Don't let this huge expense derail your retirement plan. Photo: Louise Docker via Flickr.

At least 70% of people over the age of 65 will need long-term care in their lifetime, according to the U.S. Department of Health and Human Services. 

Just let that sink in for a moment. Even if you're in great health now, odds are you'll need long-term care at some point. Have you planned for it? You should, because it could be one of the biggest threats facing your retirement.

The cost of long-term care
Long-term care is far more expensive than many people realize. According to Genworth Financial, in California, the average cost for a day healthcare facility is about $20,000 per year, while a home health aide costs an average of $53,000 and the average private nursing-home room costs over $100,000 annually. (Use Genworth's online map to find data for your state.)

In other words, if you or your spouse should suddenly need long-term care, you'll be facing additional expenses that could outstrip what most Americans earn in a year. That's on top of your usual living expenses. The cost can become completely unmanageable before you even know what's happened.

Consider insurance
If you don't have a significant asset base, you should consider long-term care insurance, especially given that health insurance plans generally cover limited types and dollar amounts of long-term care. For example, most health insurance will only cover up to 100 days of skilled nursing that follows a recent hospitalization for a related condition. That means you're on the hook for the rest.

From this perspective, long-term care insurance starts to look really attractive, especially considering that seven out of 10 Americans could make use of it.

If you're thinking of buying a policy, then don't delay. The older you get, the more expensive you are to insure, therefore stalling defeats the purpose of the insurance. And if your health takes a turn for the worst, you may be ineligible for coverage. In fact, 45% of long-term care insurance applicants are denied coverage. That number rises to 66% for those 80 and over. So, even though it's an extra cost now, getting a policy while you're relatively young and healthy could pay huge dividends later on when you really need it. 

Another benefit of buying a long-term care policy is that it makes you eligible for tax deductions. These tax breaks won't eliminate the cost, but they certainly make a decade or two of insurance premiums less painful.

Long-term care can quickly eat up retirement savings. Take the time to plan for it so that if the need arises, you won't be scrambling for a solution. Depending on your situation, insurance could well be the ticket.