Briefing From Bruce – November 2026
Many people spend decades building wealth yet overlook one of the largest potential expenses in retirement: long-term care.
A prolonged care need can quickly erode savings, potentially force portfolio withdrawals during unfavorable market conditions, and reduce the assets ultimately passed to heirs.
Not everyone will require extensive long-term care, but the possibility is large enough that it deserves consideration within a comprehensive retirement plan.
According to Fidelity, “Someone turning 65 today has almost a 70% chance of needing some type of long-term care in their remaining years to assist with performing everyday tasks like eating or bathing.”
Nearly half will receive some type of paid care over their life.
What is long-term care?
The National Institute on Aging defines long-term care as care that “involves a variety of services designed to meet a person’s health or personal care needs when they can no longer perform everyday activities on their own.”
In many cases, long-term care is provided at home by informal caregivers, which might include family members, friends, and neighbors.
Most home-based care focuses on personal assistance with everyday tasks, commonly known as activities of daily living (ADLs).
These might include taking medication, dressing, bathing, and providing supervision to help ensure an individual’s safety and well-being.
How much can long-term care cost?
According to Fidelity, the national median cost last year for in-home caregiving was $80,000. Adult day health care ran just under $35,000, while an assisted living facility cost about $75,000 per year.
If a nursing home is required, expect to pay roughly $115,000 to $130,000 a year, depending on whether it’s a semi-private or private room.
For many, that’s a hefty bill. Medicare helps pay for what’s called skilled nursing facility care, up to 100 days for each benefit period if you meet their criteria.
What is a skilled nursing facility? Generally speaking, it is a specialized healthcare center that provides 24-hour licensed medical care and short-term rehabilitation services for patients recovering from a hospital stay, surgery, serious illness, or injury.
Think of a skilled nursing facility as a bridge between the hospital and home, offering licensed medical care along with rehabilitation services to help patients regain strength and independence after a hospital stay, an illness, or an injury.
That’s in contrast to long-term care, which involves assistance with daily living activities.
Medicare doesn’t cover long-term care costs.
Paying for long-term care
This can be one of the biggest financial challenges families face. Below are several strategies you may want to consider. Before we jump in, we want to caution that this is intended as a high-level overview, not a one-size-fits-all solution.
Before making any decisions, let’s have a conversation about your goals, financial situation, and preferences. Together, we can explore these options in greater detail and determine whether one approach, or a combination, may be the best fit for your needs.
Do you have a Health Savings Account (HSA)? These funds may be the best place to start because withdrawals are tax-free for qualified medical expenses, and long-term care typically qualifies.
A taxable brokerage account or IRA can also help cover long-term care expenses. In some cases, those costs may qualify for a medical expense deduction if you itemize and to the extent these expenses exceed 7.5% of your adjusted gross income for the year.
Just be aware that if medical care isn’t the principal reason for being in the nursing home, the deduction is limited to the part of the cost that’s for medical care.
Keep in mind that withdrawals from a traditional IRA are subject to ordinary income tax, while selling highly appreciated investments in a brokerage account may trigger long-term capital gains tax.
Have you considered a reverse mortgage? A reverse mortgage allows homeowners who are 62 years or older to receive a lump sum or monthly payments based on the equity in their home without having to make monthly payments.
The funds can be used for a variety of expenses, including elder and long-term care. This can be especially helpful for individuals who plan to receive care in their own homes.
However, it’s important to understand the occupancy requirements.
If the homeowner moves out of the residence for more than 12 consecutive months, the home may no longer qualify as the borrower’s primary residence, triggering repayment of the reverse mortgage.
Another option to consider is a home equity loan. Your house may be a substantial source of equity, but unlike a reverse mortgage, monthly loan payments are required. When the proceeds are used for elder care, interest is not tax deductible.
Medicare doesn’t cover long-term nursing homes, and therefore, Medicaid may be an option. Medicaid provides free or very low-cost medical coverage to those with limited financial resources. Because Medicaid is administered at the state level, eligibility requirements and covered services can vary significantly from one state to another.
In general, eligibility is based on income and assets, and thresholds and requirements differ by state. But be aware that most states have what’s called a look-back period of five years. It can be complex, but giving away assets during that period can trigger a penalty or denial of Medicaid coverage for long-term care.
Hybrid insurance combines multiple types of coverage into a single policy, often pairing long-term care benefits with life insurance.
One common concern people have is, “What happens if I buy long-term care insurance and never use it?” With traditional long-term care coverage, the premiums paid may never result in a benefit.
But a hybrid policy can help address that specific concern by allowing a death benefit much like a traditional life insurance policy. If you do need long-term care, you can access the policy’s benefits to help cover those expenses, though it would typically reduce the death benefit to your heirs.
While the concept sounds straightforward, there are a number of options to consider, and a 1035 exchange is complex and governed by strict IRS rules.
Not all insurance providers accept 1035 exchanges, and you may pay a surrender charge if your current policy is still in its surrender period, but a thumbnail sketch: a 1035 exchange allows you to transfer the value of an existing life insurance policy into a qualifying long-term care or hybrid policy without triggering a taxable event on gains.
In summary, few want to contemplate the potential of needing long-term care, but tackling possible issues in advance can make a significant difference for both you and your loved ones.
While there’s no one-size-fits-all solution, understanding alternatives and creating a plan before care is needed can help protect your finances and provide greater confidence about the future.
Please reach out to us if you have additional questions or would like to discuss planning strategies.
The rate debate
In his opening remarks at the Federal Reserve Bank of Kansas City’s Economic Symposium in August, Fed Chair Kevin Warsh began with a humorous anecdote:
“[Event] planners have some recreation options lined up for later today. And I’d advise you to be very careful with your choices. As I learned years ago, you can take two different kinds of hikes [emphasis added] on the trails around Jackson Hole [Wyoming].
“I can sum up my hikes with former Vice Chairman Don Kohn in two words: I survived. These steely marathon death marches revealed a side of Don I wasn’t ready for,” he said.
“There’s another kind of hike, one I associate with Chairman Ben Bernanke, my old colleague. With Ben, it’s a much more leisurely pace, an easy stroll along the wandering trails at the Rockefeller Preserve.”
While his clever references to various “hikes” drew laughter from the audience, analysts were quick to note the possible double meaning, as the repeated use of the word “hike” was difficult to ignore, particularly given its close association with interest rate hikes.
Well, in mid-September, the Fed delivered its first rate ‘hike’ in over three years, a quarter-percentage point increase in the fed funds rate to a target of 3.75% to 4.00%.
The Fed passed on a rate increase at its October meeting, though Fed officials appear to be aiming for another quarter-point increase at the December meeting. After that the outlook gets a bit murkier.
Warsh is not known for offering interest rate forecasts, often referred to as forward guidance, and he tends to choose his words carefully. Perhaps that makes his opening remarks at Jackson Hole the clearest window into a forecast that investors are likely to receive.
With his comments in mind, should the Federal Reserve embark on a “steely marathon death march,” or is a “much more leisurely pace” the appropriate path?
Let’s look at some of the pros and cons.
Those who favor additional rate increases cite—
Those who want to take a go-slow approach or oppose additional rate increases believe—
A rapid series of rate hikes could expose vulnerabilities in other markets, creating dislocations that policymakers never intended to target or expose. In other words, the Fed breaks something because markets are unable to quickly adapt to an aggressive change in monetary policy.
| Key Index Returns | ||
| October 2026 % | YTD % | |
| Dow Jones Industrial Average | 1.7 | 7.7 |
| Nasdaq Composite | -5.3 | 9.4 |
| S&P 500 Index | -0.9 | 10.7 |
| Russell 2000 Index | 0.5 | 13.3 |
| MSCI World ex-USA** | -0.3 | 7.7 |
| MSCI Emerging Markets** | -8.1 | 11.6 |
| Bloomberg US Agg Total Return | 2.4 | -0.5 |
Source: Wall Street Journal, MSCI.com, Bloomberg, MarketWatch
MTD returns: September 30, 2026—October 31, 2026
YTD returns: December 31, 2025–October 31, 2026
**in US dollars
Fed policy has historically influenced market sentiment. Today is no exception. But other factors often come into play. Geopolitical uncertainty, when it arises, typically influences sentiment among short-term traders.
Investors are also carefully eyeing the AI buildout. Demand for AI is growing rapidly, and firms are struggling to keep up.
But others fret over the possibility that enormous capital outlays flowing into AI infrastructure might not generate returns high enough to justify the investment.
AI is clearly a transformative technology, much like the railroads in the 19th century and the Internet in the late 1990s.
Further, history suggests that revolutionary technologies often create enormous economic benefits. But fierce competition and excess investment can sometimes make it difficult for investors to earn the returns they initially expected.
I trust you found this review insightful. If you have any questions or would like to talk through your portfolio or other financial goals, please don’t hesitate to reach out to me or anyone on our team.
