Expensive But Worth It

Dean and his wife are both 63 and retired with no children and no debt. Long-term care insurance will be about $4,500 a year. Should they still invest in long-term care insurance?

QUESTION: Dean in Texas and his wife are both 63 and retired with no children and no debt. They make $5,000 a month in retirement income. They have $750,000 in savings, and their home is worth $300,000–350,000. Long-term care insurance will be about $4,500 a year. Should they still invest in long-term care insurance?

ANSWER: I think it’s smart to buy it. The average nursing home stay is $30,000–50,000 a year. One year, and you’re going to get your money back. That’s what it comes down to. The averages are that you’re going to spend some time there, and the averages are that she is going to outlive you 75% of the time. If I’m in your shoes, I’m buying it. It is expensive, but I recommend that anyone 60 years old or older buy it for that reason. I don’t want her having to figure out which of her investments she cashes out if you’ve had a stroke and are in a wheelchair and are in a nursing home.