As you get older, are you ready for the possibility that you’ll need to pay for long-term care? Whether it’s a skilled nursing facility, assisted-living, or in-home help, the price tags can be high.

Consider these figures, on average:

Annual national median cost:

for assisted living¹

for private room in a nursing home¹

While you may be saving steadily for retirement, now is the time to make sure you’re also prepared for these potential expenses. “The sooner you start planning for long-term care, generally speaking, the more choices you’ll have,” says Kevin Hansen, a financial professional and retirement income consultant for Principal®. “And having a plan in place may reduce any stress that a long-term care event might put on family members and loved ones.”

So, what are your options?

1. Medicaid coverage of nursing home costs and long-term care

Medicaid is a federal program, administered by each state, that helps pay medical expenses and long-term care costs for people with low income and few assets. While Medicaid may pay for nursing home costs, there are strict financial rules for your Medicaid coverage to kick in. That often means spending down all your assets first. Think of it like an insurance premium, but the premium may be your life savings and all you own.

Medicaid can suffice, Hansen says, “if your financial planning goal when you pass away is to have your last check bounce.”

“But if you want to leave a legacy to your family or a charity, that’s when you need to start considering other long-term care insurance options,” Hansen says.

2. Traditional long-term care insurance

This is an insurance policy that helps pay some of the expenses associated with nursing homes and long-term care that aren’t covered by health insurance. Like other insurance policies, you’ll select the amount of coverage you want and pay premiums. When you need coverage, there’s typically a period of a few months before the insurance company will begin reimbursing you for expenses.

“There’s some certainty around these types of policies. You know what you’re getting and what your cost of living would be each year,” Hansen says.

But you can’t wait until you need care to get coverage. These policies tend to become costly as you get older, so buying early is ideal, if that’s an option for you.

3. Other insurance and guaranteed income options

Some life insurance policies may allow you to borrow against the policy or withdraw benefits early in certain cases to help pay for long-term care.

Income annuities are another option. You pay a lump sum up front to an insurance company, and, in return, it pays you a guaranteed annual income. Besides providing regular income in retirement, some annuities have special contract terms designed specifically to help cover the costs of long-term care.

The plus side of these hybrid options, according to Hansen: If you don’t require long-term care, you aren’t out any money; your beneficiaries get what remains.

On the other hand, if you’re in a nursing home for an extended period, you may fall short on coverage.

4. Self-funding nursing home expenses

Self-funding is exactly what it sounds like. This approach requires a lot of time, a lot of assets, or both. And there’s a risk of exhausting your retirement savings. But if you can afford it, this option gives you more control over your long-term care options.

It might mean tapping into your savings, investment, or retirement accounts for long-term care expenses. For instance, you could use a Roth IRA (individual retirement account). These retirement accounts allow you to put in after-tax money and make qualified withdrawals tax free later in life. Unlike a 401(k) or traditional IRA, you’re not required to withdraw a minimum amount of money at any specific age, so you could leave the funds in the account until you potentially need them to cover these costs.