, health status, and family dynamics

  • Evaluate the pros and cons of different funding strategies

  • Coordinate with attorneys and insurance professionals

  • Stress test retirement plans against long-term care scenarios

Real Peace of Mind Comes From Being Prepared

Long-term care is one of the few financial risks we can see coming, but often avoid planning for. But doing so does not have to be overwhelming. With the right partner and a clear strategy, you can protect your future without sacrificing your lifestyle or legacy.

Our fiduciary financial planning model means we work exclusively for you. We do not sell insurance products. We help you choose the best options with complete objectivity. It is just one more way we bring clarity and confidence to your retirement journey.

Secure Your Retirement From Every Angle

Let’s talk about how long-term care fits into your financial picture. Contact One Advisory Partners today for a personalized consultation and start building a plan that protects your future without compromise.

Knapsack

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