The cheapest way to pay for long term care is to not get insurance, cross your fingers you never need it, and pray.
And this strategy works great… some of the time.
But for those that aren’t gamblers, here are some other strategies to consider.
What am I Paying For?
Long term care is the sort of care you get when you can’t do things for yourself.
For example, a nursing home, assisted living, or in-home help.
And this sort of care gets expensive! That is why it is something that needs to be planned for.
Many of you may already be experiencing this sort of situation with your parents.
Long Term Care Insurance
One potential solution to this problem is to get long term care insurance.
The big advantage of this is that you know a large portion of the cost is going to be paid.
The downside is that it can get very expensive and not everyone is approved. And if you never end up needing long term care then you can’t get your money back.
This option often makes sense for those that are in pretty good health and are okay with paying the premiums (even if they go up overtime) because of the security that the policy brings.
Other Options
But not everyone needs insurance to be prepared.
Many people have enough assets to cover the cost of long term care if it came up.
Some people earmark a piece of their TSP to be their long term care fund. They let that money grow and won’t touch it unless they need long term care. And if they don’t end up needing it then that money can go to their spouse or kids.
Others earmark their home equity as their long term care fund. They figure that if they are in a nursing home they won’t need as big of a house or maybe won’t need a house at all. So they’ll be able to downsize or sell their house and use the proceeds to fund their expenses.
The Plan
There are many different ways of being prepared for long term care and you’ll have to find one that works for your situation.
The most important thing is that you have a real plan/strategy for what you are going to do.
Because crossing your fingers only works sometimes.
