Long-term care is a bigger problem for women since they live longer, and they are more likely to need it. Also, since women are likely to outlive their husbands, they will be left without anyone to help them as their needs increase. The American Association for Long-Term Care Insurance reports that 70% of nursing home residents are women. When I plan for married couples, I will plan for the wife to need more expensive care for longer, unless family history tells us to do otherwise. 

Costs of Long-Term Care

There are several levels of care and a wide range of costs. The costs also vary based on where you live. I am going to stick with national averages for now, but generally, if you’re in a higher cost-of-living area, you can expect to pay more. *Costs are provided by the Genworth Cost of Care Survey

In-Home Care: This is when the senior remains in their home and receives professional assistance. This is more cost-effective than assisted living if they need less than 40 hours of care per week. There are two different levels of care- non-medical and skilled. These services are billed hourly, which offers flexibility but can also lead to unexpected increases as needs grow. 

The national median costs for in-home care are $35/hour for non-medical caregivers and $90/hour for skilled nursing care. There will likely be a need for a mix of both. 

Assisted Living: These are facilities that offer residents around-the-clock staff availability and assistance with activities of daily living. The base monthly rent includes housing, meals, utilities, and basic care. There may be additional charges for higher levels of care if needed. 

The national median assisted living cost in 2025 is $6,200/month. We always plan for at least some decrease in current lifestyle expenses if assisted living is required because the facility fees cover so many expenses you would otherwise have.

Nursing Home:  These facilities provide even more care than an assisted living facility. There will be skilled nursing care 24 hours a day. The costs include personal care, room & board, supervision, medications, and rehabilitation therapies. Similar to assisted living, and likely to a greater extent, lifestyle expenses that occurred before entering the nursing home will decrease.

The national median cost of nursing home care in 2025 ranged from $9,500 to $ 10,800 per month.

Length of Care: The average length of LTC is 2.2 - 3.7 years. Since there are levels of care, that does not necessarily mean you will be at the highest level the entire time. Only 20% of people will need it for 5 years or longer. Folks who are married need less time in care, and men have a shorter stay than women on average. 

What Doesn’t Pay for Long-Term Care

There are common misconceptions about how LTC expenses can be paid for. These sources will not fund LTC: 

Medicare covers only short-term rehabilitative care for up to 100 days and does not cover help with activities of daily living. 

Medicaid will cover it, but it is difficult to qualify and is intended as a safety net, not a plan to pay for care. You must have extremely low levels of assets and income, and there are policies in place, like 5-year lookback periods, that prevent people from gifting away all their assets to qualify. 

Health insurance generally will not cover LTC, including Medigap policies. 

Funding Strategies

There are two ways to pay for LTC costs. You can self-fund or purchase insurance. There are multiple ways to achieve both strategies. 

Self-Funding – The simplest way to self-fund is with your investment portfolio. This involves planning for expenses at the beginning of retirement so that you are careful not to spend too much early on, in case you, your spouse, or both of you need LTC. If there are pensions and Social Security, there may be enough stable monthly income to support long-term care costs.

Selling your primary residence is a good way to pay for LTC, especially for someone who is single or for the second spouse to pass. If assisted living or nursing home care is needed, the home will be unoccupied, so selling it will free up cash and reduce expenses. 

Other less common options include reverse mortgages and Health Savings Accounts (HSAs). The use of HSAs may become more common in the future, but currently, we don’t see many folks in retirement with significant HSAs. It is likely they will be spent before LTC is needed. 

Insurance – Long-term care insurance is harder to find than it used to be. Many carriers stopped offering it because the costs of LTC grew faster than they expected, and they lost money on those policies. Policies are expensive, with average premiums ranging from $1,000-$4,000/ year for someone age 55. Coverage for a 75-year-old female can be as high as $9,700/year.  A common issue we see with insurance is that, as people age, they want to or must drop their coverage because the premium increases are so large. 

A second option to straight LTC insurance is to purchase a whole life insurance policy with a LTC rider. This can reduce costs, and if LTC isn’t needed, heirs will still receive the death benefit. These riders are not typically as expensive as a full LTC policy. 

It’s essential to have LTC included in your retirement plan. We can help you weigh the pros and cons of different options to pay for it if the need arises and give you guidance on what makes the most sense for your situation based on family history, income, and assets. If you would like to discuss your unique situation, please contact us!