The $172,000 Retirement Surprise (And Exactly How to Avoid It)

So when you say, "My kids will take care of me," what you may actually be saying is "My kids will absorb a significant financial and personal cost so that I don't have to plan for it." That's worth sitting with. Hello friends, this is Tyler Gardner welcoming you to another episode of your money guide on the side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing. So let's get started and get you one step closer to where you need to be. Before we get into today's episode, I am genuinely thrilled to share this with you. After three years of listening to your questions and locking myself in a room to answer as many of them as I can, I decided it would be slightly more efficient to write a book. So I did. It's called Real Wealth. Published by Norton out December 6th of this year. Yeah, the kid whose parents thought he might be illiterate until he was 21 and whose high school English teachers passed him on the condition he never took another English class, and I'm dang proud of how it turned out and what I believe it can and will do for all of you. Here are three quick reasons to pre-order right now, and I'll tell you exactly how at the end. One, you'll actually finish this book. I know, low bar, except it really isn't. I've spent two decades watching people's eyes go blank the moment I said asset allocation. I took that personally. This is my response. You know the look, and I refuse to be the cause of it. Number two, the number one comment I get, thousands of times, is you left something out. You're right. I'm making 60 second videos about topics that deserve 60 minutes. This is my answer. Everything in one place. No countdown clock. No algorithm. Cutting me off. And number three, what I'm most excited about every month through December. I'll be releasing an exclusive pre-order incentive. And April's might already be my favorite. Pre-order this month and you're automatically in for a free two-hour live event on Wednesday, May 6th. We'll be expanding on some of the ideas present in the book and answering some of your most commonly asked practical and theoretical investing questions. This will be exclusively for people who pre-order. Here's all you need to do. Go to TylerGardiner.com, pre-order the book, then click the button on the page that says you've pre-ordered. Two minutes, you're in and I genuinely cannot wait to do this with all of you. Real wealth, December 6th. Your future self will appreciate having an all in one place and now on with the show. Alright, welcome back to your money guide on the side. I'm Tyler Gardiner and today we're going to talk about something that approximately nobody wants to talk about. And you know what, truth be told, I almost didn't make this episode because genuinely I know how few people want to talk about this, listen to others talk about it, or even think about it. Well, maybe especially think about it. But I did make the episode because approximately everyone needs to be thinking about the following right now. Long term care. I know, I can feel the collective enthusiasm through the microphone. You're on your morning walk or your commute or if you're particularly committed on your peloton, and you thought you were going to get another fun episode about index funds and market history and the occasional dry joke about behavioral economics. And instead, I've opened with the phrase long term care and you now are wondering if you should send this to your great grandparents. I apologize, sort of. Here's my defense. Last episode we talked about social security, specifically the decision of when to take it. The break even math, the health care gap between 62 and 65 and the six questions that can actually help you drive your decision. And if you haven't listened to that one, I would go back and do that first because today's episode is in a way a direct sequel. We are in a sense picking up where that one left off. Because here's the thread that runs through both the uncertainty of our own longevity. The central variable in the social security decision is how long you live. The central variable in the long term care conversation is also how long you live. And the uncomfortable truth that connects them is this. Living a long time is wonderful. In living a long time is expensive and the two facts are in constant creative tension with every financial plan ever made. A few episodes back. I introduced you to the importance of thinking about retirement before you retire. I know, novel concept. Well, now I want you to think of a long term care as the other red zone, the one that doesn't depend on markets at all. The one that can be triggered by a stroke at 71 or a fall at 78 or a dementia diagnosis at 82. And that can take a retirement plan that was working perfectly and convert it with startling speed into something that is no longer working at all. Here's the number I want you to carry through this entire episode. According to Fidelity's 2025 Retirey Healthcare Cost Estimate, a single person retiring at 65 may need approximately 172,500 saved after taxes just to cover basic healthcare expenses in retirement. That's not groceries, that's not travel, that is specifically medical costs. And that number does not include long term care, which the same estimate treats as a separate category because the costs are so variable and so potentially enormous that folding them in would make the number too frightening to put in a Fidelity report. Someone turning 65 today has nearly a 70% chance of needing some type of long term care before they die. 70% that's not a tail risk, that's not the thing that happens to other people, that's the base case. And yet according to Lemra, that's the insurance industry's research organization, only about 7% of Americans over 50 have a standalone long term care insurance policy, which means 93% of people in the demographic most likely to need this coverage have made either consciously or by default a decision to self-insure. Some of them made that decision intentionally with full information as part of a thoughtful financial plan. Most of them made it the way I make decisions about my car's maintenance by not thinking about it and hoping for the best. Today we're going to fix that. 5 clear points, real numbers, real options and at least a few lighthearted digressions because the only way to get through a topic of this important, and potentially this dry is to make it slightly less awful to sit with. And as always, familiar ask if you're finding the show useful in any way, please consider leaving a review on either Apple or Spotify or wherever you listen, as it helps others find the show and it helps me appreciate that I'm not just talking into the endless void of endless personal finance podcasts. Let's go. Now, blame the former English teacher and me, but before we get into the five points, I want to spend a few minutes on definitions because I find that people often have the wrong picture in their heads and that affects every decision downstream. When most people hear long term care, they imagine a nursing home, specifically, they might imagine the nursing home from the movie they saw once. Florescent lights, sad music, institutional food, maybe the occasional glimpse of nurse ratchets strolling by every now and again to make sure all is well and orderly in her place. You know, the general ambience of a place where hope goes to retire before you do. And then they think, I'll never end up there. I'm different. I'm active. I eat well. I have a peloton and spend Sundays with Ali love, and I am going to live to be 100 and then die instantaneously. The peloton will not save you. Here's the more accurate picture of long term care. Long term care is any ongoing assistance you need with what the industry calls activities of daily living or ADLs. That's bathing, dressing, eating, transferring, meaning getting in and out of bed or chair using the bathroom and maintaining continents. When you need help with two or more of these things, you typically qualify for long term care benefits under most policies. And here's what most people don't understand. The majority of long term care doesn't happen in a nursing home. According to the 2024 Genworth Cost of Care survey, which is the industry's annual Bible on this stuff, the most common forms of care are home health care. Health Aid Care, where a paid professional comes to your home to help you. Median Cost in 2024 was about 30 bucks an hour, where roughly $62,000 a year for a 40-hour week. Adult Day Services. You go to a community center during the day for supervision and care. Median Cost, 2024, about 20,000 bucks a year. Assisted Living, you live in a community with support staff, your own apartment, and shared amenities. Median Cost, about $64,000 a year. Memory Care. Specialized Assisted Living for dementia. Median Cost, about $72,000 a year. And Nursing Home Care. Full-time skilled nursing in a facility. Median Cost, about $104,000 a year for a semi-private room. And for a private room, north of $116,000, obviously depending on where you live and what kind of care you're looking for. Keep in mind. Medians are medians, which means half the country costs more than that, and those costs have been rising at between 3 and 5 percent annually. Which means, if you're 50 today, and I know a lot of you are, and you need care at 80, you should roughly double every number I just gave you. And the average length of a long-term care need is 2.5 years. But averages, as we've established on this show over and again, are deeply unreliable guides to individual experience. About 20 percent of people who need long-term care need it for 5 years or more. And for dementia specifically, which affects roughly 1 in 9 people over 65, and roughly 1 in 3 over 85, the average duration of care from diagnosis to death is 4 to 8 years, with costs that start high and climb as the condition progresses. Do the math. Five years of memory care at today's costs inflated 2045 prices, we're talking about a number with a lot of zeros in it. We're talking about the kind of number that converts comfortable retirement into my kids arguing about selling the house. Which brings us to the five points you need to know. This week's episode is brought to you by Thrive Market. And I'm going to tell you exactly why this one resonated with me so personally. For those of you who know me, I am a raging introvert. I spend most of my day walking through the woods and Vermont with my dogs or making content for you. I do not find the grocery store to be a recreational activity. I find it to be a mild form of punishment involving fluorescent lighting and too many decisions about things I don't understand. So when someone told me I could have access to high quality, pre-vetted, healthy ingredients delivered to my door, click of a button, no store, no label reading, no Googling whether some 14 syllable ingredient is slowly dissolving my liver. I was in. That was the whole pitch. I didn't need anything else. Here's what actually makes it work though. Thrive Market has already restricted over a thousand ingredients, meaning every product on the site has been vetted before it ever gets to you. No stressing over labels, no ingredient rabbit holes at 10 pm, the work is done. They also have over 90 dietary filters, so you're only ever looking at products that actually fit how you eat, whether that's high protein, low sugar, gluten free, keto, whatever your household needs. And the math is genuinely embarrassing in the best way. $5 a month. That's the membership. Each member's make it back in the first two orders through member pricing alone, up to 30% off, free delivery and qualifying orders, no per order fees, no tip math, just one flat cost and a cleaner pantry. Also worth knowing and I absolutely love this part. Every paid membership sponsors an additional membership for a family and need, a teacher, a first responder or a veteran through their Thrive Gives program, which means the $5 is doing more than one thing, this is exactly my kind of company. Join Thrive Market today by visiting ThriveMarket.com/tyler and get $20 off your first three orders plus a free $60 gift. With a 30 day risk free guarantee on the annual membership, this is a no-brainer and there's no reason not to try it. That's ThriveMarket.com/tyler. Number one, the link to the Social Security episode or longevity as a blessing with a real financial consequence clause. Let me bring this back to the Social Security conversation that we had last week because the connection is important and I do not want it to get lost. In that episode, we talked about break even math. If you take Social Security at 62, you break even against waiting until 70 at around 80 to 81. After that break even point, the person who waited wins and they win by an increasing margin for every year they keep living. Here's the other side of that same coin. Every year of life past that break even point is also a year of potential additional long-term care need. Every year of the longer retirement that makes the delayed Social Security strategy mathematically superior. This is also a year during which the probability of needing care increases. This is not an argument against living long. I want to be very clear about that. This is an argument for understanding that longevity has financial consequences that most retirement plans don't price in correctly. Think about it this way. A retirement plan that's built on the 4% rule out of a $1.5 million portfolio, Social Security starting at 67 and about a 90,000 annual spending budget is a perfectly respectable retirement plan. For running through a money carless simulation, it will look solid and it has about an 85% probability of success over 30 years. What that simulation almost certainly does not include is a 3 year assisted living stay at $75,000 per year. $2.2 million today's starting at age 82 because that's not a market event, that's not sequence of returns risk, that's a healthcare event and it's priced differently and planned for differently and almost universally planned for inadequately. Three years of assisted living at today's median cost is $192,000. At 2045 cost assumptions, it's closer to $350,000 and that's not an outlier scenario, that's a coin flip. Now, compound this with the Social Security timing decision. If you took Social Security at 62 and your monthly benefit is around $1400 a month and your care costs $75,000 a year, Social Security is covering $16,800 of a $75,000 bill, it's not nothing but it is not going to solve the problem. If you took it at 67 and you're getting 2000 a month, you're covering $24,000 of a $75,000 bill, better still not solving the problem. The math is the math, long term care is a risk that sits orthogonally to your investment portfolio and your Social Security strategy. It doesn't care what your allocation is, it doesn't care what your withdrawal rate is, it arrives, if it arrives and it presents a bill and your plan either has a way to pay that bill or it doesn't. Here's the thing I want you to take from point one stated plainly. Your retirement plan is not complete until it has an explicit answer to the question, what happens if one or both of us needs long term care. What a vague gesture toward will figure it out in actual answer with numbers attached to it. We're going to help you build that answer over the next four points. Number two, the four options to pay for long term care explained as honestly as I can present it. There are exactly four ways to pay for long term care, no more no less. I want to walk through all of them, including the ones that sound better than they are because the honest version of this conversation is going to be way more useful for you than the comfortable one. Option one, you can self-insure. This just means you pay out a pocket, your savings, your investments, your assets, you're the insurance company, except you'll most likely be more willing to take your own claims seriously. This is actually a completely legitimate strategy for people who have enough assets to absorb the hit without depleting what they need to live on. General rule of thumb from financial planners who specialize in this area is if you have about 2.5 million or more in liquid investable assets, self-insuring is a reasonable choice. The cost of a long term care event, even a significant one, is unlikely to fundamentally threaten your financial picture. Below 2.5 million. And particularly below 1 million, self-insuring is less a strategy and more hope dressed in khakis from an era where people still wore khakis. The risk with self-insuring at any asset level is what planners call the catastrophic scenario, not the average 2.5 year care need, but the 8 year dementia progression. Or the couple where both partners need care simultaneously. the situation where care costs in a high cost metropolitan area are running $180,000 a year and the climbing. At that point, even a substantial portfolio starts to look different. Not ruined, perhaps, but changed. Your children's inheritance, your charitable intentions, your spouse's financial security, all of it starts to compress. So self-insuring is a choice, and it should be a conscious one, not a default. Option two, Medicaid. Medicaid is a federal state program that covers long-term care for people who have exhausted their own assets. If you spend down to roughly 2,000 accountable assets, the exact threshold varies by state, Medicaid will cover your nursing home costs. I want to say this clearly, and without judgment. Medicaid is a legitimate safety net that millions of Americans rely on, and it does what it's designed to do. I'm not going to suggest there's anything shameful or wrong about it. What I am going to tell you is that Medicaid is not a long-term care strategy. It's what happens when your long-term care strategy has failed or never existed in the first place. Because getting to Medicaid eligibility means you have spent down virtually everything you accumulated over a lifetime of working and saving. Your home in many states is subject to Medicaid estate recovery after you die, meaning the state can come after it to recoup what it paid for your care. And Medicaid doesn't pay for the care you might want. It pays for the care that's available within its reimbursement rates, which in most states means a semi-private nursing home room, not an assisted living facility, not home care at the level you might prefer, not memory care in the facility you might prefer. Medicaid as a safety net, yes, Medicaid as a plan, no. Option 3 - Traditional Long-Term Care Insurance This is the product that's been around since the 70s, and it has had to put it as diplomatically as I can, a very complex history. The insurance industry badly misprice these policies in the early years, dramatically underestimating how long people would live and how much care they'd need. The result was a wave of massive premium increases, sometimes 50, 80, even 100% that hit existing policyholders who were already paying and couldn't easily switch. Several large carriers exited the market entirely. My guess is most of you know what I'm talking about. The market has stabilized significantly since then. The carriers still in this space have much better actuarial models, but premiums are higher, your writing is stricter, and the product has a reputation hangover that's made people slightly gun shy. Here's what you need to know about traditional LTC insurance. If you're going to buy it, I cannot echo this one enough. The sweet spot is your mid to late 50s. The premiums are meaningfully lower than in your 60s, and you're likely still healthy enough to qualify. A 55-year-old couple can often get a solid policy for 2,500 to 4,000 per year combined. If you wait until 65, that same coverage can run 5,000 to 8,000 or more easily annually, if you can still qualify at all. The standard policy features worth understanding are the benefit period that's how long the policy pays typically 2-5 years or lifetime, daily or monthly benefit amount, how much it pays per day or month, a elimination period that's the deductible equivalent, usually 90 days you pay yourself before benefits kick in, and inflation protection. This is critical. You want to look for 3% compound inflation protection minimum because care costs 10 to rise faster than general inflation. Option 4 Hybrid Policies This is the fastest growing segment of the long-term care market, and for good reason, a hybrid policy combines either life insurance or an annuity with a long-term care benefit. Here's the basic structure. You put in a lump sum or pay premiums over time. If you need long-term care, the policy can pay those benefits. If you die without ever needing care, the scenario everyone secretly hopes for, the policy pays a death benefit to your beneficiaries. You don't lose your premiums if you stay healthy. The pitch is you have to die or need care, so one way or another, this money does get used. The trade-off is that these products are far more complex, often require a much larger upfront investment, and the long-term care benefits are sometimes less robust than a standalone LTC policy for the same premium. But for people who mocked at traditional LTC insurance because it felt like betting against their own health, the hybrid structure removes that psychological friction. These are absolutely worth exploring, particularly life insurance linked hybrid policies, which have become significantly more competitive over the last five years. Now a quick honest summary of option four, there is no perfect product. Every option involves trade-offs between premium cost, coverage quality, flexibility, and the uncomfortable reality that you don't know whether you'll need this or how much. What I can tell you is that doing nothing, choosing to not choose, is also a choice, and it's the least deliberate one available. Also, just for the record, no, I don't sell insurance and hybrid policies. This week's episode is brought to you by FASIT, and before I read this one, I want to say something that I mean very genuinely. I use AI every single day. I'm on record about this, so what follows is not a Luddite manifesto. It's just three things I've noticed, and I talked about all three of these concerns in my AI podcast last week. First, when you ask AI to help plan your finances, you're feeding a learning model your proprietary data, salary, debt, retirement accounts, your entire financial biography. And somewhere in that terms of service document longer than your mortgage, is language granting fairly broad rights to that conversation, worth knowing before you type. Second, AI hallucinates. That's the industry's delightful word for confidently presents invented information as established fact. As a test, I recently asked a popular AI tool for the 2026 SEP IRA contribution limit. Wrong. I pushed back. New number. Also wrong. One quirk in a poem, meaningful liability in your tax plan. Third, garbage in, garbage out. AI is only as good as the questions you bring to it, and most of us don't yet know the right questions to ask about our own financial lives. So here's what I actually want for you. Use AI to get curious. Use it to learn the language, and then when you're making decisions that dictate the rest of your financial life, go talk to a human, specifically a CFP professional at FASIT who combines real expertise with technology to build an actual plan around your actual life. One flat annual membership fee, no commissions. AI can give you a definition. FASIT will help you live the life you worked so hard to build. Go to FASIT.com/tyler to get started. I want to give you a framework for Thread Embroidery. I want to give you a framework for thinking about your own number, not a generic number, yours. Step 1, I want you to estimate your care cost exposure. You're going to go to GenWorths, that's G-E-N-W-O-R-T-H's Cost of Care Calculator. It's free at GenWorth.com and look up the median costs in your area or where you expect to retire. Costs very enormously by geography. The same assisted living facility that costs 45,000 a year in rural Iowa might cost 120,000 a year in San Francisco. Your number is the number for your actual location. Pick the care setting you'd realistically want, not the worst case nursing home you'd accept, the setting that would actually match your quality of life expectations. Step 2, I want you to estimate your coverage period. Now the average, as we've gone over, is 2.5 years. But here's where the Social Security conversation becomes directly relevant. If you come from a family of people who live into their late 80s and 90s, your odds of the longer-tail scenario are higher. Use 5 years as your planning horizon, if you want to be super conservative, it's the coverage period most financial planners recommend as a baseline for exactly this reason. Step 3, now I want you to calculate your budget. calculate your exposure in today's dollars and then inflate it. Let's say assisted living in your area runs at 72,000 per year. 5 years. exposure and today's dollars about $360,000. Now, in fleet to the year you might need it. If you're 50 now and might need carrot 80, that's 30 years of healthcare inflation, which has historically run about 5% annually. So at 5% over 30 years time value of money, that 360,000 becomes approximately $1.55 million in nominal dollars. This is not a number I'm making up to scare you. That is a number I'm presenting because you should at least know it, and most people don't. Step 4, I want you to figure out which bucket pays. How much of that can your portfolio absorb without fundamentally changing your plan? This is the question that tells you whether self-insuring is actually viable. If a one and a half million dollar caravan, it's 40% of your projected portfolio, and you have a spouse who still needs to live on the rest of it, that's a different conversation than if it's 15% of a larger portfolio with plenty left over. Step 5, assess your insurability window. I want you to go to the doctor, get a realistic health assessment. Have the conversation you've been avoiding because the harsh truth about long-term care insurance, both traditional and hybrid, is that you can only buy it when you're healthy enough to qualify, and conditions that are common after 60, diabetes, obesity, certain heart conditions, and any existing cognitive concerns can get you declined or rated up significantly. The window for getting good coverage at good prices is roughly a just 50 to 62. After that, it starts to narrow and it narrows quickly. After 65, it's effectively closed for a lot of people. The single most actionable thing you can do after listening to this episode, just get a quote. This week, not sometime soon, a quote from two or three carriers takes about 20 minutes with a broker who specializes in this product. You will know your actual number right now you're working with guesses and guesses are how people get surprised. Number 4, the five planning mistakes people actually make. This is the section I want you to share with someone you love, because these are the mistakes I see repeatedly and they are all completely avoidable. Mistake number 1, Assuming Medicare covers this, it does not. Well, not really. Medicare will cover short term of skilled nursing facility care up to 100 days following a qualifying hospital stay of at least three days and even then only under specific conditions and even then only at declining benefit levels after day 20. What Medicare does not cover is custodial care, the ongoing help with activities of daily living that constitutes the vast majority of long term care. This misconception is so widespread that I'm going to say it once more slightly louder. Medicare does not pay for long term care. Medicaid pays for long term care but only after you've largely run out of everything else. These are different programs, please stop confusing them as your future self will thank you. Mistake number 2, Assuming your kids will take care of you. This is the sentence that family, therapists and financial planners both dread hearing. Not because it's said with anything other than love, it usually is, but because it's a retirement plan that operates on a foundation of hope. And it makes assumptions about your children's lives, locations, health, finances, relationships, and availability that may not hold 20 years from now. I will also say this gently. Unpaid family caregiving is estimated to cost American caregivers about $522 billion in loss wages, reduced retirement contributions, and career interruption annually. So when you say my kids will take care of me, what you may actually be saying is my kids will absorb a significant financial and personal cost so that I don't have to plan for it. That's worth sitting with. Mistake number 3, Waiting until you need it to figure out what you want. By the time a care need has arrived, the following things are often true. You're in no condition to make clear decisions. Your family is stressed and overwhelmed. The good facilities have a wait list, and the window for insurance has long since closed. The planning conversation needs to happen at a calm kitchen table in your 50s, not in a hospital hallway in your 70s. Have the conversation now. Where do you want to live if you can't live independently? What care setting would you find acceptable and which would you find unacceptable? What are your non-negotiables? Who do you want making decisions if you can't? These are not morbid questions. They're the best questions you can ask yourself and your spouse because the answer to nobody planned for this is usually chaos and family conflict on top of an already crummy situation. Mistake number 4, Not looking at this as a couple. If you're married, long-term care is not your individual problem. It's your household problem, and it's a problem with an asymmetric quality that most couples don't fully reckon with. Consider this. One spouse needs significant care for three years while the other is healthy and still living at home. The care costs are reducing the household shared assets. The healthy spouse's lifestyle is being compressed by the care costs, and the healthy spouse still has their own potential care need coming at some undefined point in the future. This is why financial planners who specialize in retirement often suggest a shared care approach to long-term care insurance. Policies designed specifically for couples that share a pool of benefits between both people, providing coverage for both without paying full premiums on two separate policies. And Mistake number 5, Treating a Hybrid Policy as an Investment. Now, we've been over this before. I did an episode about two months ago on the insurance industry, and if you didn't listen to that one, please go back and do just so you can protect yourself, and I've mentioned hybrid policies in the section above. They're worth considering seriously, but I want to flag a framing error that I see over and over again. People evaluating a hybrid life long-term care policy primarily as an investment, comparing the internal rate of return to what they might get in the market, rather than as insurance. Insurance is not an investment, no matter how much the insurance industry tells you it is. They're lying to sell it to you, it's nonsense, it's unethical BS. Insurance is the transfer of a risk you can't comfortably self-absorb to an entity that can because it pools said risk. Evaluate a hybrid policy on what it does if you need care, what it leaves to your family if you don't, and whether those outcomes are acceptable relative to the premium, don't primarily evaluate it on whether the IRR beats the S&P 500. That's not the right question at all. Number five. So let me try to wrap up this episode with some very actionable guidance for you. Here is a six-step actual plan, and yes, I would love it if you write this down. Action one, have the kitchen table conversation this month. You in your spouse or you and whoever is in your financial life sit down and answer the five questions I already mentioned. Where do we want to live if we can't live independently? What care setting is acceptable to us and what's not? Who makes medical decisions if one of us can't? Who manages finances if one of us can't? And what do we know about both of our family histories with longevity and dementia specifically? That last one matters. Dementia has a genetic component that's worth knowing about. It doesn't determine your outcome, but it informs your planning horizon. If your mother and her mother both had dementia, your planning horizon looks different than if your family tree is full of people who dropped dead on tennis courts at 89. Both are fine outcomes, cosmically speaking. They just required different financial plans. Action two, get your actual cost estimate this week. Genworth.com, 10 minutes, your geographic area, your preferred care setting, the current cost, and the five-year inflation projection. Write the number down. This is the number your plan needs to address. Action three, assess your self-insurance viability, honestly. If your projected retirement portfolio is 2.5 million or above, and your care cost estimate for five years at inflated costs is less than about 20% of that, self-insuring may be appropriate for you. Talk to a fee-only financial planner who specializes in retirement income about this specifically. Not your general investment advisor. Someone who thinks about decumulation and health care costs for a living. If your projected portfolio is under 1.5 million, self-insuring the full risk is genuinely risky. You should almost most certainly be looking at some form of supplemental coverage. Action 4. Get a long-term care insurance quote, "actual numbers from at least two carriers." I want you to work with an independent broker who represents multiple carriers rather than an agent captive to one company. And yes, many of your financial advisors, whether they tell you this or not, are buddy buddies with one insurance company. So please make sure you're working with someone independent who is not beholden to someone else. I believe the two strongest remaining traditional long-term care carriers, as of early 2026, are mutual of Omaha and nationwide. But the landscape changes, so verify this with an independent broker. I want you to look for a policy with three to five year benefit period, monthly benefit of at least $5,000 in today's dollars, 90-day elimination period, and 3% compound inflation projection. These are the baselines. Your specific situation may suggest adjustments. If you want to explore hybrid policies, a few I know about are asking for a quote on a link in Money Guard or Pacific Life Premier Care product. Both are solid hybrid life LTC products with decent to strong track records. Again, verify with a broker because I cannot tell you in an episode what the current market looks like for your specific age and health history and what I have in front of me today may have already changed by the time you hear this. Action 5. The part I know you don't want to do, get your legal documents in order. A long-term care plan without the legal infrastructure to execute it is incomplete. At minimum, you need a current, durable power of attorney, which designates who makes financial decisions if you're incapacitated, and a healthcare proxy or healthcare power of attorney, which designates who makes medical decisions. You also need a living will or advance directive that describes your wishes for end of life care so that the person you've designated isn't left guessing under the worst possible circumstances. If you don't have these documents, you are not ready for a care event. Get them done. In a state attorney can typically execute a basic set of these documents for $500 to $1,500. This is not a large sum of money relative to what it might end up protecting. And action 6. Finally, revisit this plan every five years. Your health is going to change, your assets will change, the care costs landscape will change, the insurance market will change. A plan that was corrected 52 may need adjustment at 57 and definitely needs review at 62 and so forth. This is not a set it and forget a topic. It's a living plan that requires a periodic maintenance check like a car that actually matters to you. In review, some quick numbers I just want you to remember and hear one more time. 70% is the probability a 65 year old will need some form of long-term care. 172,000 bucks estimated health care costs or retirement for a single person before long-term care. 64,000 a year median assisted living cost as of 2024. 104,000 to 116,000 a year median nursing home semi-private to private room as of 2024. Two and a half years average long-term care need use five years as your planning period. 5% approximate annual health care cost inflation rate doubles cost roughly every 14 years. 7% percentage of Americans over 50 with standalone long-term coverage. And again, your four options, self-insure, viable if you have over 2.5 million in liquid assets, risky below 1.5 million. Medicaid, safety net, not a strategy, traditional long-term care insurance, best bought at 50 to 62. I would shot Mutual of Omaha or Nationwide. Know this episode is not sponsored by either. I say that as objectively as I can. Number four, hybrid life long-term care. Also not sponsored, but I would check Lincoln Money Guard or Pacific life premier care. And finally, the policy features I want you looking for, the benefit period of three to five years minimum, a monthly benefit of $5,000 plus in today's dollars, in a elimination period of 90 days, and inflation protection of 3% compound minimum. Now if you need to go back to that action plan, please do. I've also included in this week's newsletter that you can sign up for at TylerGarner.com if you would prefer to have something in print. So ultimately, where do I land on this topic? Well, I'll start with being as honest as I can about the fact that it's a topic that I find genuinely uncomfortable, which is probably why I think it's so important to discuss directly. And, I'll be even more honest, at 43 years old, I have officially done none of this. I'm still clearly in my, it won't happen to me, phase of life. And for lack of better words, do as I say, not as I do, or just do what works for you. But I have not done this yet and just talking through these things together today, I now actually am a little more inspired to go do so. Long-term care planning is hard and not because it's complicated. It's actually fairly straightforward once you've got the numbers. But because it does require us to sit with a picture of our future selves, that most of us would rather never contemplate. The version of us that can't drive. The one that needs help bathing. The one that might not recognize the person we've spent 40 years building a life with. That discomfort is real. And it's legitimate, and I'm not going to tell you to just power through it. What I am going to tell you is that people who have this conversation, the ones who sit down at the kitchen table while everything is fine and make actual decisions. Those people give their families an extraordinary gift. Not just financial protection, though that's real. The gift of not having to guess. Of not having to argue about what you would have wanted. Of not having to make agonizing decisions under duress without any guidance from the person they're trying to protect. Planning for this is an act of love, and I mean that without irony, and I know. It's a different tone for this show, but it's what it's called for. And here's the thing that ties back to every episode I have ever done of this show, the Social Security episode, the 4% rule episode, all of it. Financial planning goes so far beyond money. Money is just the instrument. Financial planning is about protecting your ability to live the way you want to live for as long as you live on your terms. Planning term care planning is that project, and it's most practical, most urgent, most often neglected form. Do the thing, have the conversation, get the quote, call the estate attorney, not because it's fun. It is emphatically not fun. I will not pretend otherwise, but because your future self and the people who love your future self and your current self will have a completely different experience depending on whether you did. Once the episode, five points, got some real numbers, you got six actual action steps, you got a general worth calculator, some policy features, you got your legal documents coming to you, everything you need to start, rather than continue not starting. Once again, if this was useful, and I'm genuinely hoping that this might be one of the more useful episodes I've made, you know the drill. Apple podcast, Spotify, 45 seconds, please consider leaving a review and help more people find the show and start thinking about the things that we all know we need to be thinking about together. Next episode, we're going back to the four percent rule, which I've hit on a few times over the past year, but I have some updates that might also prove helpful as you take the next step closer to where you need to be. I'm Tyler Gardner, this is your money guide on the side, and as always, hope this gives you something to think about throughout the week ahead. Thanks for tuning in to your money guide on the side. If you enjoyed today's episode, be sure to visit my website at TylerGardner.com for even more helpful resources and insights. And if you're interested in receiving some quick and actionable guidance each week, don't forget to sign up for my weekly newsletter where each Sunday I share three actionable financial ideas to help you take control of your money and investments. You can find the sign up link on my website, TylerGardner.com, or on any of my socials at socialcap official. Until next time, I'm Tyler Gardner, your money guide on the side, and I truly hope this episode got you one step closer to where you need to be.