Long-term Care Cost Calculator

The cost of long-term care varies dramatically based on the type of care required, your geographic location, and the level of service. Costs in major metropolitan areas are often significantly higher than the national median. This table provides a baseline for 2026 national median annual costs, which you can adjust in the calculator for your specific region.

Source: Genworth Cost of Care Survey data, projected to 2026.

These figures represent the starting point for your calculation. The most significant financial challenge isn't just a single year's cost but the total expense over the entire duration of care, which averages three years for many individuals. A three-year stay in a private nursing home room could easily exceed $350,000 in today's dollars—and much more in the future. You can use the assisted-living-cost-calculator or nursing-home-cost-calculator for a more detailed look at specific facility types.

Once you have an estimate of your potential LTC costs, the next question is how to pay for them. Relying on a single funding source can be risky. Most comprehensive plans involve a combination of the following strategies.

1. Self-Funding with Personal Savings

This strategy involves earmarking a portion of your retirement portfolio to cover potential LTC costs.

• Pros: Maximum flexibility and control over your assets. No need to pay insurance premiums.
• Cons: A long care event can decimate your savings, leaving little for a surviving spouse or heirs. It requires a substantial nest egg, often well over what is needed for a standard retirement. You'll need to decide how long will my money last under the added strain of care costs.
• Best for: Individuals with significant assets ($2M+) who can absorb a multi-year care cost without jeopardizing their financial stability.

2. Long-Term Care Insurance

LTC insurance is a specific type of policy designed to cover the costs of care. You pay premiums in exchange for a defined benefit if you need care later.

• Pros: Protects your retirement assets from being spent down on care. Provides a dedicated pool of funds.
• Cons: Premiums can be expensive and may increase over time. You may pay for a policy you never use.
• Best for: Those with moderate assets who want to protect their savings. A long-term care insurance calculator can help you weigh the costs and benefits. Hybrid policies that combine life insurance with an LTC rider are also a popular alternative.

3. Government Programs (Medicaid & VA)

Medicaid is the largest single payer of long-term care services in the U.S., but it's a safety net program with strict financial eligibility rules.

• Pros: Can cover 100% of nursing home costs for those who qualify.
• Cons: You must spend down nearly all of your assets to become eligible. Your choice of facilities may be limited to those that accept Medicaid. The Medicaid spend-down calculator can illustrate this difficult process.
• Best for: Individuals with very low income and assets. Veterans may also qualify for specific aid through the VA's long-term care benefit program.

4. Home Equity

For many retirees, home equity is their largest asset. A reverse mortgage or home equity line of credit (HELOC) can be used to fund in-home care, allowing you to age in place.

• Pros: Access to a large pool of capital without having to sell your home immediately.
• Cons: The loan balance grows over time, reducing the equity left to your heirs. It is a loan that must eventually be repaid, typically when the homeowner sells the house or passes away.
• Best for: Homeowners with significant equity who are determined to remain in their homes.

A crucial input in this calculator is the long-term care inflation rate. Historically, the cost of care services has risen much faster than the general rate of inflation (CPI). While general inflation might average 2.5-3%, LTC inflation has often been in the 4-5% range or higher.

This difference has a profound impact on future costs due to the power of compounding.

Consider this scenario: An individual is 65 years old today and projects they might need care at age 85. The current annual cost for an assisted living facility is $64,200.

• At a 3% general inflation rate, that cost would be $116,000 in 20 years.
• At a 5% LTC-specific inflation rate, that same cost would be $170,000 in 20 years.

That's a staggering $54,000 difference for a single year of care. Over a three-year care period, the gap widens to over $160,000. This is why using a dedicated, higher inflation rate for LTC planning is essential. The primary drivers of this high inflation are the rising cost of skilled labor, increased demand from an aging population, and advancing medical technology used in care facilities. Ignoring this factor can leave your retirement needs calculator projection dangerously short.

The calculator uses several core formulas to estimate your future costs and potential funding gap. It projects the future cost of care based on inflation, grows your current savings, and then calculates the difference.

The first step is to project the annual cost of care into the future, from today until the age you expect to need it.

Projected Annual Cost at Start = Current Annual Cost × (1 + LTC Inflation Rate) ^ Years Until Care is Needed

Where:

• Current Annual Cost = The cost of your chosen care type in today's dollars.
• LTC Inflation Rate = The annual rate at which you expect care costs to increase.
• Years Until Care is Needed = The difference between the age you might need care and your current age.

Next, the calculator determines the total cost over the entire care period. Since costs continue to inflate each year, it calculates the cost for each year of care and sums them up.

Total Projected Cost = Sum of (Projected Annual Cost for each year of care)

To see if you can cover this cost, the calculator projects the future value of any savings you've set aside.

Future Value of LTC Savings = Current LTC Savings × (1 + Savings Annual Return) ^ Years Until Care is Needed

Where:

• Current LTC Savings = The amount you have already saved specifically for long-term care.
• Savings Annual Return = The expected annual growth rate of your LTC investments.

Finally, if your projected savings don't cover the total projected cost, the calculator estimates the monthly savings required to close that gap.

Monthly Savings Needed = Funding Gap × [Monthly Savings Rate / ((1 + Monthly Savings Rate) ^ Total Months - 1)]

Where:

• Funding Gap = Total Projected Cost - Future Value of LTC Savings.
• Monthly Savings Rate = Your annual return on savings divided by 12.
• Total Months = The number of months you have until care is needed.