At some point, about 70 percent of Americans over 65 will need some type of long-term care, according to the U.S. Department of Health and Human Services.

For those whose retirements are upended by serious health problems, questions quickly arise. What kind of care will they need? How will they pay for it? Who will provide that care?  

“A lot of people have this notion that their children are going to take care of them,” says Darryl Rosen, founder of the Rose Advisory Group (www.roseadvisorygroup.com).

“Perhaps, but is that realistic? Where are your children going to be living 20 years from now? Are they going to have careers that they need to devote most of their time to? Are they going to be putting their children through college at the same time you need care?”

So making other arrangements is prudent, he says. That’s especially true when you consider just how staggering the cost for long-term care is. A report by Genworth Financial shows that the annual median cost for an assisted-living facility is $45,000. A private room in a nursing home is $97,455. Within 20 years, those prices are projected to grow to $82,275 and $176,015 respectively.

But with the right planning, there are options for paying for long-term care, Rosen says. They include:

• Self-funding. That’s when you use your savings to pay for the need. That could work for some people, depending on how much savings they have, what kind of care they need and how long that care will last. But for most people, this is not a realistic option. “It wouldn’t take long for the cost to eat up the savings of the average retiree,” Rosen says.
• Asset-based long-term-care insurance. This is an insurance product that provides a few alternatives that Rosen sums up as “live/die/quit.” If you need the policy for long-term care, it’s available. If you die before that need arises, someone you named receives a death benefit. If you decide after a certain amount of time that you don’t want the product any more, you can get a portion of your money back.
• Traditional long-term care insurance. This will insure you against a long-term care event so that you or your loved ones don’t suddenly have to empty the savings. The downside, Rosen says, is that it’s a use-it-or-lose-it proposition. If you never need long-term care, the money is gone.
• Specially designed cash-value life insurance policy. This allows you to use some of your death benefit from your life insurance in advance to pay for your long-term care.

Rosen says anyone saving and planning for retirement needs to consider long-term care in their calculations beyond the idea of moving in with the kids.

“You want to put yourself and your family in a position where your child may oversee your long-term care, but won’t be the one who provides the long-term care,” he says.