Thinking about a time when you or a loved one might need nursing care is never easy. Unfortunately, nearly 70% of people aged 65 and older will require some form of long-term care during their lifetime, according to national data. In California, where both living and healthcare costs rank among the highest in the nation, planning for future care becomes even more important.

Many assume Medicare or Medigap will cover long-term care, but these programs typically only pay for short-term rehabilitation or hospital stays, not ongoing custodial support. That’s why long-term care planning in California is a critical part of the retirement conversation.

This blog from Bulman Wealth Group highlights key factors to consider when preparing for care in retirement. Planning early can help you maintain control, independence, and financial stability.

Understanding Long-Term Care in California

Long-term care refers to a broad range of personal support services provided over an extended period, often for individuals living with chronic illness, disability, or cognitive decline. While many people think of nursing homes first, California offers several levels of care:

• In-home care, which allows individuals to age in place with assistance from caregivers
• Assisted living, providing housing and help with daily activities in a community setting
• Skilled nursing facilities, which deliver round-the-clock medical and rehabilitative care

As of 2024, the average cost of a private room in a California nursing home exceeds $12,000 per month. Assisted living facilities typically range from $5,000 to $7,000 monthly, depending on location and services provided. With costs expected to continue rising, even short stays can quickly affect your retirement savings.

Factoring in both the financial and logistical realities of long-term care is an important step toward confident and comprehensive retirement planning in California.

Financial Aspects of Long-Term Care Planning

For many Californians, a mix of personal funds, insurance, and public programs forms the foundation of care funding, but each comes with trade-offs.

Personal savings and investments: Many retirees use their nest egg to fund care, but costs can escalate quickly, especially when factoring in market volatility and inflation. Without careful integration into your broader income strategy, long-term care needs may deplete assets meant for other retirement goals and obligations.

Long-term care insurance: Standalone long-term care policies or hybrid products (which combine life insurance with care benefits) can offer flexibility, but qualifying depends on your health. If you’re considering this route, earlier enrollment is typically more affordable and accessible.

Government programs: Medi-Cal (California’s Medicaid program) is a last-resort option for some, but eligibility requires significant asset reduction. Additionally, recipients may not have full control over the type or location of care received. Relying solely on Medi-Cal often limits personal choice.

Coordinating your retirement income, asset withdrawals, and insurance is key to long-term care planning in California. It may help you stay financially balanced while preparing for potential extended care needs.

Tax Considerations in California Retirement

In some cases, long-term care expenses can provide access to potential retirement tax benefits that California residents may overlook. For example, certain long-term care insurance premiums may be tax-deductible depending on your income and filing status.

Additionally, medical expenses—including qualified long-term care costs that exceed 7.5% of your adjusted gross income—may be deductible if you itemize.

If you’re taking Required Minimum Distributions (RMDs) from traditional retirement accounts, consider how those withdrawals might support future care needs. With thoughtful RMD tax strategies, you may be able to reduce taxable income, especially when aligning distributions with eligible deductions.

Whether funding care directly or integrating RMDs into your income plan, it’s worth evaluating how long-term care expenses intersect with your overall tax strategy.

Estate and Legacy Planning With Long-Term Care in Mind

Planning for long-term care isn’t just about finances—it’s also about protecting your wishes and maintaining control. This is where estate planning provides an additional layer of protection and clarity.

Legal documents that support care decisions: Documents like powers of attorney and advance health care directives allow trusted individuals to act on your behalf if you’re unable to make decisions due to illness or injury. Without these in place, your family may need to go to court to gain authority, delaying decisions during a critical time.

Trusts and asset protection: Revocable living trusts can help manage assets during incapacity and avoid probate, while certain irrevocable trusts may offer protection if you’re planning well in advance of needing long-term care. Titling assets properly and updating beneficiaries can help keep your estate and legacy planning intact, even when care needs arise unexpectedly.

Transfer-on-death (TOD) and beneficiary designations: Naming TOD beneficiaries on non-retirement accounts and keeping beneficiary designations current on retirement plans and insurance policies helps streamline asset transfers and bypass probate. These small but impactful updates help maintain your legacy goals without unnecessary legal hurdles.

By integrating long-term care considerations into your estate plan, you can reduce the emotional and financial burden on your loved ones and help preserve your assets for the next generation.

Consider Seeking Guidance From Bulman’s Financial Advisors in California

Long-term care planning is complex, but you don’t have to figure it out alone. A seasoned financial advisor in California, like those at Bulman Wealth Group, can help you review options and guide you through the decisions that fit your unique situation.

The Bulman Wealth Group brings decades of experience in wealth management and legacy planning, helping Californians prepare not just financially but holistically. Whether you’re starting a care strategy from scratch or adjusting an existing plan, our team works to integrate long-term care with your income, investments, tax planning, and legacy goals.

From our Roseville, CA, financial advisor team to our financial advisor Temecula professionals, we offer insight that reflects California’s diverse communities and retirement challenges.

Building the financial confidence California retirees need starts with open, informed conversations—especially on difficult topics.

Let’s talk about how we can help. Reach out to us today to start the conversation.