Being financially responsible means paying your bills, budgeting and saving for retirement. A healthy individual may be able to live on $30,000 a year if they have paid off their mortgage. But what happens if you’re not healthy?

Did you know that 48% of people over 65 will need long-term care of up to 12 months?

Long-term care is not cheap, and you can spend well over $100,000 per year on a private nursing home room.

Men will, on average, need 2.2 years of assistance, while women will need 3.7 years. Assistance is different from living in a nursing home, and it will include different tasks, such as bathing and eating.

Keep in mind that the average person has just $126,000 in retirement. Anyone that has to stay in a nursing home will deplete their retirement in under two years.

If you need long-term care, here’s what to expect:

Private Health Insurance and Medicare Won’t Help

If you were hoping that your private insurance would help cover your costs, they will not. Medicare also doesn’t cover these costs, which they consider “custodial.” If you do have some money saved, you will be expected to use that money to pay off your medical bills.

Only after you have exhausted all of your savings will Medicaid offer their assistance.

Medicaid, a government program, will pay for around half of your custodial and nursing home care – you’re still on the hook for over $50,000.

Long-term Care Insurance is an Option

Long-term care insurance is an option, and it’s one of the key ways to be able to reduce your daily care costs. If you need care, insurance will cover most of the costs. This is a great option that allows a person to go into the latter years of life without worrying about leaving their loved ones with insurmountable care bills.

The insurance premiums are going to cost $200 to $300 for a couple in their 50s, and premiums will be more expensive with each passing year.

If you don’t want to rely on insurance, consider that nursing home rooms cost $7,513 to $8,517 per month. Hiring a home health aide or homemaker service will cost $4,300 to $4,400 or more a month.

Sure, you can go into an assisted living facility that charges $4,000 a month, but that’s still almost $50,000 a year in expenses. Family members can opt to take care of you, but when they need to take a break, you’ll pay around $20 an hour for a health aide.

A lot of people are forced to sell their homes to pay for their care. If a person is in their last year or two of life, they may be able to pay for their care. If a person may live longer, selling off their home or taking equity out of the home may result in the person being unable to pay their bills if they regain their ability to care for themselves.

Costs are rising annually, as there are fewer qualified professionals, higher demand and more regulations that nursing homes have to follow. While the costs of long-term care are astronomical, insurance can help lower the burden.