For retirees, health care costs are a huge unknown that can wipe out your finances quickly. While most retirees take advantage of Medicare, many don't realize that Medicare largely doesn't cover nursing-home care and other long-term care expenses.
In the following video from The Motley Fool's series on retirement investing, sponsored by TD Ameritrade, Fool consumer finance expert Dayana Yochim talks to Dan Caplinger, the Fool's director of investment planning, about how long-term care insurance works and how it can help you avoid costly expenses in retirement. Dan notes that Medicare only covers skilled-nursing facilities for a limited time, leaving you on the hook for extended stays and ongoing care needs. But long-term care insurance can kick in to cover those expenses. Dan goes through some common terms of long-term care insurance and points out some of the pitfalls involved with coverage. But it's wise to at least consider long-term care insurance, as it can help many people preserve their assets more effectively in retirement.
