In an Uncertain Economy, Delaying Long-Term Care Planning Could Cost You Everything

With the markets in flux and the economy wavering between growth and slowdown, it’s difficult not to feel a rising sense of uncertainty. If you’re over 40, you’ve likely been through ups and downs before—but this time, for some people, it feels different.

Your future is closer than ever, and the pressure to protect what you’ve worked so hard for is real. More and more Americans are rethinking their financial plans, not out of panic but out of a deep concern for what lies ahead.

But there’s one risk you cannot ignore: the rising likelihood of needing long-term care when you age.

• What is Long-Term Care?

When economic volatility strikes, people usually look at their 401(k)s or real estate. But what if your biggest financial risk isn’t the market — it’s your health?

Consider this: The Dow drops 700 points on a Thursday. That weekend, your father falls and suddenly needs comprehensive extended care. You’re not worried about the markets anymore. You’re scrambling to find a caregiver and figure out how to pay for it right now.

The Longevity Dilemma: Living Longer, Needing More Care

Thanks to medical advances and healthier lifestyles, Americans are living longer than ever. However, increased longevity also raises the odds of needing long-term care.

More than 56% of Americans turning 65 in 2025 will require long-term care services, according to the U.S. Department of Health and Human Services. Chronic illnesses such as Alzheimer’s, Parkinson’s, arthritis, and heart disease become far more common past age 70 — and they don’t just impact your quality of life; they create dependency.

If you're over 45, it’s time to rethink life expectancy. While the average U.S. lifespan at birth is about 76, once you reach 65, your odds of living into your 80s and beyond rise significantly. That’s called conditional life expectancy: the longer you live, the longer you’re likely to keep living.

The rise in conditional life expectancy makes it necessary to prepare for the costs and burdens of aging, including the impact long-term care will have on your retirement plans and your legacy and lifestyle.

More time for travel, grandkids, and hobbies? Absolutely. But also more time when you will need help with daily living.

The longer you live, the more likely you’ll need extended care. And quality care? It isn’t cheap.

Why Long-Term Care Planning is About More Than Money

Most people delay planning for care until it’s too late. And when that happens, families suffer.

When a loved one suddenly needs care, families go into crisis mode. That often means adult children, usually daughters or daughters-in-law, stepping in to coordinate or provide care themselves.

“It started with my dad needing help after a stroke. Before I knew it, I was missing work, managing caregivers, and trying to hold my own family together,” says Olivia M., 53, from Rochester, Minnesota.

Family caregiving comes at a steep emotional and financial price: lost income, strained marriages, career derailment, sibling conflict, and burnout. It also alters the family dynamic.

When the roles reverse and a child becomes the caregiver, love remains — but the balance shifts. What once was a parent-child relationship becomes layered with stress, sacrifice, and unspoken tension.

Long-Term Care Insurance preserves those relationships. It ensures your family can remain emotionally present without becoming overburdened by logistics and finances.

Cassandra Watson, CLTC, the President of Platinum LTC Solutions, and a long-term care planning specialist, says her group of highly regarded LTC Insurance specialists see this all the time.

Too often, families come to us after a crisis. By then, options are limited, and costs can escalate quickly. The reality is, over half of Americans turning 65 this year will need some form of long-term care.

Watson says that a sound financial strategy includes planning for that risk early—so you’re not forced into reactive decisions under pressure.

Self-Funding is a Gamble in a Volatile Market

Some believe they can self-fund future care with savings. But this plan depends on risky assumptions: stable markets, no major health events, and ideal timing.

In her white paper, Shawn Britt, CLU, CLTC, calls this strategy "un-suring."

Un-suring since you are unsure of the timing before the need may occur, unsure of the long-term rate of return, and unsure whether the market will be in and continue to stay in a healthy place while you begin withdrawing funds to pay for care. And keep in mind that when taking money out of a down market, the loss is permanently realized - you can’t grow it back let alone grow it forward, therefore one could equate this as a double loss.

Market downturns force you to sell investments at a loss. Taxes still apply. Your assets lose compound growth. And care may be needed when your investments are down — compounding the financial blow.

As of the week ending May 2, 2025, the markets remained volatile. The Dow Jones Industrial Average posted a weekly loss even after hitting an all-time intraday high earlier in the week. Mixed earnings, inflation data, and uncertainty about interest rates rattled investor confidence.

But here’s the key point: you can’t time the markets, and you can’t time when you’ll need long-term care.

Waiting for a "perfect" time to plan is unrealistic. A paper loss becomes real when you’re forced to liquidate assets to pay for care. And even then, you may face taxes.

That’s why protecting your current and future assets with guaranteed, tax-free Long-Term Care Insurance benefits is essential. It shields your family from financial and emotional strain and ensures access to quality care when needed.

Watson says that no matter how the economy is doing—booming or struggling—long-term care planning offers guaranteed, tax-free benefits that provide peace of mind for you and your family.

In a volatile market, guarantees matter. Long-Term Care Insurance provides tax-free, contractually guaranteed benefits—no matter how the markets perform. With the national average for in-home care exceeding $5,500 a month and rising, having a policy in place is not just protection—it’s a smart hedge against one of the biggest financial risks in retirement.

Linked-Benefit Policies: Flexible, Guaranteed Protection

Linked-benefit (or hybrid) Long-Term Care Insurance combines life insurance with long-term care benefits. Funded monthly or annually, many of these plans lock in younger-age rates with no risk of future premium increases.

A healthy 55-year-old man paying $10,000 annually for 10 years could have:

• A tax-free benefit pool of nearly $600,000 by age 64
• Over $1 million in coverage by age 90
• A Reduced Paid-Up (RPU) option to stop paying but keep partial benefits

All guaranteed, regardless of market conditions. Keep in mind that benefits are custom-designed with the help of an experienced Long-Term Care Insurance specialist.

Traditional LTC Insurance: Still Cost-Effective

Traditional policies remain the most affordable option for many. They provide:

• Lower premiums
• Partnership Program asset protection
• Optional return of premium riders
• Customizable inflation protection

Example: A healthy 56-year-old married man could pay $130/month for a $4,000/month benefit that grows 3% annually, reaching $8,131/month and a $304,919 benefit account by age 80. All tax-free.

Premiums vary dramatically between insurance companies.

• How Much Does Long-Term Care Insurance Cost at My Age?

Real People, Real Peace of Mind

“We got coverage when we were 58,” says Thomas G., 72, of Austin.

When my wife needed care last year, we had help within days — and I could focus on just being her husband.

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Tax Breaks and Smart Funding Tools

LTC Insurance also offers tax advantages:

• Premiums may be deductible for individuals and businesses
• HSA funds can cover eligible premiums tax-free (within IRS limits)
• Life insurance with LTC riders adds value without triggering taxes

IRS Increases Tax Deduction Limits for Long-Term Care Insurance for 2025

The Rising Cost of Care

According to a survey of long-term care costs nationwide, the national average for an in-home caregiver (44 hours/week) is $5,524/month.

However, the cost of long-term care depends heavily on where you live—and it's only going up. With growing demand and rising labor costs, you can expect the price of care to climb significantly in the years ahead.

Watson says that without Long-Term Care Insurance, you could be left with limited choices—either lower-quality care or relying on unpaid family members, which can deeply disrupt their lives.

Without a long-term care plan, your choices become limited. Families often face the painful decision between spending down retirement savings, settling for lower-quality care, or becoming full-time caregivers. In fact, over 56% of Americans turning 65 in 2025 will need long-term care services—that’s not a maybe, it’s a majority. LTC Insurance helps protect your savings and your family from being overwhelmed.

Best Time to Plan is Now

Experts agree that planning for long-term care should happen sooner rather than later. Most people secure LTC Insurance coverage between 47 and 67. Waiting means higher costs and more potential for health declines that can disqualify you from coverage.

Planning now locks in your health, age, and future peace of mind.

Bottom Line

Long-term care planning is no longer optional. Everyone should have a plan and discuss their long-term care preferences with those they love.

However, LTC Insurance is a necessary part of modern retirement strategy for many people. Whether you choose a traditional or hybrid policy, Long-Term Care Insurance gives you control, independence, and protection for what matters most.

Make sure to work with an experienced Long-Term Care Insurance specialist who represents multiple top-rated insurers offering the various types of policies available. The specialist will help you find the best solution based on your age, health, family history, and other factors.

Most financial advisors and general insurance agents lack the required state-mandated training for long-term care and only represent one or two insurance companies. A true LTC Insurance specialist can provide you with accurate quotes from all the top-rated companies, along with professional recommendations.