Long-Term Care Planning Guide
Protect your retirement savings from the #1 threat: the cost of long-term care. Insurance, self-funding, and hybrid strategies explained.
Last Updated: October 2025
How much does long-term care cost?
Long-term care costs vary significantly by region, care setting, and provider. For 2025 national medians, see Genworth's most recent Cost of Care Survey at genworth.com/aging-and-you/finances/cost-of-care.html. The duration of needed care varies widely by individual; some published studies (e.g., HHS / ASPE long-term care research at aspe.hhs.gov) report average durations for those who need care. Total potential cost depends on duration, setting, and inflation.
What are the odds of needing long-term care?
The statistics are sobering: approximately 70% of people turning 65 today will need some form of long-term care during their lifetime. Yet only 7.5 million Americans have long-term care insurance.
Long-Term Care Costs by Type (2025 National Median)
| Type of Care | Monthly Cost | Annual Cost | 3-Year Total |
|---|---|---|---|
| Nursing Home (Private Room) | $9,733 | $116,800 | $350,400 |
| Nursing Home (Semi-Private) | $8,669 | $104,025 | $312,075 |
| Assisted Living Facility | $5,350 | $64,200 | $192,600 |
| Home Health Aide (Full-time) | $6,292 | $75,504 | $226,512 |
| Adult Day Care | $2,100 | $25,200 | $75,600 |
| Homemaker Services | $5,917 | $71,000 | $213,000 |
Source: Genworth Cost of Care Survey 2025. Costs vary significantly by state and metropolitan area.
What are the options for paying for long-term care?
Long-Term Care Funding Strategy Comparison
| Strategy | Pros | Cons | Best For |
|---|---|---|---|
| Traditional LTC Insurance | Dedicated coverage, tax benefits | Premiums can increase, use-it-or-lose-it | Ages 50-65, moderate assets |
| Hybrid Life/LTC Policy | Death benefit if LTC not needed | Higher initial cost, less LTC coverage | Those who want guaranteed benefit |
| Self-Funding | No premiums, full control | Requires $500K+ earmarked | High net worth individuals |
| Medicaid (last resort) | Covers nursing home care | Must spend down assets, limited choice | Low-asset individuals |
| Short-Term Care Insurance | Lower premiums, easier to qualify | Limited to 1 year of coverage | Bridge coverage or supplement |
The right strategy depends on your assets, health, family history, and risk tolerance.
"Long-term care planning is the most neglected area of financial planning, and it's the one most likely to devastate a retirement. I've seen couples with $2 million portfolios reduced to near-poverty after one spouse needed 5 years of nursing home care. The best time to plan is in your 50s, when you're healthy enough to qualify for coverage and premiums are more affordable."
Brett R. Henderson, CIMA, CPFA, CRPS
Fiduciary Financial Advisor, SWE90, CLU-certified long-term care planning specialist
Frequently Asked Questions
Does Medicare pay for long-term care?
No. Medicare only covers short-term skilled nursing care (up to 100 days) following a hospital stay. It does not cover custodial care; the type of long-term care most people need (help with bathing, dressing, eating, etc.).
When should I buy long-term care insurance?
The ideal age to purchase is between 55-65. Before 55, premiums are low but you're paying for years before you'd likely need care. After 65, premiums increase dramatically and health conditions may make you uninsurable. Many advisors recommend evaluating options around age 60.
What is a hybrid long-term care policy?
A hybrid policy combines life insurance with long-term care benefits. If you need LTC, the policy pays for care. If you don't, your beneficiaries receive a death benefit. This addresses the 'use-it-or-lose-it' concern of traditional LTC insurance. Popular options include Lincoln MoneyGuard and OneAmerica Asset Care.
Related Resources
Protect Your Retirement from Long-Term Care Costs
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