Long-Term Care: Costs, Insurance, and Retirement Strategies
May 7, 2026
Long-Term Care Planning
Most people would rather not dwell on the possibility of needing long-term care. Still, the statistics are hard to ignore. For Americans turning 65 today, there is roughly a 70% likelihood they’ll require some form of assistance later in life—whether that’s help with basic daily activities like bathing, dressing, or eating.
On average, individuals who need long-term care use services for about three years. That makes these expenses a meaningful risk to any retirement plan. Beyond the financial strain, a long-term care event can also take a physical and emotional toll on both you and those who step in to help. Planning ahead can ease that burden and provide more clarity for everyone involved.
Understanding your choices
In prior generations, families often provided care at home. Today, professional care is far more common, starting with in-home support and potentially progressing to assisted living or full-time nursing care as needs increase. As the level of care rises, so do the costs.
This raises a key decision: should you use your own assets to pay these costs? Or should you shift some risk with insurance?
Paying out of pocket offers flexibility but exposes your savings. Insurance needs an upfront commitment, but it can help cover large future costs. This matters most when you may handle big expenses less easily.
The cost reality
Long-term care is expensive, and understanding the potential price tag is essential when building a plan. Recent national median annual costs (2025 estimates) illustrate the range:
● In-home care: about $80,000
● Adult day care: roughly $34,600
● Assisted living: around $74,400
● Nursing home care: $115,000 to $129,000 depending on room type
Costs vary by location and are likely to increase over time, which makes early planning even more important.
Ways to pay for care
Government programs:
Programs like Medicaid and veterans’ benefits can help, but eligibility is limited. Medicaid, in particular, is designed for individuals with restricted income and assets, and it may limit care options. Medicare generally does not cover long-term care beyond short-term needs.
Traditional long-term care insurance:
These policies allow you to select benefit levels, duration, and waiting periods. However, they often require ongoing premiums and may be subject to future increases. Availability has also declined in recent years.
Hybrid solutions:
Hybrid products combine long-term care coverage with life insurance or annuities. These structures can provide benefits whether or not care is ultimately needed—either through a death benefit or access to funds for care expenses. They can be more efficient for those who want to avoid the “use it or lose it” nature of traditional policies.
Personal savings:
Self-funding offers maximum control, but it requires a strong financial foundation. Large, unexpected care costs can disrupt even strong retirement plans. They may also reduce the legacy you plan to leave.
Key planning considerations
When to plan:
Many people evaluate long-term care options in their 50s or early 60s. At that stage, premiums are generally lower, and health issues are less likely to interfere with eligibility.
When benefits begin:
Most policies activate when you’re unable to perform at least two activities of daily living independently. Many also include a waiting (or elimination) period before benefits start.
How much coverage is appropriate:
Coverage decisions typically center on a daily or monthly benefit amount and the length of time benefits will last. Striking a balance is critical—overinsuring can strain your budget, while underinsuring may leave gaps.
Keeping pace with inflation:
Care costs tend to rise over time, so inflation protection can help preserve the value of your coverage.
Personal factors:
Your marital status, family health history, and available support system all play a role. A single individual may plan differently than a couple, and a family history of chronic illness could increase the likelihood of needing care.
Bringing it all together
Long-term care planning is ultimately about managing uncertainty. It requires balancing affordability, risk tolerance, and the type of care you want later in life.
While no plan is perfect, it helps to have a strategy. It can protect your finances. It can reduce stress for your loved ones. It can also help you feel more confident about retirement.
Sources:
https://www.fidelity.com/viewpoints/personal-finance/long-term-care-costs-options
Disclosure:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.