As you plan for retirement, you will likely be able to factor in some costs. Specifically, you will need a roof over your head, a way to get around town, food and medicine. But what about long term care?

It’s easy to assume that you won’t have to worry about long term care, but in reality a huge 70% of seniors 65 and over end up needing care of this nature. And if you can’t figure out how to pay for it, you’re going to take a major shock.

Sadly, only 31% of Americans have a plan in place for how to pay for long-term care, according to recent study investigation by the American College of Financial Services. If you’re not in that statistic, you’ll need to start working out a few numbers – and figuring out how you’re going to tackle what could be an astronomical expense.

Are you ready to pay for long term care?

Many people assume that Health Insurance will foot the bill for long-term care, but that couldn’t be further from the truth. Although Medicare pays for some types of rehabilitative care, private care will not be eligible for coverage, which means you will have to pay for it yourself. On-call care refers to assisted living, as opposed to care related to a specific injury, illness or medical condition. And if you need it, here are the costs you might have to pay:

Data source: Genworth.

If these numbers strike you as shocking, you should know that in some parts of the country they are much higher. And that’s why you need a specific plan in place that allows you to pay for long term care.

Protect yourself – and your loved ones

If you end up needing long-term care and you don’t have the cash or the right insurance to foot the bill, it’s not just your personal finances that are at risk; your children, or even your grandchildren, could also suffer financially. That’s why it’s crucial that you put a plan in place, and that plan can involve a number of things:

• Dependence insurance. You’re more likely to get a policy approved if you apply in your mid-50s to early 60s, and the sooner you do, the more affordable your premiums will likely be. Long-term care insurance doesn’t come cheap, but if you need long-term care, your benefits could more than outweigh your premiums over the years.
• Put money in a health savings account. HSA funds never expire and benefit from favorable tax treatment. The money you invest in an HSA can be used to pay for not only long-term care, but also long-term care insurance.
• Complete your retirement plan. Whether you save for your retirement years in a 401 (k) or an IRA, the more you invest in your long term savings, the more you have available to cover your medical needs. In fact, you may want to favor a Roth 401 (k) or IRA over a traditional retirement savings plan, because that way you will benefit from tax-free withdrawals during your retirement years.

Don’t settle for the wing

Long-term care is not an expense you can ignore or hope not to encounter. Rather than leaving things to chance, put a plan in place to deal with it. It could bring you and your loved ones a world of peace of mind.