I’m 60 and have been diagnosed with a terminal illness that will require constant costly care. How can I set up my retirement accounts to pay for it?

This happened to Dawn. At 60, she was diagnosed with amyotrophic lateral sclerosis (ALS). Dawn had planned to work at least until 65, but her diagnosis means that she may only be able to work another two to three years.

Dawn and her husband have $800,000 in retirement savings, and she makes $120,000 per year. Now that she’s going to have to leave her job sooner and lose her last few years of retirement savings contributions, she’s wondering how to make her new reality work financially for her family.

Here’s a list of things Dawn and other people facing a life-changing illness and approaching retirement should consider to protect and maximize their finances.

Dawn’s scenario

Dawn’s short-term plan is to keep working as long as possible to save as much as she can. However, ALS is an unpredictable disease, and she may not have as much time as she hopes to keep adding to her nest egg.

When her disease progresses to the point of paralysis, she will need in-home care or will have to live in a care facility. Dawn and her husband have no children, and he will be the only one available to care for her.

Since they’ve decided that he should work as long as possible to continue to save for his own retirement, Dawn must factor in the cost of a personal care worker into her future budget.

When she stops working, Dawn should be eligible for Medicare and Social Security Disability Insurance (SSDI). Assuming Dawn is able to keep working until she reaches 62 years of age, she will also be able to take her Social Security retirement benefits early.

However, there is a caveat: if she accesses this benefit early, she’ll receive quite a bit less in monthly payments. Normally, it’s best to hold off claiming Social Security until 67 or, better yet, 70, although in Dawn’s case taking early withdrawals could make sense.

As her caregiver, her spouse may also qualify for benefits if he is older than 62. This is something the couple should look into, even if they opt for in-home caregiving services.

What Medicare and Medicaid provide

Because Dawn has ALS, she will get Medicare benefits as soon as she’s entitled to disability. Usually, beneficiaries are automatically enrolled in Medicare two years after the date they become entitled to disability, but this rule is waived for individuals with ALS.

Medicare benefits are subject to deductibles and premiums like private insurance, and cover the costs of hospital care as well as services provided by doctors and other health care practitioners, home-based services, durable medical equipment and some outpatient care services.

Dawn can also consider coverage through Medicare Advantage, where a private health insurer administers her plan. Medicare Advantage plans offer additional benefits not covered by regular, government administered Medicare, such as vision, hearing, dental and fitness programs as well as more ALS specific needs such as transportation to medical appointments, home health aides, caregiver support, and potentially coverage for prescription drugs.

Dawn may also be eligible for Medicare supplemental insurance, or Medigap coverage from private companies, but the rules and type of coverage available differ depending on the state.