Long-term care planning still isn’t a glamorous part of retirement, but in 2026, it’s not something we can ignore. Care costs continue to rise, and many retirees are surprised by how little traditional health insurance and Medicare actually cover.
One of the most common misconceptions is that Medicare will handle long-term care costs. In reality, Medicare only covers short-term skilled care under specific conditions. Recovering from an illness or injury that lands you in a hospital or rehab facility is an example of where Medicare kicks in because the condition requires skilled care, as outlined by Medicare Part A.
Extended care and personal care, where the need is related to completing everyday tasks, is our focus today. We’re talking about an inevitable point of aging for many where independence diminishes, and you need a hand with tasks like getting dressed, transportation, picking up prescriptions and groceries, cooking, and household chores. This type of care is largely a personal financial responsibility.
There are 3 common options for covering the cost:
- Personal savings
- Personal care from within your family
- Long-term care insurance
The right path depends on your health, assets, and how much flexibility you want in choosing care. Below are the key things retirees and pre-retirees should understand in 2026.
Saving for Long-Term Care
According to a recent Cost of Care Survey conducted by The Federal Long Term Care Insurance Program, costs continue to trend upward. The following represent current estimated average costs associated with long-term care:
- Private nursing home room: $110,000+ per year
- Assisted living: $66,000+ per year
- Home Care: $51,000+ per year
Even moderate care needs can quickly erode retirement savings if there’s no plan in place.
Long-Term Care: Keeping it in the Family
Relying on family for care later in life requires thoughtful conversations well before care is needed. It’s important to understand who may be willing and able to help, what that care might realistically look like, and how it could impact everyone involved. These conversations aren’t always easy, but they help set clear expectations and reduce stress down the road.
It’s important to avoid assumptions, even if your family has operated in a specific manner for generations. Believing children will naturally step into a caregiving role isn’t always realistic. Adult children may live far away, work outside the home, or simply lack the capacity for reasons not always immediately seen.
Even when family members are willing, caregiving can place a significant emotional, physical, and financial strain on them over time. Understanding these realities early allows families to explore supplemental options. Ultimately, the goal of these conversations is to preserve family relationships.
Long-Term Care Insurance: What It Actually Covers
Long-term care insurance is designed to cover services that traditional health insurance and Medicare generally do not. While insurance costs can be high, for some, the price is worth the peace of mind and added level of assurance that their family will not be burdened later in life.
Coverage is typically triggered when you’re unable to perform two or more Activities of Daily Living (ADLs) — such as bathing, dressing, eating, transferring, toileting, or maintaining continence — or when you require supervision due to cognitive impairment.
Most policies can help pay for:
- In-home care and home health aides
- Assisted living facilities
- Memory care
- Skilled nursing or custodial nursing home care
Policies usually include an elimination period (often 30–90 days) during which you pay out of pocket before benefits begin. Shorter elimination periods and broader coverage generally mean higher premiums. An elimination period can be thought of like a deductible, but it is measured in time rather than a specified dollar amount.
Pros and Cons of Long-Term Care Insurance (Reframed for 2026)
“One-third of today’s 65-year-olds may never need long-term care support, but 20 percent will need it for longer than 5 years.” Facts like this hit people differently. This statement may motivate you to prioritize your health today. Others may feel like they’re gambling by not planning for the 20% part of the statistic.
At Foundation Wealth Management, we understand that many factors come into play when making decisions related to your last years. Family history, personal preferences, current health circumstances, and other emotions. Our goal is to ensure each of our clients is informed to make confident financial decisions that honor themselves and their loved ones.
Potential Benefits of Long-Term Care Insurance
- May help protect your retirement from large, unpredictable care costs
- Can help protect your choice in where and how care is received
- Reduces the potential burden put on the family to provide care or to contribute financially
Potential Drawbacks of Long-Term Care Insurance
- Premiums can increase over time and may never be used
- Selecting a policy is often complex and highly individualized
- Elimination periods still require short-term cash flow planning
- Qualifying often requires applying by your mid-50s
Long-Term Care Planning Is Bigger Than Insurance
In 2026, many are finding long-term care planning is less about finding a perfect policy and more about integrating care decisions into your overall retirement strategy.
That may include:
- Evaluating how much risk your savings can absorb
- Coordinating long-term care decisions with estate planning
- Understanding how care costs could impact those around you
- Considering hybrid solutions or self-funding strategies
At Foundation Wealth Management, long-term care planning is approached as part of a broader retirement conversation, not a standalone insurance decision. If you’re unsure where long-term care fits into your plan, a conversation with a fiduciary advisor can help you weigh your options with clarity and confidence.
About Foundation Wealth Management
Foundation Wealth Management is a CPA-led organization that provides financial planning
services and tax planning support; services and outcomes vary based on each client’s
circumstances. Our team includes qualified professionals, such as CPAs and CFP®s, who
are integral to our service offerings. Our team includes 3 Certified Financial Planners: Burt
Hutchinson, CPA, CFP®, Paul LaViola, CFP®, and Stephen McDade, CFP®.
As fee-only financial planners, we are compensated directly by clients rather than through
commissions from brokerage or insurance products, which we believe helps align our
services with client goals.
Sources:
- SNF Care Coverage
- Costs of Long Term Care | FLTCIP
- How Much Care Will You Need? | ACL Administration for Community Living
- Understanding Long-Term Care Insurance | DL Law Group
- Understanding Elimination Periods in Long-Term Care Insurance – Compare Long Term Care
Disclosure Statement:
This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third-party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way whatsoever. This presentation may not be construed as investment, tax, or legal advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and is subject to change without notice. All investments are subject to risk, including the possible loss of principal.
The client scenarios presented in this blog are entirely fictional and created solely for illustrative purposes. Any similarities to actual persons, entities, or events are purely coincidental and unintentional.
Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website, Past performance is not a guarantee of future results.
