Long-term care insurance could be an unnecessary part of your retirement planning if you can afford to maintain two households. But it takes a lot of retirement savings and it’s calculated this way:

The cost of nursing-home care in Arizona is estimated to be about $5,600 to $6.900 a month and in 10 years, $9,200 to $11.200 a month, depending on where you live. The bill will be slightly less in the first year because there may be 100 days of compensation from Medicare if the patient has been hospitalized before being moved to the home. After that, Medicare pays nothing unless here is further hospitalization.

To pay this kind of bill every month, a couple needs at least $2.5 million in investments so they can pull 4 percent – $100,000 annually. The spouse who is not in the nursing home will need to rely primarily on other income like Social Security and pensions.

If it is just a single person, a $1 million savings investment is probably sufficient, especially if the person living in the nursing home also has a home that can be sold.

You might ask, why not use the principal? The answer is, you could, but you’d be shittling away at your ability to pay, beting that you and your spouse’s demise will come before the end of the money. You’ll also be leaving the surviving spouse in a precarious position, if he needs nursing-home care later.

One thing long-term care insurance does is help insure that heirs will get some money. If you have no heirs or don’t care whether you leave anything behind, preserving principal may be retirement planning that is unimportant to you. After all, the single or the half of the couple who lives the longest can always spend down to the last $2,000 and then rely on Medicaid. It isn’t always a pretty solution, but it can work. However, just recently announced by a reliable insurance company, there is now available what is called a Medicaid Annuity product. Find out more.

If children are concerned about their parents’ reluctance to spend money on long-term care insurance one recommendation is that they step up and pay the premiums. Divided among two or three siblings, the bill may not seem so hefty. It’s not only a gesture that could make mon and dad feel more secure in their retirement, it also greatly increases the likelihood that there will be something left at the end for the children.