Planning for the Cost That Wipes Out Retirement Savings

Last updated July 2, 2026

Long-term care. the assistance needed for basic daily activities like bathing, dressing, and eating due to age, illness, or cognitive decline. is the retirement expense most people do not plan for and cannot afford to ignore. The 2026 median annual cost for a private room in a nursing home is $108,405. Assisted living facilities average $64,200 per year. Home health aide services average $61,776 annually for 44 hours of care per week. The average duration of long-term care need is 2.5 years, though 20 percent of people who require care need it for more than five years. At these costs, even a relatively short care period can consume most of a modest retirement portfolio.

Medicare provides very limited long-term care coverage. it covers skilled nursing facility care for up to 100 days following a qualifying hospital stay, but not custodial care, which is the ongoing assistance most people actually need. Medicaid covers long-term care, but only for those who have spent down their assets to qualifying thresholds, typically $2,000 in countable assets for a single individual. Traditional long-term care insurance premiums have increased significantly over the past decade as insurers recalibrated assumptions. Hybrid life/LTC policies offer a death benefit alongside LTC coverage and have become the more stable-priced option. The ideal window to apply for LTC insurance is ages 55 to 65. premiums are still affordable, and most applicants can still qualify medically.

Long-term care planning belongs in every retirement conversation. For couples, the risk is particularly acute: a spouse who needs care can deplete the joint portfolio needed to support the surviving partner. Evaluate hybrid life/LTC policies, self-insurance through dedicated savings, or traditional LTC insurance based on your assets, health, and family history. The cost of not planning is nearly always higher than the cost of coverage.