I’ve recently had several conversations about long-term care (LTC). Much like the messy state of health insurance, LTC (and how families should plan to pay for it) feels like a moving target in several ways:

Inflation of health-related expenses far outstrips the general inflation rate
The cost of LTC insurance is volatile (partly due to point #1 above) as some insurers choose to leave the market and policies vary widely by their terms and features
The risk of “getting it wrong” is significant and can rapidly deplete one’s retirement nest egg
Medicaid may kick in for some depending on one’s income level, but Medicaid programs are state-run and vary widely, especially considering not all states have expanded their Medicaid programs.

I could go on. Suffice it to say as baby boomers continue to age, LTC is starting to feel like the perfect storm.

In my view, most pre-retirees who are 10-20 years out from retirement should think about how to pay for LTC. Here are a few steps to take:

Figure out your shortfall - Like retirement, you need to know the potential costs of needing LTC and how much cash you may need to cover those expenses. These costs will include the expected inflation rate of health expenses and the cost of LTC-related services. You can contact me to have an advisor help you through it, or you can DIY using a tool like www.saturdayinsurance.com.
Do you need LTC insurance? - Once you know your potential shortfall you can weigh the option of purchasing LTC insurance. Given how costly this insurance can be, my general feeling is if you're rich enough you probably don’t need it (you can use your nest egg to pay), and if you’re poor enough you probably don’t either (you’ll likely qualify for Medicaid coverage). The middle group stands to benefit most from LTC insurance.
Buy a policy when you’re younger - If you decide you need a LTC policy to cover or supplement your LTC costs, you’re always better off buying a policy when you’re younger. Like life insurance, as you age your likelihood of ending up in LTC for a while increases, so policy costs increase as well.
Keep the premiums affordable - LTC insurance isn’t like term life insurance which is designed to lapse after a certain period of time. You pay the premiums on your LTC policy throughout retirement.

For some additional insights into long-term care insurance costs, take a look at this article from Saturday Insurance.