Are you prepared to dole out a significant portion of your retirement assets or your parents’ retirement assets to fund skilled nursing care?

As the elderly population continues to grow between now and 2050, we’ll be seeing 1 in 5 Americans being elderly and the majority living alone. Living longer means the potential of longer periods of debilitating illness and more unfunded healthcare costs, for both routine and long-term care.

Americans are quick to acquire auto insurance, homeowners, life, health, even pet insurance. Not so with long-term-care insurance where we see less than 5 percent insured for the catastrophic costs of long-term care, which IS NOT covered under Medicare as many think.

As a baby boomer myself, I never thought about long-term care for myself, much less my mother who lived to 93. I was the sole financial provider for my mother’s lifestyle since my father passed away in his early sixties. She spent what savings they had as my parents had not planned for unexpected life events.

At age 86 my mother had major heart surgery and until her death, my out-of-pocket costs for her skilled-nursing care that WAS NOT paid by her Medicare and Medicare supplement plan were $260,000. That came out of my retirement assets.

Are you prepared? This was my wake-up call and as I create retirement lifestyle plans for individuals and families, I urge those I serve to consider the biggest risk to their estate.

We’ve heard in all the propaganda about retirement that the biggest risks to a successful, dignified retirement are inflation, taxes and market volatility. Not so! It’s the depletion of your hard-earned assets – those funds you’ve spent 30-40 years saving for a joyful retirement and poof – they could be gone like $260,000 of mine. I’d like to offer you some strategies that could help you decide how to protect your own estate, and your parents’ estate from the devastating costs of long term care expenses.

First, create a “what if” scenario to see what would happen if you or your spouse, partner, or significant other needed long-term care. This is what I call the “moment of truth.” Long-term-care costs are inflating over 4 percent per year and today’s national average is a bit over $90,000 annually. Are you prepared for the costs in 15, 20, 25-plus years?

Once you understand the impact to your estate at a financial level, then you can begin evaluating the numerous ways to fund for long-term care. Those include: self-funding, traditional long-term care, hybrid life insurance with long-term-care protection, innovative annuity solutions, or relocating to Continuing Care Retirement Communities. What’s appropriate for you is based on your life goals, the needs of your surviving spouse/partner/children, what you desire to leave behind (if anything), the quality of care you desire, whether you want to age in place or not.

You need customized solutions for your long-term-care protection needs – no one-size-fits-all answer for this component of your plan.

And don’t forget your parents. The baby boomers are not only having to deal with long-term care protection for themselves, but also for their parents. I chose to take care of my mother and have her age in place and that was our plan and I knew the costs upfront so I planned for that.

If you choose aging in place, home modifications could be required to accomplish this so these costs must be considered. When it comes to your parents, why not pay for their long-term-care policies so you can protect their assets and be the ultimate beneficiary? Better you get the assets than the nursing home.

I have a client who was widowed and shared with me her story. She mentioned that her mother was a widow and cared for her father until he passed away. My client and her siblings saw the stress, wear and tear it had on her mother and they decided as a family that they will buy a long-term-care policy and pay the premiums for their mother’s care so their mother will have quality skilled-nursing care should she need it. So the three children split the cost of their mother’s long-term-care policy.

Isn’t this an amazing way to take the worry out of their mother’s life because one thing she wanted – she did not want to be a burden on her kids. They took this worry away by obtaining a traditional long-term-care policy and they can be assured of two outcomes: their mother has achieved her goal of not becoming a burden on her children; and second, the assets of their mother’s estate can be protected and they will be the beneficiaries of the estate assets.

Whatever your unique situation is for you or your parents, the dialogue about how to fund long-term care begs the need for consideration in any estate and retirement planning. It’s more than investing and buying financial products – it’s about planning to achieve life goals when it comes to how to plan for our very senior years.

Jeannette Bajalia, author of "Retirement Done Right" and "Wi$e Up, Women," is president and principal adviser of Petros Estate & Retirement Planning, where she has designed and implemented innovative estate-planning solutions for clients and their families. She also is founder and president of Woman’s Worth®, which specializes in the unique needs facing women as they plan for their retirement.