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Working Paper
Optimizing Retirement Financial Strategies: Integrating Annuities, Defined Contribution Plans, and Long-Term Care Costs
Nursing home costs in the United States now exceed $100,000 per year, and government assistance programs such as Medicaid help out only when retirees are largely destitute. Moreover, health shocks driving the need for such care can arise suddenly in old age, are frequently permanent in nature, and can be associated with declining mental and physical abilities. These facts raise the important question of how households can best prepare to finance this final phase of life. Building on past research, we determine how retirees should manage payouts from defined contribution plans to balance ...