The Most Overlooked Retirement Conversation

The recent InvestmentNews column, “Advisors see long-term care as critical piece of retirement planning,” makes a strong case for treating long-term care (LTC) as a central, not peripheral, retirement concern. With healthcare inflation rising faster than general inflation—hospital and outpatient services alone climbed 5.3% year over year—addressing LTC sooner rather than later is simply prudent.

A Retiree’s Largest Asset Isn’t Off-Limits

The article stands out in reframing LTC as a financial reality, not as a mere possibility. With the average cost of a semi-private nursing home now topping $100,000 annually in many regions, a multi-year stay can be devastating for those who haven’t prepared. The column also underscores the trade-offs between strategies. Traditional LTC insurance can be costly and carries the “use it or lose it” stigma, though policies are more affordable when purchased earlier in life. Hybrid life insurance with LTC riders offers a more flexible “use it or return it” design. Importantly, the piece also acknowledges that home equity—often a retiree’s largest asset—can and should be part of the conversation. Reverse mortgages, long overlooked, may help fund care directly or cover insurance premiums, broadening the advisor’s toolkit.

What’s Missing

Still, some important gaps remain. Reverse mortgages are noted, but with little discussion of risks, such as the loan becoming due if the last borrower must permanently leave the home to receive care. Longevity risk is also underplayed. The Department of Health and Human Services estimates that 70% of Americans turning 65 will need some form of long-term care, and 20% will require it for more than five years. These figures show LTC isn’t just a budget line—it’s a widespread and often prolonged risk. The article also sidesteps stress testing. What if LTC inflation runs at 6% instead of 3%? How resilient are different funding strategies under that pressure? Exploring these scenarios would help advisors prepare clients for harsher realities.  

Funding the Probability

For many seniors, the real danger lies in needing care without the liquid resources to pay for it. Those without adequate savings, annuity income, or insurance may be forced to draw down assets rapidly, sell their home, or qualify for Medicaid only after depleting their estate. In such cases, families often shoulder the financial and emotional strain.

A Solution, Not a Cure-All

This is where reverse mortgages can play a role. By unlocking home equity without adding a monthly payment, they allow retirees to fund in-home care, assisted living, or nursing services while staying in their home. The flexibility is valuable, especially when compared to the burden of new debt. That said, trade-offs exist: heirs inherit less equity, and costs such as interest accrual and insurance premiums must be considered. And while a reverse mortgage won’t cover every possible expense—a multi-year nursing stay can quickly outstrip available funds—it can provide meaningful support when combined with insurance, savings, and annuity income. 

Conclusion

The Investment News piece is a timely reminder that rising healthcare costs make LTC planning non-negotiable. For seniors, incorporating home equity through a reverse mortgage can ease the burden of care without increasing their monthly obligations. Used wisely, it can complement other strategies and mean the difference between scrambling in crisis and aging with greater dignity and financial security. 

Have you considered addressing long-term care when meeting with homeowners? If not, why? Broaching the conversation could open their eyes to potential care expenses they may well not be able to afford. 

[Investment News] Advisors see long-term care as critical piece of retirement planning

By Shannon Hicks

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