Long-term care is expensive and varies widely by setting and region. Based on Genworth's Cost of Care Survey, national median costs run roughly $64,000 a year for assisted living, about $78,000 for a full-time home health aide, and near $117,000 for a private room in a nursing home. Because these costs have risen faster than general inflation for years, the figure that matters is the projected cost when you are likely to need care.
Why the future cost is the number that matters
Most people underestimate long-term care because they anchor on today's prices. But if you are planning in your 50s or 60s, you are unlikely to need care for another 15 to 25 years, and costs have historically risen faster than general inflation over that horizon. A cost that looks like $110,000 a year today can project to well over $200,000 a year by the time care actually begins.
Three factors drive the size of the bill: the setting (in-home care, assisted living, or a nursing home), the region (high-cost metros run far above the national median), and the duration (care averages about three years, but dementia cases often run much longer). A plan that accounts for all three, rather than a single headline figure, is the one that holds up.
Knowing the projected number is the starting point. The next question is how to fund it, whether through your own assets, hybrid life insurance with a long-term care rider, an annuity with a long-term care benefit, or traditional long-term care insurance. Each carries its own tradeoffs, and the right mix depends on your health, assets, and priorities.
Is this a fit for you?
Who This Is For
- You are in your 50s or 60s and have not yet earmarked assets or coverage for care
- You want to understand what care actually costs before deciding how to fund it
- You have a family history of Alzheimer's, dementia, or extended care needs
- You are building a retirement-income plan and need to account for a possible care event
- You want to protect a surviving spouse from a care event draining shared assets
Who This Is Not For
- You already have a funded, coordinated long-term care plan in place
- You have confirmed coverage sized to projected costs in your area
- You are looking for an exact quote for a specific policy, which requires underwriting
- You need care today and want immediate placement guidance rather than planning
How do the options compare?
| Care setting | Approx. monthly | Approx. annual |
|---|---|---|
| Adult day health care | ~$2,100 | ~$25,000 |
| Assisted living facility | ~$5,400 | ~$64,000 |
| Homemaker services (in-home) | ~$6,300 | ~$75,500 |
| Home health aide (in-home) | ~$6,500 | ~$78,000 |
| Nursing home, semi-private room | ~$8,700 | ~$104,000 |
| Nursing home, private room | ~$9,700 | ~$117,000 |
National medians from Genworth's Cost of Care Survey, rounded. Actual costs vary widely by state and metro area and have generally risen faster than the overall inflation rate. Check current figures for your area.
What are the risks, costs, and alternatives?
Costs rise faster than general inflation
For most settings, care costs have climbed faster than the broad inflation rate for years. A cost that looks manageable today can be dramatically higher by the time you need care. Any honest plan projects the future cost, not just the current one, which is why the calculator below lets you apply a care-cost inflation rate of 3 to 6 percent.
National medians hide large regional differences
The figures above are national medians. Costs in high-cost metros and coastal states can run well above them, while some regions run below. Plan with numbers for the area where you expect to receive care, which may not be where you live today.
Medicare does not cover most long-term care
Medicare pays only for short, skilled care after a qualifying hospital stay. The ongoing custodial care that makes up most long-term care is not covered. Without a plan, those costs come out of your own assets until, if ever, you spend down enough to qualify for Medicaid.
Self-insuring is possible, but a long event can strain even large portfolios
Households with substantial liquid assets can choose to self-insure. Even so, a multi-year event, a two-person care need, or a long cognitive-decline case can exceed $500,000 and force the sale of assets at a bad time. Transferring part of that risk to an insurer is designed to protect the rest of the plan. Alternatives to explore include hybrid life insurance with a long-term care rider, annuities with a long-term care benefit, and traditional long-term care insurance.
What does this look like in practice?
Projecting the Cost That Actually Matters
Illustrative example: not an actual client.
Margaret Ashworth, 60, planning ahead. A private nursing-home room in her area costs about $110,000 a year today. She does not expect to need care until around 80, so the relevant number is the cost 20 years out, not today's.
Growing $110,000 at a 4 percent care-cost inflation rate for 20 years produces a projected cost of roughly $241,000 a year. For a three-year care event, that is about $720,000 in total, before any coverage or earmarked assets are applied. The size of that number, two decades early, is exactly why planning now is cheaper than reacting later.
You can run these figures for your own age, area, and assumptions with our long-term care funding calculator.
Illustrative projection for educational purposes. Actual costs, inflation, and duration vary widely by person and location.
Common Questions
How much does long-term care cost per year?
National median costs, per Genworth's Cost of Care Survey, run roughly $64,000 a year for assisted living, about $78,000 for a full-time home health aide, and near $117,000 for a private room in a nursing home. Costs vary widely by state and metro area, and a private-pay care event that lasts several years can exceed $500,000.
Does Medicare pay for long-term care?
No. Medicare covers only short, skilled care after a hospital stay, not the ongoing custodial care (help with bathing, dressing, and daily activities) that most long-term care involves. Those costs fall to you, to long-term care insurance, or, after assets are spent down, to Medicaid.
How fast are long-term care costs rising?
For most care settings, costs have risen faster than general inflation for years. That is why the figure that matters for planning is not today's cost, but the projected cost when you are likely to need care, often 15 to 25 years out for someone planning in their 50s or 60s.
How much should I set aside for long-term care?
A reasonable planning estimate is the projected annual cost in your area, grown for inflation to the age care may begin, multiplied by an expected duration of care (about three years on average, longer for women and for cognitive decline). Our long-term care funding calculator does this math for you and shows the resulting gap.
Related Questions
See What Care Could Cost in Your Plan
We project your likely cost of care and show the funding options side by side, so you can decide with real numbers instead of guesses.
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