You have spent years carefully working and planning so that you have enough income for a comfortable retirement. You may think your retirement savings are protected — but have you ever considered what might happen if you or your spouse required long-term care?

The cost of long-term care services — whether they are provided in the home, at a community facility, or in a nursing home — may not be covered under major medical plans or Medicare and can be a threat to your retirement savings.

Planning for long-term care can help you manage this risk and help give you more choices and more control over the care you receive.


Benefits of Talking about Long-Term Care

Nobody wants to think about losing their independence and having to rely on others for care.

But talking about, and planning for, long-term care is important because there is a good chance you will need long-term care services as some point in your life. In fact, about 70% of people over age 65 will require some care at some point in their lives, and the likelihood of needing care increases as you age.1

And, while long-term care is often associated with the effects of aging, it may be needed at any time, due to an accident or illness. Some conditions that might require long-term care include stroke, cancer, and Alzheimer’s disease or dementia.

Talking about long-term care is also important because the cost of long-term care services often exceeds what the average person can pay from income and other resources, particularly in retirement.

Consider this: The projected national average cost for five years of long-term care 30 years from now is over $1.9 million.2

Keep in mind that your retirement may be significantly longer than that of your parents and grandparents. If you’re a married couple and each of you is age 60, there is an 89% probability that one of you will live until age 85.3

As you get older, your healthcare expenses are likely to increase. In fact, according to the Employer Benefit Research Institute, a 65-year-old couple would need $265,000 in savings to have a 90% chance of meeting healthcare costs in retirement.4

And that doesn’t even include the potential costs of long-term care.


Paying for Long-Term Care

A common misconception is that Medicare or Medicaid will pay for all expenses. The reality is Medicare does not pay for assisted living facilities, continuing care retirement communities, or adult day services.

Medicare does provide limited coverage for nursing home care or home healthcare under certain conditions. For the most part, the costs of long-term care will be your responsibility.

One alternative to paying these expenses out of your own pocket is long-term care insurance. By paying an annual premium, perhaps from your investment earnings, you can transfer the risk to an insurance company and help protect your assets from long-term care costs.

Long-term care insurance can also help you maintain your independence and give you the freedom to choose the type of care you want.

Here is a checklist of questions to think about if you are considering long-term care insurance:


• How much protection (daily benefit) does the policy provide?

• Does the policy contain inflation protection?

• How many years of institutionalization are included?

• Is custodial care (assistance with basic daily activities, either in your home or a nursing home) covered?

• Is home care covered?

• Does the policy have restrictive provisions on preexisting conditions?

• Is the right to renew the policy guaranteed for life?

• How financially sound is the company offering the policy?

• What are the monthly/annual costs versus cash flow and investments?


If you’re not sure whether long-term care insurance is right for you, a financial adviser can help you understand and explore your options for offsetting the risks that long-term care might present to your retirement.


Steven Brettler is a financial adviser and branch manager with Morgan Stanley in Greenville, Del. He may be reached at (302) 573-4027 or




1 U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, July 2018.

2 John Hancock Insurance Long-Term Care Calculator. Based on five years of private room nursing home care during the years 2048 to 2052, and assuming a hypothetical 4.1% annual inflation rate.

3 Society of Actuaries ( Simple Life Expectancy Calculator (2017). Averages takes into account age and sex, using the 2012 Individual Annuitant Mortality table, with 1% mortality improvement.

4 EBRI Notes, Employee Benefit Research Institute, January 2017.


Article by Morgan Stanley and provided courtesy of Morgan Stanley Financial Advisor. Steven Brettler is a Financial Advisor in Greenville, DE at Morgan Stanley Smith Barney LLC (“Morgan Stanley”). He can be reached by email at or by telephone at 302-573-4027. His website is

This article has been prepared for informational purposes only. The information and data in the article has been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of the information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this article may not be suitable for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Insurance products are offered in conjunction with Morgan Stanley Smith Barney LLC’s licensed insurance agency affiliates.

Steven Brettler may only transact business, follow-up with individualized responses, or render personalized investment advice for compensation, in states where he is registered or excluded or exempted from registration,

© 2018 Morgan Stanley Smith Barney LLC. Member SIPC.

CRC 2283635 10/2018

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