How should I plan for long-term care costs in retirement?

Long-term care – help with daily activities at home, in assisted living, or in a nursing home – is one of the biggest wild cards in retirement, since a private nursing-home room can run six figures a year and Medicare generally doesn't cover extended custodial care. You have three broad options. Self-fund by earmarking a portion of your portfolio (often viewed as the late-life upturn in the spending 'smile'). Buy long-term care insurance or a hybrid life-insurance/LTC policy, ideally in your late 50s or early 60s when it's more affordable and you can still qualify. Or rely on Medicaid as a last resort, which requires spending down most assets. Many people blend self-funding for shorter needs with insurance for catastrophic ones. Decide your approach before your 60s, since waiting raises both cost and the odds of being declined.